(The Canadian Courier & Messenger Association -- CCMA) CCMA wishes to send this letter to re-iterate our concerns that many areas of the AMPS regime remain punitive, not corrective. What is at issue is the
need for an AMPS compromise which will ensure compliance with government needs and yet not act as an impediment to business.
The CCMA fundamentally supports CBSA in its efforts to ensure a
"level playing field" and Customs compliance via the AMPS program. The industry recognizes the importance of the function CBSA performs through border compliance and the need for an administrative
compliance tool. Although in looking at AMPS from a perspective of our respective members operations having had experience with the AMPS to date, issues and areas requiring attention continue. It is
therefore vital that the collective parties with concerns work towards resolution of the harmful aspects of AMPS.
As an introduction, the CCMA is the organization representing time sensitive delivery
service company operations of all types and sizes across Canada. Our members include large firms with global delivery networks, such as FedEx, Menlo Worldwide Forwarding, Purolator, TNT and United Parcel
Service, as well as mid size businesses with strong regional delivery networks and smaller local delivery firms maintaining an extensive stake in the time sensitive shipping business.
The express
transportation industry specializes in time-definite, cost effective, reliable transportation services for documents, packages and freight. Express delivery has vital importance to businesses utilizing
time-sensitive, "just-in-time" manufacturing techniques and supply-chain logistics in order to remain internationally competitive.
Barriers and Impacts
Industry has consistently
repeated themes/proposals aimed at improvements to the AMPS, however public sector barriers such as personnel/systems/funding are ever present and obstruct real change. For those striving for adherence with
Customs legislation, AMPS has had significant impacts relative to both financial and human resources. Compliance efforts have necessitated system changes and additional resources devoted to Customs
management, coordination and compliance. Added to this is the administration associated with the AMPS appeal process, the exorbitant amount of time it takes for resolution of issues and the cash flow impacts
in terms of manpower and monetary amounts tied up during this lengthy process.
Re-formation of the AMPS working group necessary
The CCMA has written concerning these issues in the past and
were optimistic for alterations as a result of a previous Ministerial review calling for attention to the program. In spite of this, the AMPS regime continues relatively unchanged absent of any meaningful
collaboration or consultation with industry.
The CBSA must approach legitimate business in the spirit of co-operation and consultation it has committed to. The Customs Blueprint states;
"Together we will build a Customs program that adapts and responds to an ever changing environment and supports the values of Canadians and our competitiveness to international markets." To support
this phrase, we suggest re-formation of the AMPS working group and aim towards a succinct effort in tackling some of the barriers that are mentioned by CBSA in relation to the ideas for change that are
consistently raised. The CCMA believes that ongoing consultations create benefits through enhancement of CBSA's understanding of various industries in the trade community.
Immediate Need - Attention to Industry
Problematic warehouse AMPS Infractions. As a first step to introduction of consultation the immediate need is to address a particular area of AMPS infractions
which have and continue to be problematic to our industry. This involves the following penalties: C066, C358, C347 and C033. As AMPS decisions on various areas are now domiciled with the various section
heads we are appealing to yourselves; Mr. Jim Clark (Director, AMPS Policy and Programs) and Mr. Jim Wilson, Chief, Carrier Control for immediate action in resolution of our problem, which is detailed below.
As an industry the courier environment is a multifaceted one; we are carriers, warehouse operators, Customs brokers and delivery agents, in effect true integrated carriers responsible for much more
than the transport of goods from A to B. As a result of this, our industry faces penalty exposure on many fronts due to the multiple areas of services provided, exposure often caused by errors not intent.
With some penalties there is obvious overlap, in some instances officers can select and impose the penalty with the highest amount. One example of this is the situation we face between the following
penalties: C066, C358, C347 and C033. To understand this conflict one must break down and analyze all these penalties and their application in the field.
What is occurring with these penalties is that
officers are consistently levying the higher C066 or C358 to obtain a higher penalty amount and without regard to the actual value of the goods, or that they are dealing with integrated carriers rather than
sufferance warehouse operators. For the AMPS scenario where integrated carriers have reported the goods and who utilize the LVS system, yet the goods get delivered in error - this is clearly covered under
penalties C347 (LVS goods value < $1600.00 Cdn.) or C033 (HVS goods value > $1600.00 Cdn.).
Even under appeal the decisions made by officers to levy the higher penalty amounts under C066 and
C358 are upheld. Often the carrier winds up with penalties for Low Value Shipments (i.e. $53.00 in value) totaling $3000.00 - clearly a punitive situation.
As these penalties are very similar in
nature and because the wording is not distinctive enough, the higher amounts are levied frequently. If a carrier operates its own warehouse and is involved as a courier operation that is approved to use the
LVS system of clearance, carrier LVS warehouses should not be grouped into the licensed sufferance warehouse operator category rather than removal from a carrier's warehouse. Clearly either C033 ($1600. or
greater) or C347 (less than $1600.) should apply in these circumstances depending on the value of the goods delivered without Customs release.
The outcome of the higher penalty assessments is that it
is unfair and clearly punitive in nature for Customs officers to apply higher penalties of C066 and C358 during these carrier instances.
Recommendations
The following are a series of
options on how to rectify this punitive situation immediately:
1. The penalty amounts for C066 and C358 could be altered to equal those in C033.
2. Introduce an LVS/HVS allocation within
C066/C358 and corresponding penalty amounts to C347 and C033.
3. Clear distinctions should be made to officers that when they're dealing with an integrated carrier on the LVS system; C347 and C033
should be used (depending on value) and C066 and C358 should not be applied.
4. Precise wording changes must be made to the backgrounders to provide adequate and clear guidelines to officers on how
to properly and equitably assess these penalties. Any of the above options will go far towards mitigating this situation. If this requires further discussion we would be glad to participate.
The present environment is causing hardship to business which was not the original intent of the AMPS program. In addition, our industry expects consistent and reliable application of C347 & C033 by all
Customs Regions. In spite of correspondence detailing this situation previously it remains in need of attention. The optimum remedy would be a final clarification/decision and if the decision is favorable,
then an allowance afforded retroactive. Continuing Needs - Focus on relief proposals aimed at managing error vs. intent
The principals of a truly corrective penalty system should be
based on intent. There is a significant difference between intentional negligence with the objective to defraud, and negligence due to human or system error. A totally different corrective structure should
exist defining different consequences and corrective measures for intentional and non-intentional errors and omissions. There has been much discussion by the trade regarding AMPS being punitive rather
than corrective. One reason is because AMPS places small and large entities under the same compliance onus without taking volumes into consideration, further exacerbating the level-playing field CBSA is
striving to create. Feeding into this predicament are errors/mistakes which is an operational likelihood. The question is how to solve this puzzle and in so doing construct a reasonable AMPS program for
traders.
Consistent themes for consideration
There are consistent themes expressed by industry regarding what the difficulties are and possible remedies:
1. Volumetrics
considerations, leveling the playing field in addressing; volumes/corresponding penalty exposure
2. Penalties exceeding shipment values are unfair
3. Revenue neutral infractions should have a mitigation factor
4. Contemplation of mitigating circumstances such as obvious error and mistake of fact should be considered.
5. In the event of
penalties invoked against a trader, the extent to which the company has shown compliance and invested in constructive Customs/security initiatives should reflect favorably and should be a mitigating factor
toward any CBSA decision or recommendation on final case disposition (profile/history should be considered).
6. Responsible traders have every intention of being fully compliant with Customs
legislation but errors do occur. Extension of the PIC (Partners in Compliance) program would further demonstrate CBSA's willingness to provide industry with a corrective rather than punitive environment, it
is necessary that this type of program be made available to traders quickly.
7. Reconsideration/adjustment of problematic penalties in terms of monetary amounts and how they are administrated in the
field.
8. Penalty levels currently based on percentages ? suggest flat rates during assessment.
9. During an appeal, the penalty level/plateau should remain static and not increase until the
outcome of the appeal is determined.
10. CBSA should take into account efforts of large stakeholders demonstrating due diligence and good compliance when determining the best means for addressing
high volume transactions and compliance. This letter is intended toward working together with the Agency in consultation to effect positive changes to AMPS, to ensure that the system is
corrective, promotes a level playing field and encourages individual traders to improve their compliance.
We hope our proposals will be helpful and can feed into what should be CBSA's ongoing review
of the AMPS system. We look forward to a further consultative forum on AMPS and appreciate your efforts to date in addressing our issues. |
