Regulatory Overview

About the Administrative Monetary Penalty System (AMPS)

AMPS (Administrative Monetary Penalty System) was introduced in December 2001.

The purpose of AMPS is to replace seizure and forfeiture provisions with large fines for most technical infractions. It covers any contravention of the Customs Act, Customs Tariff Act, Special Import Measures Act (SIMA), and all related regulations, license conditions, or undertakings.

Having a knowledgeable customs broker on your side is one of the best ways to reduce and manage this risk.

How AMPS will impact your business

All companies who are non-compliant with the regulatory requirements of customs will be affected. First and foremost, businesses will be subject to substantial cash penalties. Goods may be detained at border ports until the penalties are collected. Compliance records will be linked to customs facilities, ensuring enforcement. Also, privileges can be revoked, and participation in preferential programs can be denied.

How the penalties work

Penalties can be assessed either as a flat rate, or as a percentage of the value for duty of the goods involved. Most penalties will be graduated, meaning that a second incident of the same infraction will result in a higher penalty. A third and subsequent infraction will result in a penalty, which is higher again. The maximum penalty per contravention is $25,000.

For example, the penalties for "failure to report" a commercial importation of goods valued at $1,600 or greater are:

1st infraction - $2,000 or 20% of the value for duty, whichever is greater
2nd infraction - $4,000 or 40% of the value for duty, whichever is greater
3rd infraction - $6,000 or 60% of the value for duty, whichever is greater

Ways to protect yourself

The best way to protect yourself is to have a customs broker who is knowledgeable with customs regulations, and to examine and refine your current practices. EDI Customs Brokers is among the industry leaders in customs brokerage services, contingency audit, and periodic verification audits, and can help bring your company into ongoing compliant operations, substantially reducing your risk of any penalties.

In addition, MSR's flagship import software system, Visual Importer™, has been successfully used by a long list of clients to streamline their customs processes, maintain all-important audit trails and, above all, stay compliant.

Some of the key alert areas are:

Origin—The first penalty will act as a warning of the problem that must be addressed. The importer is ultimately responsible for ensuring that the goods comply with all regulations. They must inform the exporter about import requirements, though exporters are not subject to Canadian law because they are not residents of Canada, and therefore cannot be penalized.

OGD—You must present permits from Other Government Departments at the time of release.

NAFTA—The Importer must have the Certificate of Origin in his or her possession when claiming NAFTA. The customs broker is not responsible as they are merely an agent of the Importer.