Transmanna Intl. can assist you in taking advantage of Penalty Reinvestment Agreement. Under this policy, Canada Border Services Agency (CBSA) allows a claimant to reinvest all or a portion of a penalty applied under the Administrative Monetary Penalty System (AMPS), by means of a Penalty Reinvestment Agreement (PRA), when a client has

  1. demonstrated that a penalty was issued as a result of a systematic problem affecting their commercial information system (CIS) or related processes; 
  2. invested in corrective measures to remedy the problem in a timely manner; and
  3. demonstrated that the corrective measures are effective in achieving compliance.
  4. A PRA provides for a penalty reinvestment of one dollar for each dollar of eligible costs incurred by the client to correct a systematic problem that resulted in the issuance of administrative monetary penalties. A PRA is granted through the ministerial review process, which a client may initiate by making a request for a decision of the Minister under section 129 of the Customs Act. The completed PRA application form submitted by the client will be considered by the CBSA as a request for a Minister’s decision under section 129 of the Customs Act.
  5. The purpose of this policy is to assist a client in becoming compliant with the Customs Act, Customs Tariffand related regulations by providing an incentive to invest in the correction of an underlying systematic problem that resulted in the application of administrative monetary penalties. This policy is consistent with the overall objective and intent of the AMPS administered and enforced by the CBSA.
  6. For the purpose of this memorandum, “client” is defined as a commercial importer, exporter, broker, carrier or warehouse operator.
  7. This policy applies primarily to clients who have been issued administrative monetary penalties assessed under section 109 of the Customs Act. Clients who have been served a Notice of Ascertained Forfeiture instead of an NPA in respect of commercial contraventions, on which an amount of money is demanded under section 124 of the Customs Act, may also be eligible for a PRA.  

Clients are not eligible for a P.R.A. if they:

  1. have been issued penalties as a result of contraventions involving prohibited or inadmissible goods (refer to “Definitions” for the definitions of “prohibited goods” and “inadmissible goods”);
  2. have been issued penalties assessed under an Act of Parliament other than the Customs Act(e.g., Agriculture and Agri-Food Administrative Monetary Penalties Act);
  3. have any outstanding debts payable to the CBSA other than the penalty that is the subject of the PRA; 
  4. Clients who have been issued penalties in respect of contraventions involving the export of strategic goods- reviewed by the CBSA on a case-by-case basis.

A client may apply for a P.R.A. if they:

(a) are the client against whom the penalties were issued, as identified on each Notice of Penalty Assessment (NPA) at issue;

(b) have been issued one or more penalties involving numerous and/or repetitive contraventions or instances of non-compliance, caused by a systematic problem in their CIS;

(c) have not been issued a Minister’s decision under section 131 of the Customs Act in respect of the NPA(s) at issue;

(d) have identified the cause of the systematic problem in their CIS; and

(e) are prepared to invest in corrective measures to remedy the systematic problem and demonstrate that the corrective measures are effective in achieving compliance.

  1. A client who has not already requested a ministerial review under section 129 of the Act must apply for a PRA within 90 days of receipt of the NPA at issue.
  2. It is the responsibility of the client to provide to the CBSA all of the information requested on the PRA application form and to ensure that the information is presented in a clear and understandable manner. Failure to provide the required information in the appropriate manner may result in the denial of the application.
  3. To apply for a PRA, the client must complete Form BSF266, Penalty Reduction Agreement Application Form. (A sample of the form is provided in Appendix A.) The form contains instructions on how to complete the application and specifies the information required by the CBSA to initiate the review of the client’s application. The client must submit the application form to the mailing address listed in this memorandum.

(a) The reason for requesting a PRA;and

(b) The penalty assessment number(s) of the NPA(s) at issue.

  1. A client who wishes to apply for a PRA but is unable to complete the application form within the time period stated in paragraph 11 may submit a request for a PRA by letter to the mailing address listed in this memorandum. The client must include in their letter:
  2. Clients who have submitted a letter request will be mailed a copy of the application form, which must be subsequently completed and returned to the CBSA within 30 days.
  3. Clients who require additional time to submit the application form or other required documentation must advise the CBSA as soon as possible. The CBSA will allow clients additional time to complete their application or submit documentation requested by the CBSA only in exceptional circumstances.
  4. The CBSA will acknowledge to the client, in writing, receipt of a PRA application. In certain cases, the acknowledgement letter sent to the client may be used by the CBSA to request additional information.
  5. Clients who have submitted a PRA application may request that penalties issued after an application has been submitted be added to their application if:

(a) the systematic problem in their CIS that resulted in the issuance of the subsequent penalties is the same as that described in the submitted application;and 

(a) the systematic problem in their CIS that resulted in the issuance of the subsequent penalties is the same as that described in the submitted application;and 

  1.  Clients who wish to request that subsequent penalties be added to a previously submitted PRA application must, within 90 days of the date of service of the subsequent NPA(s), advise the CBSA, by letter, that they wish to include additional penalties to the list of penalties covered in a previously submitted PRA application. In the letter, the client must also:

(a) specify the penalty assessment number(s) of the NPA(s); and

(b) describe how the subsequent penalties were caused by the same systematic problem described in the previously submitted PRA application.

  1. While the payment of the penalty may be deferred until a decision is made, a penalty that is not paid within 30 days of issuance, and determined to be issued correctly and not relieved in full by a successful PRA, will accrue interest at the prescribed rate from the day after the date on which the NPA was served until the date the amount owing in accordance with the decision under s.133 is paid in full.
  2. The CBSA will first review each of the penalties identified in the application, in accordance with sections 130 and 131 of the Customs Act, to determine whether the penalties were assessed correctly. The CBSA will cancel or adjust the amount of any penalty determined to be incorrectly issued. 
  3. During the PRA review, the CBSA will consider the applicant’s history of compliance and the time delay in taking corrective action after identifying a systematic problem in their CIS. The CBSA will notify the applicant of the outcome of the review, advising them of the total amount of penalties that may be eligible for a penalty reinvestment and the date by which the proposed corrective measures described in the application must be implemented.
  4. After having implemented the corrective measures, applicants must substantiate all eligible costs incurred to remedy the systematic problem in their CIS with supporting documentation. Costs incurred by applicants will only be offset against penalty amounts if the applicant can demonstrate that the costs for remedying the systematic problem in their CIS are eligible under this policy.
  5. Once the applicant has substantiated all eligible costs, the CBSA will ensure that the client’s corrective measures have been implemented and are effective. The CBSA may verify compliance approximately 6 months following the date the corrective measures have been implemented.
  6. If, following the verification, it is determined that the corrective measures are effective in achieving full compliance, the PRA will be granted and the CBSA will proceed to allow the claimant to reinvest the amount of the penalties by the same amount as the total eligible costs incurred by the applicant to achieve compliance. However, if it is determined that the corrective measures are not effective in achieving compliance, the PRA will not be granted and the CBSA will request that all outstanding penalty amounts be paid with applicable interest
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 Email Address: info@Transmannaintl.com