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Don't Get Blindsided by a Customs Audit

For a small or medium-sized importer, there is nothing worse than to go through a customs audit that reveals underpayment of duty. Frustratingly, the issue could be something that is not (and was never) in your control such as your vendor completing a NAFTA certificate without understanding NAFTA rules. If that were to happen, and if your NAFTA claim is found to be invalid, CBSA can go back four years to collect duties and taxes that should have been paid.

Let's play that scenario out: You have already determined your costing, assuming that your product was duty-free under NAFTA, and sold your goods. You cannot go back to your customers and tell them that there was a mistake and you need to collect more money from them. No, this unforeseen error would come directly out of your profits. That's not to mention that there could be Administrative Monetary Penalties (AMPS) applied.

The risk of the unknown can be detrimental to your company's sustainability. It is a far better investment to pro-actively have an expert like Welke Customs Brokers review your products and documentation to ensure that:

  • Your products are classified correctly;
  • You have the proper supporting documentation to apply preferential tariff treatments;
  • The proper values are declared; and
  • You are taking advantage of all the programs available to you.

Don't be caught unaware and think you will never undergo a customs audit. Ensure your import information is accurate and compliant by contacting Welke today!

Make Yourself Known - Become a "Trusted Trader" Today

There was a time when importers did not want to be "known" by Canada Customs (CBSA). The fear was that if customs had you on their radar your shipments would be targeted and scrutinized closely, ultimately delaying the delivery of your products.

Nothing could be further from the truth. In today's world, it's the opposite approach that provides the greatest benefit to importers. With tightening security measures and emphasis placed on high-risk importers and goods, you want CBSA to know you - that you are a well-informed and compliant importer; that you know who your trading and logistics partners are; and that you have done your due diligence to ensure that your partners are well-informed and compliant.

YOU WANT TO BE A "TRUSTED TRADER"! Become a member of Partners In Protection (PIP).

Some of the benefits of Partners In Protection:

  • When you reach the border your company will be recognized as a Trusted Trader.
  • Your company will have a reduced risk score, which can result in a lower examination rate at the border.
  • Your company will be recognized as a Trusted Trader under the CBSA's mutual recognition arrangements with USA, Japan, Korea and Singapore.
  • Stay up-to-date on customs regulations through PIP's Awareness Sessions.

For more information on the Partners In Protection program, visit the CBSA web site, then email [email protected] and let Welke walk you through the enrollment process.

What's your Customs broker really doing for you?

Where do companies begin their purchasing process? Price, right? It's the natural starting point, and every procurement officer in businesses around the globe wants to pay the lowest price possible to maximize profits.

But effective buyers understand that the lowest price isn't always the best value - a concept that is gaining more and more relevance as competition in the global economy grows. Products and services that were once perceived as commodities are no longer being treated as such, now requiring specialized expertise, trusted partnerships and greater certainty.

Customs brokers represent one of these industries. In the past, a Customs broker was a means to an end: process entries on imports so that I can get my product to market. Today, with constant changes in laws, regulations and trade agreements, your relationship with your Customs broker is not one that should be taken lightly. A haphazard search for a Customs broker pushing on you the benefit of the "lowest" price can leave you vulnerable for big problems down the line.

"Compliance" is the newest and most important buzzword in import lingo. Get to know it. If your current Customs broker is not preaching compliance to you (regardless of the great price you've gotten from them), it's time to find a new Customs broker. In today's import environment, it is more than possible that a company can get away with being non-compliant for years. But on the day that the Customs audit comes, if you are found to be non-compliant CBSA can go back four (4) years to collect duties that you haven't paid. Who's on the hook for that penalty? Be assured it's not your low-cost broker.

There's another way to look at it, as well. Did you know that if your classification and tariff codes were not entered properly by your low-cost broker and you were actually overpaying on duty and tax, you can go back and have those errors corrected? At Welke Customs Brokers, we're as interested in maximizing your company's profits as you are, so we work with you to reclaim that overpayment. Unfortunately, it's not uncommon for our in-house experts to come across companies paying 11% duty on a product that should be 5% or 6% or even 0% because of misclassification.

We understand price shopping - we have business expenses, as well. Who doesn't want to go into their CEO's office and tell them you saved money on a service you have to have? But there are services your Customs broker should be providing beyond simply processing your entries, including staying up-to-date on all regulatory changes and keeping you apprised on how they can and will affect your business. If that's not happening, give Welke a shout.

- Nicholas Brenie, (e-mail) Welke Customs Brokers

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