Key Changes are Coming to AMPS

The Canada Border Services Agency (CSBA) has issued a notice of changes resulting from a review of the Administrative Monetary Penalty System (AMPS).

Announced in Customs Notice 10-002, February 26, 2010, starting in April, the first phase of changes will be implemented. A second phase will go into effect in October, 2010. In light of the upcoming changes to AMPS, the numerous U.S. companies that export to subsidiaries and affiliates located in Canada or are non-resident importers (NRI) must be sure current import practices comply with Canadian laws and regulations. These companies should also become familiar with the changes to AMPS that will go into effect.

AMPS is a civil penalty regime applied to “contraventions” of the Customs Act and the Customs Tariff and the regulations of these laws. AMPS also applies to contraventions of the terms and conditions of licensing agreements. Penalties are imposed based on the type, frequency, and severity of the violations involved. Most penalties are graduated and the importer’s (“client’s”) compliance history will be considered in determining the penalties. Therefore, companies cannot afford to be without a compliance program for their Canadian imports.

The significant changes in April will include changes to the penalty amount and structures. Most penalties based on a percentage of the value of the goods imported will be eliminated. Graduated or flat penalty amounts will replace the percentage penalties. There will also be a 30 day delay in escalating penalty levels from the first to the second levels for low and medium risk contraventions. This change means that if a second Notice of Penalty Assessment (NPA) is issued to the same importer for the same contravention, AMPS will not escalate the penalty for some contraventions unless 30 days have passed since the first NPA was issued or the infraction occurred. This change only applies from the first to the second level. The change includes contraventions: C004, C005, C010, C011, C058, C071, C084-C151, C192, C207, C208, and C342. Other contraventions are being eliminated and 2 are being added in April.