Accounting for Goods and Payment of Duties and Taxes

Question 1

What is the third step in the customs process after goods have been reported to and released by the CBSA?

Answer 1

Accounting

This is performed by a CCS either as an employee of a customs broker or as an importer.

Question 2

According to Section 32(1) of the Customs Act, what must occur before goods are released?

Answer 2

Goods must be accounted for and all duties paid

Exceptions may apply as per subsections (2) and (4).

Question 3

What does Section 32(2)(a) of the Customs Act allow?

Answer 3

Release of goods prior to accounting with interim accounting in prescribed manner

This includes IID, RMD, or PARS.

Question 4

What does Section 32(2)(b) of the Customs Act mean?

Answer 4

Release prior to accounting can take place if the goods have been authorized for delivery prior to accounting (CSA goods)

Question 5

What does Section 32(3) of the Customs Act mean?

Answer 5

When goods are released prior to accounting, there is a specific time frame in which accounting must take place

Accounting must be made by the party that submitted the release or by the importer or owner in the case of CSA goods

Question 6

What does Section 32(4) of the Customs Act mean?

Answer 6

Goods that are shipped by courier or imported by mail can be released prior to accounting and prior to the payment of duties and taxes, under specific conditions

Question 7

What does Section 32(5) of the Customs Act mean?

Answer 7

If goods shipped via courier or mail are released before accounting and payment of duties and taxes, the authorized person must account for the goods and pay them within a specific timeframe

If no authorized person exists, the importer or owner must fulfill these obligations.

Question 8

What is the time frame for accounting for commercial goods after release?

Answer 8

Accounting data must be submitted within five business days

The accounting period excludes weekends and holidays.

Question 9

What happens if accounting is not completed within the prescribed time frame?

Answer 9

AMPS penalties may be applied

Specifically, C288 is a penalty for non-compliance.

Question 10

What is the penalty rate for C288 if final accounting documentation is not presented on time?

Answer 10

$100.00 per individual CAD

This applies if documentation is not accepted by the customs system within the prescribed time.

Question 11

Fill in the blank: Accounting and payment are not __________ in the Canadian customs context.

Answer 11

synonymous terms

Accounting refers to calculating duties and taxes, while payment is the actual remittance.

Question 12

What is the starting point for the accounting period after goods are released?

Answer 12

The first business day after the release date

The day of release is considered day zero.

Question 13

What includes definitions and the time frame in which accounting documents must be submitted or transmitted to the CBSA, as well as other requirements?

Answer 13

The Accounting for Imported Goods and Payment of Duties Regulations

Question 14

What system did CBSA implement on October 21, 2024, to replace CADEX?

Answer 14

CARM (CBSA Assessment and Revenue Management)

CARM allows customs brokers or importers to transmit accounting data to CBSA.

Question 15

How do most importers submit CAD information under the new CARM system?

Answer 15

Using EDI (Electronic Data Interchange)

Although direct submission via the CARM Client Portal (CCP) is available, most prefer EDI.

Question 16

In what percentage of commercial transactions is accounting data provided to CBSA using EDI?

Answer 16

More than 95%

This indicates a strong reliance on electronic data interchange for customs transactions.

Question 17

What are some of the benefits participants receive through EDI?

Answer 17

Automated daily notices and monthly statements
Tariff and exchange rate file updates
Notifications of release and overdue releases

These features streamline communication and data management between customs and participants.

Question 18

Who can provide information on EDI requirements?

Answer 18

Technical Commercial Client Unit (TCCU)

The TCCU assists clients with technical queries related to EDI.

Question 19

What must be used to transmit accounting data for goods released?

Answer 19

Commercial Accounting Declaration (CAD)

The CAD is the prescribed format for submitting accounting data.

Question 20

What happens if release data differs from final accounting data?

Answer 20

It may raise a red flag with CBSA

Discrepancies in data can trigger additional scrutiny from customs.

Question 21

Which CAD Types can be transmitted electronically?

Answer 21

AB, F, TT, V, 13, 20, 21, 22 and 30

All other types must be presented in hard copy.

Question 22

What type of messages can customs transmit back to the sender?

Answer 22

Error messages
Confirmation of messages related to previous transactions

These messages help maintain communication and address issues in submissions.

Question 23

What must be done if the CAD contains errors?

Answer 23

Review the error message and make corrections before resubmitting

This step is crucial to ensure compliance and avoid delays.

Question 24

What is Type AB used for?

Answer 24

To account for goods released on minimum documentation information and high value shipment commercial goods delivered via the postal stream and Continuous Transmission Commodities (CTC)

Can be submitted via EDI, API, and the CCP.

Question 25

What is Type C used for?

Answer 25

To obtain release and provide accounting at the same time, including hand-carried goods ## Footnote Can be created via the CCP only and must be printed and submitted to the CBSA port of entry.

Question 26

What types of goods does Type C also account for?

Answer 26

High value shipment commercial goods delivered via the postal stream ## Footnote This type is specifically designed for certain types of goods.

Question 27

What is Type F used for?

Answer 27

To account for goods imported into Canada through the CLVS stream ## Footnote Can be submitted via EDI, API, and the CCP.

Question 28

What is Type TT used for?

Answer 28

To account for goods imported by a Customs Self Assessment (CSA) Importer with accounting and clearance benefits ## Footnote Can be submitted via EDI, API, and the CCP.

Question 29

What documents refer to Type TT?

Answer 29

Memoranda D23-2-1 and D23-3-1 ## Footnote These memoranda relate to the Customs Self-Assessment Program for Carriers and Importers.

Question 30

What is the purpose of Type V?

Answer 30

To voluntarily declare goods that entered Canada without official customs release ## Footnote Must account for released goods using the applicable CAD type.

Question 31

Can Type V be submitted via the CCP?

Answer 31

Yes ## Footnote Type V can only be submitted through the CCP.

Question 32

What is Type 10 used for?

Answer 32

To account for goods entered into a CBSA customs bonded warehouse ## Footnote Can be submitted via EDI, API, and the CCP.

Question 33

What is Type 13 used for?

Answer 33

To transfer goods into a new warehouse or to complete the change of ownership ## Footnote Requires specific subtypes for different transfer types.

Question 34

What combination is required for a change of ownership using Type 13?

Answer 34

Type 13 and subtype 13-1 ## Footnote This indicates the transfer for a change of ownership receipt.

Question 35

What is Type 20 used for?

Answer 35

To account for duty and taxes on goods taken out of the warehouse for use in Canada ## Footnote These goods were warehoused on CAD types 10 and 13.

Question 36

What is Type 21 used for?

Answer 36

When goods warehoused on CAD types 10 and 13 are taken out, exported, or damaged ## Footnote Damaged goods should be documented on Form K11.

Question 37

What is Type 30 used for?

Answer 37

For the transfer of ownership or title and to transfer goods out from one bonded warehouse to another ## Footnote Refer to Memorandum D7-4-4 for more information.

Question 38

What unique method of release does the CLVS program allow?

Answer 38

Cargo/release list ## Footnote This method facilitates the accounting of goods under the CLVS program.

Question 39

What is the F Type in the context of the CLVS program?

Answer 39

A consolidated accounting process ## Footnote It is also known as a consolidated entry or simply a consolidation.

Question 40

By what day must accounting data for goods released under the CLVS program be provided to CBSA?

Answer 40

24th day of the month following the release ## Footnote For example, goods released in February must be accounted for by March 24.

Question 41

What must be done if the 24th of the month falls on a weekend or holiday?

Answer 41

Account for goods on the previous business day ## Footnote All time limits must still be followed.

Question 42

What is the purpose of the unique accounting system for the CLVS program?

Answer 42

To group an entire month’s worth of shipments together in one CAD document ## Footnote This allows for streamlined accounting.

Question 43

What are the two ways to complete an F Type?

Answer 43

Total consolidation (only for casual goods) Consolidation according to importer (for casual or commercial goods) ## Footnote Each method has specific requirements depending on the goods.

Question 44

What does the term 'off entry work' refer to?

Answer 44

The individual assessment of duties and taxes per shipment ## Footnote This is necessary when completing an F Type.

Question 45

How must shipments released under the CLVS program that use a special authority number be accounted for?

Answer 45

Separately, either individually or consolidated by importer ## Footnote They cannot be included in a total consolidation.

Question 46

What information must be the same for multiple transactions using the same special authority for an importer to combine them into one line of the F Type?

Answer 46

Business Number Special authority Classification number Tariff treatment Customs duty rate Excise tax rate Rate of the GST ## Footnote This is unique to the importer consolidated F Type.

Question 47

What is the value range for goods from the US and Mexico that are accounted for under the Courier Import Remission Order (CIRO)?

Answer 47

$40.01 to $150.00 CAD ## Footnote These goods must use the correct classification number as indicated in the Customs Tariff.

Question 48

What classification number cannot be used when a special authority, permit, or license applies?

Answer 48

0000.99.99.00 ## Footnote This is specifically for goods under CIRO.

Question 49

What must be submitted if goods valued over $3,300.00 CAD are mistakenly reported under the CLVS program?

Answer 49

A V Type entry (a voluntary entry) within five days of release ## Footnote This must be done if the error is uncovered by the importer or customs broker.

Question 50

What should be done if controlled, prohibited, or regulated goods are released in error under the CLVS program?

Answer 50

Immediately notify the CBSA by submitting a V Type entry ## Footnote This requirement holds regardless of the goods' value.

Question 51

Which penalties apply to late accounting?

Answer 51

C244, C246, C288, C330, and C331

Question 52

What penalties are specific to CSA importers?

Answer 52

C244 and C246

Question 53

Which penalties is for CLVS goods that are not consolidated entries?

Answer 53

C330

Question 54

When is the C288 penalty applied?

Answer 54

For late accounting (entry not submitted in the five day time frame), importer assessed regardless of the party that was responsible for late accounting

Question 55

When is the C331 penalty applied?

Answer 55

When the goods are included on an F Type and the accounting information has not been submitted by the 24th day of the month following their month of release, assessed against the importer or the courier

Question 56

What does Section 33 of the Customs Act mean?

Answer 56

Allows for goods to be released prior to the payment of duties and taxes, when certain conditions have been met ## Footnote Once the goods have been released, duties and taxes must be paid by the party who accounted for the goods.

Question 57

What is the billing period?

Answer 57

The period that begins on the 18th day of a month and ends on the 17th day of the following month ## Footnote All inclusive period, any goods released on the 18th day of a month or the 17th day of the following month are included in the billing period

Question 58

When must duties and taxes be paid on CLVS goods?

Answer 58

No later than the 10th weekday after the 17th day of the month following the month in which the goods are released ## Footnote For example, if goods were released in February, accounting date = 24th day of March and duties and taxes must be paid no later than the 10th weekday after the 17th of March

Question 59

When must duties and taxes be paid on goods imported by mail and released by Canada Post?

Answer 59

No later than the last business day of the month following the month in which the release period ended