ACI eManifest: AMPS Penalties, and how to avoid them.

ACI Background • Advance Commercial Information (ACI) is a new way of doing business with Canada Border Services Agency (CBSA) and is mandatory. • From May 6th – July 10th, 2015 highway carriers were provided a 45-day transition period to prepare (although eManifest was clearly known to be coming from early 2012 and was delayed several times) • On July 10, 2015 non-compliant carriers were provided an additional 6 month period to become compliant with zero-rated penalties issued in some cases but minimally drivers receiving a “warning document” on arrival. This 6 month soft enforcement period would end on Jan. 11, 2016 • From January 11th, 2016 carriers arriving and not meeting all ACI or eManifest requirements now receive a monetary penalty. As well nooncompliant highway carriers are delayed at the border and must have an ACI or eManifest filed before being allowed to proceed

AMPS Background • The Administrative Monetary Penalty System (AMPS) secures compliance with customs legislation through the application of monetary penalties • AMPS authorizes the CBSA to assess a monetary penalty for noncompliance with customs legislative, regulatory and program requirements • Pre-arrival requirements (advance commercial information) is based on Section 12.1 of the Customs Act

ACI Mandatory Requirements • All commercial carriers whether empty or loaded are required to report electronically a minimum of one hour before the shipment arrives at the border unless an exception- such as CSA shipments presented to CBSA by those carriers who are CSA approved and meeting the CSA release type conditions • Reporting 1 hour prior to arrival means having both conveyance and cargo data on file with CBSA before the physical trucks arrival • Carriers are encouraged to submit if empty but currently carriers who are empty (no goods on the truck) and not having submitted ACI are being allowed to proceed without risk of penalty action and this remains the same today • Carriers who may travelling in-transit through Canada are also being allowed an interim exemption and this remains the same today • Every commercial carrier for hire must have their own carrier code in order to submit data! Every driver arriving in a commercial truck needs to be prepared to meet the ACI requirements and must have an ACI Coversheet to equivalent document to support the ACI has in fact been completed

ACI must be identified by a barcoded CRN or CCN Preferred Option

ACI Coversheet with barcoded CCN #

Administrative Monetary Penalty System Master Penalty Document can be found on CBSA website http://www.cbsa-asfc.gc.ca/trade-commerce/amps/mpd-dmi-eng.html •

Each new penalty is intended to apply to all submission requirements and all trade chain partners responsible for pre-arrival; including the provision that multiple penalties may be issued per shipment if multiple trade chain partners are in contravention of their respective requirements. Penalty is based on the following:

1. Failing to provide advance information 2. Failing to provide advance information in the prescribed time or in the prescribed manner 3. Failing to correct advance information 4. Failing to provide true/accurate/complete information 5. Failing to comply with an electronic customs Risk Assessment notice

About 900 of the following penalty issued to carriers: Penalty # C378 – it was determined that the receiver of the penalty failed to submit pre-arrival or preload data 1st level - $2,000 - All with a variety of reasons why the information was not on file with CBSA before arrival The good news CBSA has agreed not to elevate penalty action to a 2nd level issue ($4,000) and/or a 3rd level ($8,000) at this time. Currently the regulation indicates you must maintain a compliance period of 12 months to avoid 2nd or 3rd level issue. Currently all penalties are being reviewed and centrally issued. At the end of June CBSA was to provide authorization to the local ports to issue penalty action and this has also been delayed at this time. We have clearly seen inconsistency in handling from one port to another and customs admit that internal communications understanding and training is still needed.

Penalty Mitigation First it would be fair to say CBSA’s definition of mitigation and Webster’s Dictionary and most of us on this call is much different: The action of reducing the severity, seriousness, or painfulness of something 1. the act of mitigating, or lessening the force or intensity of something 2. the act of making a condition or consequence less severe: the mitigation of a punishment. 3. the process of becoming milder, gentler, or less severe CBSA stats last week indicated they have mitigated 96% of all issued AMPS in come capacity When questioned there have been no reduction to the amount owing (current legislation does not allow a lower fee to be determined by CBSA) but examples provided that larger volume carriers who’s ACI history was reviewed were not given a $2,000 penalty for each incident And 88% of the carriers issued AMPS had received previous outreach and/or zero-rated penalty

Options after receiving AMPS •

Remit payment in Canadian or U.S. Dollars, payable to the Receiver General for Canada. All clients have an obligation under section 109.4 of the Customs Act to pay in full the penalty assessment served upon the. If payment in full is not received within 30 days from date of penalty, the amount is subject to interest.

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Request a Correction ReviewIf you believe the penalty action taken was incorrect you may request a review within 90 days from the date in writing or through on-line e-filing http://www.cbsa-asfc.gc.ca/trade-commerce/amps/correction-eng.html

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Request a RedressAgain within 90 days of penalty action request consideration as a result of a systematic problem effecting your commercial information system or related processes and you are prepared to invest in corrective measures to remedy the problem http://www.cbsa-asfc.gc.ca/recourse-recours/howto-commentfaire-2-eng.html

What have we done? • Fielded many calls and listened to your frustration • Submitted directly on behalf of clients using BorderConnect or our clients have submitted efilings, either to correction or recourse (some replies received- denied or in a few instances where the situation was in fact an error on the part of CBSA received a cancellation) • Communications with CBSA both locally, regionally and central • Communications with transportation industry groups • Communications with clients and drivers, with tips on how to improve current processes and tried to make clarifications to have auto messages better understood by drivers/company personnel • Webinars and training and e-mails and outreach providing 24/7 support and attempting to stress from Day 1- “this is a new way of doing business with CBSA” • Considering a number of next steps to continue to address this issue on behalf of our customers

What can you do? • Ensure all personnel (drivers included) understand these new regulations • Update processes and your standard operating practices that are now obsolete or not working! If you depend on someone else to fax paperwork, check it was received, check before going off shift to ensure that all eManifests are properly submitted. • Analyze why the penalty was received and steps to improve, use it as a teaching/learning tool • Watch for postings on our front page! Watch for “warnings” again posted for users as potential problems are being experienced! • Understand the differences between U.S. and Canada and ACE and ACI and unfortunately the “mitigation” process • Check, check and recheck before a truck arrives at the border! Take advantage of our 24/7 support team! • Share your ideas! Offer suggestions for improvements! • Be patient and keep working with us to make the necessary changes needed!

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