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Canada Offers Grace Period for Disclosing Unreported Exports Transiting Through U.S.

Thursday, November 19, 2015
Sandler, Travis & Rosenberg Trade Report

The Canada Border Services Agency is offering a six-month grace period, from Dec. 1 to June 1, 2016, to companies that wish to voluntarily disclose exported shipments that transited through the U.S. prior to Nov. 16 and should have been reported but were not.

According to the CBSA, goods transiting through the U.S. to a subsequent destination for consumption must be reported on an export declaration if their value is CAN$2,000 or more. In addition, if the goods are controlled other than by a general export permit, the appropriate permit/license/certificate and an export declaration must be presented to the CBSA before the exportation, regardless of the value of the goods. However, the CBSA states that it has become aware that a large number of businesses have been exporting goods to Mexico and other countries via U.S. highways without declaring them.

Under the six-month grace period, companies that have not complied with the reporting requirement will not be penalized if they submit a voluntary disclosure application, using the process outlined in Memorandum D11-6-4 (Relief of Interest and/or Penalties Including Voluntary Disclosure), that includes all unreported, non-exempt exports and provides the information outlined in Memorandum D11-6-4, including all data elements required in the export declaration.

The CBSA warns that goods exported after Nov. 16 (the date of issuance of this notice) are not covered by this grace period and penalties may be issued for failure to report exported goods. In addition, after the grace period expires on June 1 the CBSA will conduct compliance verification activities and may issue penalties for failure to report.

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