ARCHIVED - Audit of the Administration of Permit, Licence and Other Requirements for Commercial Goods

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Internal Audit Report
November 2009

Table of Contents

• Executive Summary
• Introduction
  • Background
  • Risk Assessment
  • Audit Objective and Scope
  • Approach and Methodology
  • Audit Criteria
  • Statement of Assurance
• Audit Opinion
• Findings, Recommendations and Management Action Plans
  • Program Governance
  • Application of Border Controls
• Appendix A: Roles and Responsibilities
• Appendix B: OGD and Commodities Included in the Audit
• Appendix C: Audit Criteria
• Appendix D: Acronyms
• Appendix E: Definitions

Executive Summary

Background

The Canada Border Services Agency (CBSA) processes goods for import, collects duties and taxes, and enforces Canadian law, including the administration of legislation for other government departments (OGDs). Permits, licences, certificates or other OGD authorizations are used as a control to protect Canadians and their environment, to ensure that only approved goods are imported. Most goods entering Canada are of a commercial nature, are imported by commercial carriers, and therefore released and accounted for in the CBSA import systems.

Release of commercial imports is done within the CBSA Accelerated Commercial Release Operating Support System (ACROSS) and financial accounting for imports is done within the CBSA Customs Commercial System (CCS). Permit requirements, when administered by the CBSA at time of release, may be met using a paper or electronic process, depending on whether the issuing OGD has an electronic interface with the ACROSS.

The CBSA manages 24 commercial import program areas on behalf of 14 OGDs. Admissibility Branch has the responsibility to manage the relations with the OGD for the administration of commercial import programs. Enforcement, Operations, and Innovation, Science and Technology branches have specific responsibilities in regards to the administration of permit, licence and other requirements for commercial goods.

Objective and Scope

The objective of the audit was to assess the adequacy and effectiveness of the control framework for the administration of permit, licence and other requirements for commercial goods. The audit scope covered eight OGDs and 13 program areas, all CBSA regions, and included imports accounted for in the CCS with a demonstrable risk to the well-being of people, plants, animals and the environment.

Statement of Assurance

The audit engagement was planned and conducted in accordance with the Internal Auditing Standards for the Government of Canada.

Audit Opinion

The audit concluded that the control framework for the administration of permit, licence and other requirements for commercial goods was partially adequate and effective. There were strengths identified in program areas with electronic controls. Improvements were needed particularly in the application of border controls for program areas that relied on reviews by border services officers and manual paper-based processes, and in performance measurement, monitoring and information sharing.

Main Observations

The use of Memorandums of Understanding (MOUs) is recognized as a best practice and they can be effective instruments to manage inter-agency relationships as they articulate the roles, responsibilities and expectations between the parties. The audit found that up-to-date MOUs were in place for three program areas reviewed. Performance measurement and monitoring were two gaps in the control framework and the responsibility for these functions was not clear between the CBSA and OGD. Having up-to-date MOUs would clarify inter-agency responsibilities and should facilitate the performance measurement and management review of the various program areas. While an MOU may not be necessary for all program areas, management should assess the risks with the particular OGD to determine the need for an MOU.

Program policies and procedures are keys to outline to border services officers (BSOs) their duties for the program areas. The audit found that CBSA policies and procedures were up to date in six program areas. Updates to policies and procedures were in progress during the course of the audit. Out-of-date policies and procedures may lead to requirements and procedures being improperly understood by BSOs or importers, and there is a potential risk that a product would enter the country without appropriate safeguards.

The application of border controls revealed strengths in the electronic systems controls for certain program areas. However, the BSO review and manual paper-based processes were not delivering expected results. Given that performance was not being measured, management was not aware of the performance gaps and therefore action was not taken to address the issues. The Agency's Single Window Initiative should improve the electronic interface with OGDs and expand electronic controls to other program areas. Management advised that the Initiative will take several years to materialize due to its complexity, need for resources and the possibility that it may require legislative changes.

Management Response

The Admissibility Branch, on behalf of the other branches, agrees with the observations included in the report and has submitted management action plans to address its recommendations.

Introduction

Background

The Canada Border Services Agency (CBSA) processes goods for import, collects duties and taxes, and enforces Canadian law, including the administration of legislation for other government departments (OGDs).

Other government departments, through legislation or administrative agreements with the CBSA, such as Memorandum of Understanding (MOU), can require:

• The importer of record be licensed by the OGD
• A permit, licence, certificate, or other authorization accompany imports and be presented to the CBSA prior to release
• Any other requirement be met prior to release
• The CBSA administers these requirements through the review, identification and detention of imports, and OGDs may be notified. The purpose of the CBSA administration of these requirements is a control to detect non-compliant imports and to prevent their release.

Permits, licences, certificates or other authorizations are controls used to protect Canadians and their environment by ensuring that only approved goods are imported. Most goods entering Canada are of a commercial nature, imported by commercial carriers and therefore released and accounted for in the CBSA import systems. For the purpose of this document, the term “permit” is all inclusive and includes permits, licences, certificates, movement documents, authorizations or any other OGD requirement that must be met prior to release of imports.

The CBSA releases commercial imports using the Accelerated Commercial Release Operations Support System (ACROSS). Releases may be effected by the ACROSS (machine release) or by a border services officer (BSO) processing releases in the ACROSS. The CBSA conducts financial accounting for imports using the Customs Commercial System (CCS).

Permit requirements, when administered by the CBSA at time of release, may be met using a paper or electronic process, depending on whether the issuing OGD has an electronic interface with the ACROSS. The CBSA manages OGD requirements by border release controls (i.e. BSO review of permits) and post release controls (i.e. monitoring and target development).

If the importer or the broker fails to obtain and present the required OGD permit, licence, certificate, authorization or other required information, prior to, or at the time of release, then the CBSA may apply the Administrative Monetary Penalty System (AMPS), penalty number C071. The issuance of an AMPS penalty will cost the client $100 for a first instance, $500 for a second and $1,000 for each instance thereafter. Penalty levels will be increased April 1, 2010, to $500, $750 and $1,500 respectively.

The CBSA manages 24 commercial import program areas on behalf of 14 OGDs. The Admissibility Branch, Partnerships Division, is responsible for a variety of OGD programs and policies, liaising with OGD and negotiation of MOUs falling within their responsibility, disclosure of import records, and is the office of primary interest (OPI). The Operations, Enforcement, Human Resources, and Innovation, Science and Technology branches are offices of secondary interest (OSI). Branch roles and responsibilities are included in Appendix A.

There have been no past audits in this program area. The Audit Committee approved the audit as part of the Three-year Risk-based Internal Audit Plan for the fiscal year 2008–2009.

Risk Assessment

The risk assessment, combined with preliminary findings based on research, analysis and consultations held with the Admissibility and Operations branches identified the following key risk areas:

• Governance – Adequacy of the control framework – Governance risks refer to the potential challenges within the Headquarters framework for the management of the program area, including OGD relationships and national program oversight.
• Compliance – Effectiveness of the control framework – Compliance risks involve the potential import of OGD regulated goods without the applicable permit, licence or other requirements being met.

Audit Objective and Scope

The objective of the audit was to assess the adequacy and effectiveness of the control framework for the administration of permit, licence and other requirements for commercial goods.

The audit scope covered eight OGDs and 13 program areas, all CBSA regions, and included imports accounted for in CCS with a demonstrable risk to the well-being of people, plants, animals and the environment. A list of OGDs and program areas included in this audit is included in Appendix B.

The audit scope did not cover personal goods imported in traveller luggage or through the postal system, goods released verbally or by Order-in-Council [ 1 ], or goods having taxation or protection of market issues.

Approach and Methodology

The examination phase of the audit and transaction review of imports was conducted during the period of January to May 2009:

• Reviewed legislation, policies, procedures, guidelines and reports. Analyzed data and information from various sources, such as, but not limited to, the Customs Management Reporting System, ACROSS and CCS.
• Interviewed and surveyed key stakeholders across the CBSA, specifically with staff in the Admissibility, Operations, and Enforcement branches.
• Interviewed and surveyed OGD stakeholders, to understand their requirements and challenges.
• Documented, analyzed and assessed the control framework for adequacy and for the presence and appropriateness of preventive, detective and corrective controls.
• Randomly sampled commercial imports from the period of April to June 2008 using stratified random sampling techniques, to assess if releases were in compliance with OGD permit, licence or other requirements. Judgemental sampling was used on a limited basis to ensure comprehensive audit coverage, but this did not affect the direction of audit results. Samples were selected from import reports extracted from CCS using the Facility for Information Retrieval Management (FIRM).
• Analyzed imports that were not compliant to determine system and administration weaknesses.

Audit Criteria

Audit criteria were established based on the risk assessment, recognized management control framework elements and CBSA established procedures. Detailed audit criteria are provided in Appendix C.

Statement of Assurance

The audit engagement was planned and conducted in accordance with the Internal Auditing Standards for the Government of Canada.

Audit Opinion

The audit found that the control framework for the administration of permit, licence and other requirements for commercial goods was partially adequate and effective. There were strengths identified in program areas with electronic controls. Improvements were needed, particularly in the application of border controls for program areas that relied on reviews by border services officers and manual paper-based processes, and in performance measurement, monitoring and information sharing.

Findings, Recommendations and Management Action Plans

An adequate control framework ensures that non-compliant goods are detected, requirements enforced and/or the goods interdicted, and information appropriately funnelled to the applicable OGD. The use of Memorandums of Understanding (MOUs) is recognized as a best practice and they can be effective instruments to manage inter-agency relationships as they articulate the roles, responsibilities and expectations between the parties. The audit found that policies and procedures were up to date for half of the program areas and MOUs were up to date for three of the program areas reviewed. Roles and responsibilities within the CBSA were understood for the most part, however, performance measurement and monitoring were two gaps identified in the control framework, and therefore, the responsibility for these functions was not clear between the CBSA and the OGD.

The application of border controls revealed strengths in the electronic system controls for certain program areas. However, the BSO review and manual paper-based processes in place did not achieve expected results and the degree of non-compliance was beyond acceptable levels. Given that performance was not being measured, management was not aware of the performance gaps and therefore action was not taken to address the issues.

Program Governance

Policies and procedures were up to date for half of the program areas and MOUs were up to date for three of the program areas. Roles and responsibilities within the CBSA were understood for the most part, however, accountabilities and responsibilities were not understood for the areas of performance measurement and monitoring.

An adequate control framework requires defined roles and responsibilities; expectations negotiated between parties; complete and up-to-date policies and procedures; knowledgeable people; program oversight; performance measurement; and monitoring. An effective control framework for the administration of permit, licence and other requirements for commercial goods would ensure that non-compliant goods are detected, requirements enforced and/or the goods interdicted, and information appropriately funnelled to the applicable OGD.

The audit found that CBSA policies and procedures were published as Customs Memorandums (D19 memos); these were available online and by hard copy. The D19 memos were up to date for six program areas and updates were in progress for certain program areas. Out-of-date or incomplete policies may lead to requirements and procedures being improperly understood by importers or BSOs.

From a legal perspective, MOUs are not needed to enforce OGD requirements on goods at time of import because the Customs Act s.101 provides the CBSA with the legal power to administer and enforce requirements for “any Act of Parliament”. However, MOUs can be effective instruments to manage inter-agency relationships as they can articulate the roles, responsibilities and expectations between the parties. In this case MOUs were up-to-date for three of the 13 program areas reviewed. Out-of-date or incomplete MOUs may hinder the OGD programs as border management responsibilities may be unclear to the CBSA.

The audit found that roles and responsibilities within the CBSA were generally defined and understood. Admissibility Branch has the responsibility to manage the relations with the OGD for the administration of commercial import programs. The Operations Branch was responsible to administer and enforce requirements on imported goods. Management of OGD requested targets was centralized in the National Risk Assessment Centre (NRAC) within the Operations Branch; NRAC was responsible for the risk assessment, target input to ACROSS, and results reporting on OGD targets.

The audit found that there was no performance measurement or monitoring in place to assess the achievement of program objectives or to identify emerging areas of non-compliance. Furthermore, accountabilities were not always understood by program management. The CBSA was responsible and accountable for providing integrated border services, including the administration and enforcement of OGD requirements on imports, and for performance measurement of the CBSA. The audit found that monitoring and performance measurement activities were not exercised. Given that performance was not being measured, management was not aware of the performance gaps and therefore action was not taken to address the issues. Non-compliant imports may have been released and not detected, and the safety and security of people, plants, animals and the environment may have been compromised.

Recommendations

1. The Vice-President of the Admissibility Branch, in collaboration with the Enforcement and Operations branches and in consultation with other government departments, should develop and implement a process to monitor border controls, report on their effectiveness and take action to mitigate deficiencies.

Management Action Plan	Completion Date
OPI:  Admissibility Branch, Partnerships Division OSI:  Operations and Enforcement branches, other government departments (OGDs) The Admissibility Branch, in collaboration with the Enforcement and Operations branches, and in consultation with OGDs will:
Explore existing processes for monitoring OGD border controls.	June 2010
Develop a monitoring strategy and report mechanism regarding the effectiveness of the existing processes.	October 2010
Monitor the effectiveness of the subject OGD border controls (12 months are required to obtain a complete and accurate assessment).	October 2011
Report on the effectiveness of the subject OGD border controls and recommend corrective action, including training, as required.	November 2011

2. The Vice-President of the Admissibility Branch, in collaboration with the Enforcement and Operations branches, should develop and implement a plan to negotiate memorandums of understanding with other key government departments and to complete policies and procedures.

Management Action Plan	Completion Date
OPI: Admissibility Branch, Partnerships Division OSI: Operations and Enforcement branches, other government departments (OGDs) The Admissibility Branch, in collaboration with the Enforcement and Operations branches, will:
Develop criteria to identify key government departments/agencies.	March 2010
Consult the identified key government departments/agencies that do not have memorandums of understanding (MOUs) with the CBSA to determine if they support the concept of developing MOUs, policies, procedures or other types of written collaborative agreements.	September 2010
Develop an action plan for required MOUs, policies, procedures or other types of written collaborative agreements and obtain senior management approval.	December 2010
Implement the plan (start date).	January 2011

Application of Border Controls

The application of border controls revealed strengths in the electronic system controls for certain program areas. However, reviews by border services officers and manual paper-based processes in place did not achieve expected results.

The CBSA has a combination of release, post release[ 2 ] and corrective controls designed to promote compliance of the importers and make it easier for the CBSA to detect non-compliant imports.

Through transaction testing, the audit examined the application of these controls and assessed them using the following rating scale. The results are provided in Table 1.

• Satisfactory – the control is functioning as intended.
• Partially Satisfactory – the control is functioning for some program areas but not all, or only some elements are functioning as intended.

Table 1 - Assessment of Controls

Release controls	Assessment
Electronic interface with OGD real time review of imports	Satisfactory – The electronic controls performed as expected and all electronic release requests were funnelled to the OGD for a release recommendation.
Electronic permit interface	Partially satisfactory – The electronic controls performed as expected, but the BSO review to detect and electronically reject non-compliant release requests did not achieve expected results; consequently OGD requirements were not always enforced.
Electronic control of imports with data download to OGD
Paper processes	Partially satisfactory – Transaction testing revealed that certain program areas with paper processes demonstrated a higher level of compliance, while others had a lower level of compliance. In cases of non-compliance, paper documents were not properly administered and OGD requirements were not always enforced by BSOs.
Machine release selection – electronic exclusion profiles	Partially satisfactory – The electronic control preformed as expected, within its limitations. However, a lack of the classification number at time of release, or non-declaration of goods, resulted in machine release.
Post release controls	Assessment
Information sharing, monitoring and risk assessment	Partially satisfactory – System capability was in place to produce information reports for monitoring purposes, and the CBSA produced occasional research reports. However, there was no regular and comprehensive post-release monitoring of imports by the CBSA or OGD to measure performance or to detect emerging areas of non-compliance. Information costs charged to the OGD and imprecision of the Canadian classification numbering system were issues.
Targeting by the National Risk Assessment Centre (NRAC)	Not assessed.
Customs Commercial System (CCS) electronic rejection or referral	Satisfactory – The electronic control worked as expected, within its limitations.
Corrective controls	Assessment
Administrative Monetary Penalty System (AMPS)	Partially satisfactory – Penalties have been issued for permit infractions. However no penalties were issued for non-compliant release requests that were included in the transaction audit.

Transaction testing of commercial imports revealed that the program area of food, plant and animal (Canadian Food Inspection Agency) demonstrated a satisfactory level of control effectiveness. Several other program areas were for the most part satisfactory: rough diamonds and explosives (Natural Resources Canada); and firearms (Royal Canadian Mounted Police – Canadian Firearms Program).

For the other program areas, improvements were required to the application of controls. The audit found this was a national issue. BSOs did not consistently recognize OGD regulated goods and did not enforce OGD requirements when the release request or import was not compliant. Penalties under the AMPS were not issued in a number of cases even though the BSO rejected the release request to enforce the OGD requirement. As well, original documents such as paper certificates that should have been sent to the OGD were still attached to paper release requests.

The audit found that there were no “easy to use” CBSA reference tools, such as a consolidated Web site to help the BSO to recognize and process OGD regulated goods. The CBSA Enforcement Manual and D19 Customs Memorandums were available. Two OGDs had useful Internet database tools available. Furthermore, there was no CBSA internal 24/7 centralized phone service “help line” in place to effectively answer the questions of BSOs. Rather, BSOs were encouraged to contact the OGD for information. However, there is a multitude of regional and national OGD stakeholders who have a limited capacity to respond in a 24/7 environment.

During audit testing, a number of important matters were noted. Specifically:

Canadian Classification Numbering System

The World Customs Organization Harmonized Commodity Description and Coding System is a six-digit, trade-based international classification nomenclature system. The Canadian classification numbering system builds on the international system with four additional digits managed by the Canadian government. The seventh and eight digits are set by Finance Canada and the ninth and tenth digits by Statistics Canada.

The original intent of the Canadian system was for duty assessment and to collect trade data. However, the CBSA and Customs brokerage use of the Canadian classification system has evolved beyond its original purpose. Although there are limitations, it is used when practical to manage imports at time of release through electronic system controls and to monitor imported commodities post release. Hence, a precise and stable classification system is a key control to manage OGD requirements and to provide accurate report information.

The audit found that the classification of goods was not always precise, as regulated goods were often grouped with non-regulated goods. In the past, the CBSA had assisted OGDs to obtain changes to the classification system for greater precision. Management indicated that obtaining changes to the classification numbering system was time-consuming and they had not invested in this activity. As well, classification numbers have been consolidated, making electronic controls less effective. Consequently, post-release monitoring efforts may be limited by imprecision of the classification numbering system, and issues of stability and precision may compromise the effectiveness of electronic controls in the future.

Imports Controlled by Information Sharing, Monitoring and Risk Assessment

In 2003, the CBSA made a decision to cancel release controls for imports of certain program areas. This decision was part of a wider strategy to manage OGD requirements though a post-release control process of information sharing, monitoring, risk assessment and target development. As a result, importers and brokers no longer had to present permits to the CBSA for review to establish compliance.

The audit found that while CBSA had a targeting capacity available, the expected progressive developments of information sharing with the OGD, monitoring and risk assessment did not materialize. Transaction testing has confirmed that non-compliant imports may have been released at the border and import information on these goods was not obtained by the appropriate OGD.

Since planned controls were not fully implemented, it is difficult to determine the adequacy of these post release controls for these program areas. Management, in consultation with OGDs, will have to assess the current risks and implement a control process that mitigates the risks to an acceptable level.

Single Window Initiative – Future Direction

The CBSA is working towards the establishment of a single window electronic interface between the CBSA and OGDs. This may allow OGD personnel to review imports in real time prior to their release. The Single Window Initiative plans to move beyond current successes such as the electronic interface between the CBSA and the Canadian Food Inspection Agency, to expand electronic controls with other OGDs.

Management has indicated this initiative may take several years to realize due to its complexity, resource requirements, system enhancements and potential legislative changes. Under this initiative, the CBSA would continue its enforcement role, as imports may not be declared or may be inappropriately presented for release or accounting without the required permit.

Recommendations

3. The Vice-President of the Admissibility Branch, in collaboration with the Enforcement and Operations branches should open discussions with other government departments to review the adequacy of border controls for controlled/regulated goods.

Management Action Plan	Completion Date
OPI: Admissibility Branch, Partnerships Division OSI: Enforcement and Operations branches; other government departments [Health Canada and Public Health Agency of Canada] The Admissibility Branch, in collaboration with the Enforcement and Operations branches, will do the following:
Notwithstanding the general approach recommended in option#1, the plan in this case will address OGDs that do not currently have any border controls for their controlled/regulated goods. The goal will be to determine if any are required and, if so, whether such border controls are feasible.	June 2010
Report findings to Senior Management.	October 2010

4. The Vice-President of the Admissibility Branch should consult other government departments in a review of the appropriateness of the Canadian classification numbering system for identifying controlled/regulated goods and develop a plan to address identified issues.

Management Action Plan	Completion Date
OPI:  Admissibility Branch, Partnerships Division OSI:  Innovation, Science and Technology Branch (ISTB); Single Window Project Team; Admissibility Branch, Trade Policy Division This review has already commenced as part of the CBSA's Single Window Initiative (SWI):
Ten participating government departments were consulted on the appropriateness of using the Canadian classification numbering system (HS code) for identifying controlled/regulated goods. Initial findings show that using the HS code for commodity identification is problematic for other government departments (OGDs).	Completed
Admissibility Branch, in concert with ISTB, will revisit the findings of the initial consultation and examine alternative strategies for commodity identification with other government departments and the trade community and will be developing a plan to address identified issues.	January 2010
As part of its strategic planning and design for the Other Government Department Single Window Initiative (OGD SWI) end state, the Innovation, Science and Technology Branch (OGD SW Initiative), in conjunction with the Admissibility Branch, will examine alternative strategies for commodity identification that will enable a more precise classification of goods, thus facilitating improved border control in response to OGD regulations.	July 2010
As part of the SWI, a policy will be developed that provides a recommended course of action.	October 2011
As part of the eManifest project, the approved course of action will be implemented.	October 2012

Appendix A: Roles and Responsibilities

Admissibility Branch

• Responsible to act as liaison between OGDs and the CBSA, and for the management of OGD-CBSA relationships relating to the administration of OGD import programs.
• Responsible for the Customs D19 Memorandums (D19 memos) listed in Appendix B, except for Memorandum D19-9-2; the responsibility for this memorandum was transferred to the Enforcement Branch in May 2009.
• Responsible for MOU negotiations, including the update of existing MOUs, relating to the administration of OGD import requirements.
• Responsible for the approval and disclosure to OGDs of import information extracted by Statistics Canada from CBSA systems.
• Responsible for the disclosure and reporting of targeting results to OGDs.
• Responsible for ensuring compliance with the regulations regarding OGD import and export programs.
• Responsible for commercial release policy and for policy relating to the Administrative Monetary Penalty System.
• Responsible for liaison with the Department of Finance and Statistics Canada on issues concerning the Canadian classification numbering system.
• Sponsor of the Single Window Initiative (development of the CBSA-OGDs interface).

Enforcement Branch

• Responsible for the production and update of the CBSA Enforcement Manual and other policies related to enforcement priorities.
• Responsible for the production of intelligence information.
• Responsible for the Customs Memorandum D19-9-2; the responsibility for this memorandum was transferred to the Enforcement Branch in May 2009.

Operations Branch

• Responsible for regional program delivery, including the administration of OGD requirements on imports, and the detection, interdiction, storage and disposal of non-compliant goods.
• Responsible for the National Risk Assessment Centre and for: 
  • The input and monitoring of OGD requested targets within ACROSS. Target and examination results are reported back to the OGDs through the Partnerships Division.
  • Maintenance of the machine release exclusion profiles control.

Human Resources Branch

• Responsible for the provision of support to the program areas in the development of training products.

Innovation, Science and Technology Branch

• Responsible for IT system maintenance of ACROSS and CCS.
• Responsible for the development of the Single Window Initiative.

Appendix B: OGD and Commodities Included in the Audit

OGD	Commodity	Legislation	D memo
Health Canada	Restricted and controlled drugs (Health Protection and Food Branch)	Food and Drugs Act Food and Drug Regulations Natural Health Products Regulations	D19-9-1 D19-9-2
	Controlled substances and precursors (Office of Controlled Substances)	Controlled Drugs and Substances Act Narcotic Control Regulations Precursor Control Regulations
Public Health Agency of Canada	Human pathogens	Human Pathogens Importation Regulations Human Pathogens and Toxins Act (received Royal Assent on June 23, 2009)	None
Environment Canada	Endangered species (Convention on International Trade in Endangered Species of Wild Fauna and Flora)	Wild Animal and Plant Protection and Regulation of International and Interprovincial Trade Act	D19-7-1
	Ozone-depleting substances	Ozone-Depleting Substances Regulations	D19-7-2
	Hazardous waste	Export and Import of Hazardous Waste and Hazardous Recyclable Material Regulations	D19-7-3
Canadian Nuclear Safety Commission	Radioactive materials	Nuclear Safety and Control Act and related regulations	D19-2-1
Canadian Food Inspection Agency	Food, plant, animal products, live animals and animal pathogens. The Canadian Food Inspection Agency administers fish imports for the Department of Fisheries and Oceans for electronic release requests. Acts and regulations too numerous to list.		D19-1-1 D19-8-2
Natural Resources Canada	Energy-using products	Energy Efficiency Act and Regulations	D19-6-3
	Rough diamonds	Export and Import of Rough Diamonds Act and Regulations	D19-6-4
	Explosives	Explosives Act and Regulations	D19-6-1
Department of Foreign Affairs and International Trade	Military style firearms and other military application weaponry	Export and Import Permits Act Import Control List(items 70 to 73)	D19-10-2
Royal Canadian Mounted Police - Canadian Firearms Program	Firearms	Firearms Act Customs Tariff	D19-13-2

 

Appendix C: Audit Criteria

 

Lines of Enquiry	Criteria
Governance – Adequacy of the control framework	Roles, responsibilities and accountabilities are defined, communicated and understood. Policies and procedures are documented, communicated, up-to-date and readily available. Administrative agreements (MOUs) have been negotiated with OGDs (if needed) and are up-to-date. Monitoring, reporting and risk assessment processes are in place: To detect non-compliance by commercial importers (either within the CBSA or OGD). To measure CBSA performance of the achievement of program objectives.
Compliance – Effectiveness of the control framework	The release of properly accounted for imports subject to other government department requirements is administered in accordance with acts, regulations, MOUs, and established policies and procedures. Where applicable, AMPS (C071) penalties are issued for imports not meeting OGD requirements (permits, licences, certifications, authorizations or any other OGD requirement). Permits, licences, certificates, authorizations or other documents are returned by the CBSA to the OGD, where applicable. Systems, processes and tools in place provide adequate control and promote compliance.

Appendix D: Acronyms

ACROSS

Accelerated Commercial Release Operations Support System

AMPS

Administrative Monetary Penalty System

BSO

border services officer

CA

Customs Act

CBSA

Canada Border Services Agency

CCS

Customs Commercial System

FIRM

Facility for Information Retrieval Management

MOU

Memorandum of Understanding

MRS

Machine Release System

NRAC

National Risk Assessment Centre

OGD(s)

other government department(s)

Appendix E: Definitions

In the context of this report the following terms are used as follows:

Release controls

Pre-release or release processes, affected by the Accelerated Commercial Release Operating Support System (ACROSS) or by the border services officer review of import permits, licences, certificates or other authorizations prior to release.

Post-release controls

Processes that happen after release, such as data transfers, import monitoring or development of targets. Note that target development and input of targets into ACROSS feeds back into release controls.

Review by border services officer

A process where border services officers review the release requests before they are released, to enforce OGD requirements and to detect and interdict non-compliant imports.

Release request

The paper or electronic information presented to the CBSA to obtain release of an import.

Transaction number

The unique identifying number applied to a release request.

Goods or imports

These terms are used interchangeably and refer to shipments of merchandise that are presented to the CBSA for release.

Manual paper-based process

A process where import permits, certificates, licences or other authorizations are presented to the CBSA on paper, along with a paper release request.

Monitoring

The review of imports using CBSA systems and/or data, by any means, by people or systems, with the intent to detect non-compliant imports or emerging areas of non-compliance. Monitoring may be conducted at any time in the import process (pre-release, time of release or post-release).

Performance measurement

An objective assessment of the achievement of program objectives, such as how well border controls are applied and whether they achieve expected results. For this program area, post-release monitoring of imports would provide objective information relevant to performance.

Detect

The act of finding an import that was non-compliant.

Interdict

The act of stopping a non-compliant import from being released.

Notes

1. Personal goods and those released verbally or by Order-in-Council are not accounted for in CCS.[Return to text]
2. A border release control process refers to those that happen prior to, or at time of release, and are effected by the Accelerated Commercial Release Operating Support System (ACROSS) or border services officers. A post release control process refers to those happening after the import is released, such as monitoring and target development. Post release controls may feed back into and become a border release process, for example active targets entered into ACROSS. [Return to text]