March 2019

Higher penalties coming soon for non-compliance
with trade regulations

We are only a couple of weeks away from higher Administrative Monetary Penalties (AMPS) for 22 contraventions related to commercial trade, implemented after a study showed the existing penalties were not in line with non-trade commercial offences.

As an example, the revised penalty amounts will, where CBSA determine the importer had “reason to believe” an error occurred, increase from $150 per occurrence (i.e. shipment) to $500 each to a maximum of $25,000 for a 1st level penalty.

Details on the contraventions and the related penalties, which come into force April 1, 2019, are provided in a table issued by the CBSA (Canada Border Services Agency) with descriptions of each penalty listed below.

Table 1 – Changes to Select Administrative and Monetary Penalty Levels

For a detailed description of the above mentioned penalties, please click here.

In addition, the CBSA will reset the penalty level to the first level for contraventions mentioned above that occur on or after April 1, 2019.  This is to avoid unanticipated impacts on industry that could occur by issuing second and third level penalties at higher levels than previously indicated.

The new AMPS regime takes into account feedback from several key stakeholder groups, including the Canadian Society of Customs Brokers, the Canadian Federation of Independent Business, the Canadian Association of Importers and Exporters, and the Association of International Customs and Border Agencies.  Company representatives were consulted as well through the Border Commercial Consultative Committee.

We offer professional Customs Consulting services to assist you in becoming fully compliant.  Remember, investing in compliance is always less costly than paying for non-compliance.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Verification audits for companies claiming CETA benefits

Are you among the many companies that have claimed CETA benefits following the implementation last September of the Canada-European Union Comprehensive Economic and Trade Agreement (CETA)?

If the answer is yes, you are certain to receive a CETA Verification Audit by either the Canada Border Services Agency (CBSA) or the European Union (EU), based on whether you were the importer or exporter in the transaction.  You also need to know that Origin verifications under CETA are conducted by Customs in the exporter’s country, i.e. the European Union conducts origin verifications of EU exporters and the CBSA conducts verifications of Canadian exporters.

This is very different than the auditing process under the North American Free Trade Agreement (NAFTA).  With that system, U.S. Customs and Border Protection (CBP) can ask for permission from the CBSA to visit the premises of a Canadian exporter to verify statements for goods certified as NAFTA qualifying, and the CBSA can request permission from CBP to visit a U.S. supplier’s premises.

The auditing process is expected to promote more fairness.  It also assures that any origin disputes will be heard in the exporter’s home country rather than being determined by foreign laws and courts.

For more information, contact Brian Rowe, Director – Customs Compliance & Regulatory Affairs.

Ocean carriers strive to keep capacity in check

The major ocean carriers are taking a cautious approach to capacity additions in the hope that a better supply/demand balance will lead to higher freight rates to offset ongoing losses.  This means there may be both supply additions and capacity reductions, depending on the trade lane, with the latter being achieved by

• implementing void/blank sailings
• scrapping out-of-date ships (450,000 TEUs could be sent to the scrap yard in 2019 and an additional 500,000 could be taken out of service in 2020)

The ongoing U.S.-China trade war helped boost demand in late 2018, but the immediate future looks less promising for three reasons:

• Fears tariffs could go up significantly
• Infrastructure bottlenecks
• Front loading ahead of the implementation of low-sulfur fuel regulations next January

For more information, contact Debbie McGuire, Manager – Freight Solutions.

Port congestion a headache for trucking companies

Trucking companies that handle the movement of containers from an ocean port to another destination (rail ramp, warehouse, company location) have announced they are no longer willing to absorb extra costs that are a direct result of port congestion.

The key concern is the extended time required to retrieve or return containers.  There are also complaints about the movement of containers to new locations with no warning and a general lack of communication, leading to extra costs for rail storage, dead runs, demurrage, and pre-pulls.

For more information, contact David Lychek, Manager – Ocean & Air Services.

Why Canadian lobsters are hot sellers in China

Sales of Canadian lobsters to China are up – way up – thanks to a tariff China placed on U.S. lobsters in retaliation for U.S. duties on Chinese imports.

Demand for our crustaceans is so high that the usual hub for lobster freight forwarding, Halifax’s Stanfield International Airport, has been overwhelmed and the excess demand had to be handled with passenger aircraft flying out of Moncton and Montreal.

A single plane can carry up to 150,000 pounds of lobster, which typically gets from the lobster trap to customers in Asia within 40 hours.

	The port in our mystery city is one of the world’s most important freight hubs, receiving some 2000 vessel calls and handling 7.5 million containers annually.

Global Spotlight Quiz

How many clues do you need to name the city within a city that contains one of the world’s largest seaports?

• The port, which opened in 1911, is the tenth-busiest in the world and a premier gateway for trans-Pacific trade.
• The port became much busier after the Panama Canal opened in 1914.
• One of the best cities for young people to live – 17% of the residents are between the ages of 25 and 34.
• It almost never rains – on average the sun shines 345 days a year.
• Named a Top 10 Social Media City two years in a row.
• Waterfront attractions are a magnet for tourists that number in the millions annually.
• The original Queen Mary is docked here and is now a full service hotel and entertainment venue.

  Click here to see the answer

For more information about shipping freight to or from this city, contact Debbie McGuire, Manager – Freight Solutions.

Quick Tip

Freight charges by mode

Each mode of transport is different, with a different “rule” on how to determine the cost of moving freight under each.

Freight charges are typically calculated based on the following weight to measure rules:

• Ocean Freight:  1,000 kg or 1 cubic meter, whichever is greater or in the case of freight from Asia, 600 kg or 1 cubic meter
• Airfreight:  1 kg or 6,000 cubic centimeters, whichever is greater
• Truck Freight:  Per pound, per skid or per trailer space

Keep the differences in mind the next time you need to calculate the cost of your next freight move  – or contact Cathy Fong, Manager – Freight Pricing for help on how to optimize your next shipment.

At Your Service: Vincent Kwong, Ocean Imports & Exports

	Vincent Kwong, Ocean Imports & Exports

Vincent Kwong joined Universal’s Head Office Ocean Services team in July 2018.  He has a solid background in ocean import freight handling and has recently started to coordinate ocean exports, which has made him an extremely valuable team member.  With Vincent’s ability to coordinate both import and export ocean freight, he is able to meet a variety of our clients’ needs and answer any questions they may have in regards to such moves.

Vincent recently obtained a CIFFA Certificate in International Freight Forwarding.  This involved completing two terms of study, Fall 2018 and Winter 2019, which normally takes eight months of study – Vincent completed this in five months and at an Honours level.

Vincent can be reached by phone (905) 882-4880, ext. 201 or by email.