Partners in Compliance

Partners in Compliance (PIC) is a pilot initiative that builds on the principles of the Customs Self Assessment (CSA) program and risk management. It gives authorized CSA importers greater recognition for the integrity and reliability of their internal controls and business systems with respect to the Canada Border Services Agency’s (CBSA) trade programs (tariff classification, origin and value for duty), allowing the CBSA to invest post-release verification resources in areas of higher or unknown risk.

PIC provides an opportunity for approved CSA importers to voluntarily demonstrate to the CBSA that their business systems, internal controls and self-testing processes are effective and reliable at ensuring trade program compliance. It is expected that participation in PIC will result in fewer administrative monetary penalties and will contribute to business practice certainty.

Status of the PIC pilot initiative

The first phase of the pilot is now complete. The CBSA has successfully developed a process to evaluate the effectiveness and reliability of participants’ internal controls, including self-testing.

The CBSA is now engaging in a limited expansion of the pilot to further assess the viability of this initiative as a CBSA program. To further evaluate this initiative, the CBSA will add eight additional PIC participants in 2007-2008.

Benefits

Upon completion of the approval process, PIC participants will receive the following benefits:

• a unique and exclusive partnership agreement with the CBSA;
• a CBSA review of their internal controls and business systems, highlighting any possible weaknesses that may threaten their ability to be compliant;
• they will be removed from the post-release verification pool * ;
  
• monetary penalties may not be used as the CBSA’s first response to occurrences of non‑compliance;
  
• expanded client service benefits to those presently offered under CSA; and
  
• enhanced business certainty.

* The CBSA reserves the right to perform or have the participant perform verifications for high-risk or sensitive issues.

Eligibility

Importers eligible for PIC participation are those who must meet the following criteria:

• Canadian resident
  The prospective participant must be a resident of Canada and the business entity should be permanently established, located and managed within Canada. It will carry on business and have the general authority to do so without the approval of another person outside Canada. The resident importer must maintain separate books and records for its Canadian operations, prepare separate financial statements, maintain accounts for the imported goods and be responsible for payment for imports and duties and taxes.
• Approved CSA importer
  The importer must be a registered member of the CSA program. The importer will also have completed the CSA validation review and have successfully demonstrated that it has no significant outstanding CBSA accounting issues.
• Satisfactory importer compliance history
  The importer’s compliance history with the CBSA will confirm that there are no outstanding issues that would prevent or prohibit it from becoming a participant. 

Approval process

• The CBSA will work with the participant to plan and conduct a preliminary evaluation of internal controls. The purpose of this step is the following:
  • obtain an understanding of the participant’s trade program risks;
  • identify and understand the participant’s internal control processes; and
  • make a preliminary assessment of the likelihood of controls and systems to detect and prevent non-compliance with the CBSA’s trade requirements.
• If the CBSA is satisfied with the preliminary evaluation of internal controls, the participant and the CBSA will sign a PIC Memorandum of Understanding (MOU). If the CBSA is not satisfied with the participant’s internal controls, a decision will be made to either decline the partnership with the participant or to defer it until improvements are made.
• Within the first year of signing the MOU, the CBSA will conduct a performance monitoring exercise to evaluate the effectiveness and reliability of the participant’s internal controls. The CBSA will work with the participant to plan and conduct these on-site visits and tests.
• Once the CBSA has issued a satisfactory “low risk” evaluation of the participant’s internal controls and systems, the participant will establish a self-testing plan. The participant will perform self-testing and submit the results for review by the CBSA on an agreed schedule. The CBSA may undertake additional testing when necessary.

Contacts

For further information about PIC, please contact:

Partners in Compliance
2nd Floor, 171 Slater Street
Ottawa, ON  K1A 0L8

Partners in Compliance
1980 Matheson Boulevard
Mississauga, ON  L4W 5R7

PIC-PEMO@cbsa-asfc.gc.ca