Customs StopI receive many calls from clients who have disputes with the Canada Border Services Agency (“CBSA”) at the Canadian border.  Some of the most amazing stories relate to seizures of alcohol (beer, wine, liquor) and tobacco (usually cigarettes).  In most of the cases, I wonder aloud why the CBSA Officer could not use common sense and discretion.  Why seize the alcohol and tobacco with no terms of release (which is the common enforcement action taken as far as the stories I hear)?  As a Canadian taxpayer, I would prefer that the CBSA collect duties and taxes and permit the person to take the alcohol and/or tobacco home.  It makes no sense to me to seize the alcohol and tobacco and put it in storage for destruction.  How does that benefit the public bank account?

In many of the cases involving alcohol and/or tobacco, the CBSA Officer does not take a common sense approach and seizes the alcohol/tobacco and NEXUS Cards.  For example:

  1. A person properly reported on his E311 Declaration Card (form completed on the airplane) that he made a purchase of $23.00 and he checked the box that he was within his exemption limits because he read the form and believed his answer was correct.  The CBSA Officer seized the bottle of alcohol because he was outside Canada for less than 48 hours and the exemption did not apply.  The CBSA Officer also confiscated his NEXUS Card.
  2. A person properly reported on his E311 Declaration Card (form completed on the airplane) that he made a purchase of $85.00 and he checked the box that he was within his exemption limits because he miscalculated the number of hours he was away.  He counted the number of travel hours starting with his first domestic flight within Canada to Toronto Pearson Airport to travel to the United States.  He was actually away for just less than 48 hours. The CBSA Officer seized the alcohol on the basis that the exemption did not apply.  The CBSA Officer also confiscated his NEXUS Card.
  3. A person purchased a bottle of alcohol at the Toronto Pearson airport duty free store in Canada before he traveled to the United States.  The person had intended to give the bottle as a gift to  friend.  However, he did not meet with the friend (while traveling on business) and brought the bottle of alcohol back to Canada.  He reported the value of the alcohol on his E311 Declaration Card and indicated he was within his exemption limits.  He did not count the alcohol for the purposes of the exemption because it was purchased in Canada. The CBSA Officer seized the bottle of alcohol because he was outside Canada for less than 48 hours and the exemption did not apply. The CBSA Officer also confiscated his NEXUS Card.
  4. A person traveled with his girlfriend who lives at a different address.  They were outside Canada for more than 48 hours. He purchased 4 bottles of rum at a duty free store before returning to Canada.  He completed an E311 Declaration Card on the flight and his girlfriend completed a separate E311 Declaration Card. He properly declared the value of the rum on his E311 Declaration Card.  Both he and his girlfriend checked the box that they were within their exemption limit. He was referred to the Secondary Inspection Area at Pearson Airport and his girlfriend was not permitted to join him.  The Secondary CBSA Officer seized 2 bottles of rum because without his girlfriend present, the man was over his exemption limit. The CBSA Officer also confiscated his NEXUS Card.
  5. A person bought a carton of cigarettes and properly reported the cigarettes on his E311 Declaration Card. He checked the box that he was within his exemption limits because he read the form and believed he could bring one carton of cigarettes.  The CBSA Officer said he incorrectly checked the box because he had 6 cigarettes in the pack he was not finished smoking.  He lost 6 cigarettes and his NEXUS card.
  6. A person traveled with 5 friends.  He bought 6 cartons of cigarettes at the duty free store outside Canada while waiting for his return flight.  He declared the value of all 6 cartons on his E311 Declaration Card.  He gathered his friends so that each could pay the applicable duties and taxes.  5 cartons of cigarettes were confiscated (with no terms of release) by a CBSA Officer after each friend was asked by the Secondary CBSA Officer to not pay the duties and taxes.  Everyone had claimed they were within their exemption limits.  Three travelers lost their NEXUS passes.
  7. A person traveled by land for a day of cross-border shopping. He purchased a case of beer and placed it in plain sight on the back seat.  When he arrived at the Primary CBSA booth, he rolled down the window for the back seat so that the Primary CBSA Officer could see the case of beer.  He declared the correct value of goods purchased as stated on his receipts.  The receipts included the beer. He was sent to the Secondary Inspection Area.  The case of beer was seized with no terms of release because the Primary CBSA Officer did not write down that he declared the beer. The CBSA Officer also confiscated his NEXUS Card.
  8. A US citizen traveled to Canada. She brought alcohol for a week-end party.  Some of that alcohol was purchased on a previous trip in Canada.  She declared the alcohol to the Primary CBSA Officer who did not write down the number of bottles.  She was allowed to keep 2 bottles of alcohol and 2 bottles were seized. The CBSA Officer also confiscated her NEXUS Card.
  9. A person returned to Canada after a day of cross-border shopping.  The person declared to the Primary CBSA Officer that he had purchased beer, which meant that duties and taxes were owing.  He was sent to the Secondary Inspection Area and was met by a Secondary CBSA Officer.  The Secondary CBSA Officer saw that he purchased beer and alcoholic cider.  The cider was seized with no terms of release (even though the person had declared alcohol exceeding exemption limits). The CBSA Officer also confiscated his NEXUS Card.
  10. A person returned to Canada after a vacation with family at California wineries.  The person received a gift of two bottles of wine (one red and one white).  The person declared an estimated value for the wine on his E311 Declaration Card. He checked the box that he was within his exemption limit.  However, the bottles were larger than 750 ml.  The CBSA Officer asked if he had read the limits and he said that he had assumed that bottle sizes were within the 750 ml requirement.  One bottle was seized with no terms of release. The CBSA Officer also confiscated his NEXUS Card.
  11. A person returned to Canada after a family holiday at Christmas.  The person received a bottle of wine from his parents as a Christmas gift.  The person declared on his E311 Declaration Card $700 and included an estimate for the bottle of wine.  He did not have the receipt for the gift (and other gifts).  The person was sent to the Secondary Inspection Area.  The Secondary CBSA Officer asked for all receipts.  He did not have a receipt for the bottle of wine.  The Secondary CBSA Officer estimated a value for the wine and took the position that the person had less than $CDN 800 but more than $CDN 700  worth of goods acquired outside Canada.  Since he only wrote $700, he under-declared.  The bottle of wine was seized with no terms of release. The CBSA Officer also confiscated his NEXUS Card.

These are just some of the many cases I have seen.  I am not talking about Al Capone volumes of alcohol being smuggled across the border.  We are talking about what happens to normal people – like you and me.  Canadians arrive back home (or visitors arrive) and the experience with the CBSA goes sideways.

I should mention that most of these cases were appealed.  Some were successful.  Some are still under appeal. In one case, it was necessary to file a judicial review application in the Federal Court to get the NEXUS Card back and an action in the Federal Court to get a finding that there had been no contravention.

Now for the CBSA’s position – because I should be fair.  The CBSA has a special concern when it comes to alcohol and tobacco.  I am not sure what that concern is – to be honest (other than the federal government and provincial governments impose excise taxes and other taxes on these items). If the governments need tax revenues, it would seem logical for the CBSA to collect the applicable duties and taxes and not take overly aggressive positions over a bottle of alcohol. The CBSA takes the position that technically, errors were made and no errors are acceptable.  CBSA Officers have discretion, they do not have to use it.  If a person technically breaches the law or the rules or a policy, the CBSA Officer is technically justified in taking enforcement action – even on a zero tolerance basis.

It is important to note that there is nothing inherently wrong with importing alcohol and tobacco. A traveler can import as much as they wish.  They only have to pay the applicable duties and taxes, which often amount to a lot of money.  The question is whether the alcohol and tobacco is within a person’s personal exemption limit so that they do not have to pay duties and taxes.  The personal exemption limits are contained in the Custom Tariff HS Code 9804:

9804 – Goods acquired abroad by a resident or temporary resident of Canada or by a former resident who is returning to Canada to resume residence, for the personal or household use of that person or as souvenirs or gifts, but not bought on commission or as an accommodation for any other person or for sale, and reported by that person at time of return to Canada.

9804.10.00.00 – Duty free – Valued at not more than eight hundred dollars and included in the baggage accompanying the person returning from abroad after an absence from Canada of not less than forty-eight hours. For the purpose of this tariff item, goods may include either wine not exceeding 1.5 litres or any alcoholic beverages not exceeding 1.14 litres, and tobacco not exceeding fifty cigars, two hundred cigarettes, two hundred tobacco sticks and two hundred grams of manufactured tobacco.

9804.20.00.00 – Duty free – Valued at not more than eight hundred dollars, whether or not included in the baggage accompanying the person returning from abroad after an absence from Canada of not less than seven days. For the purpose of this tariff item: (a) goods may include either wine not exceeding 1.5 litres or any alcoholic beverages not exceeding 1.14 litres, and tobacco not exceeding fifty cigars, two hundred cigarettes, two hundred tobacco sticks and two hundred grams of manufactured tobacco, if included in the baggage accompanying the person at the time of return to Canada; and (b) if goods (other than alcoholic beverages, cigars, cigarettes, tobacco sticks and manufactured tobacco) acquired abroad are not included in the baggage accompanying the person, they may be classified under this tariff item if they are reported by the person at time of return to Canada.

9804.30.00.00 – MFN Rate is 7% – Valued at not more than three hundred dollars and included in the baggage accompanying the person returning from abroad after an absence from Canada of not less than forty-eight hours. For the purpose of this tariff item, goods shall not include those which could otherwise be imported into Canada free of duties, nor alcoholic beverages, cigars, cigarettes, tobacco sticks or manufactured tobacco.

9804.40.00.00 – Duty free – Valued at not more than two hundred dollars and included in the baggage accompanying the person returning from abroad after an absence from Canada of not less than twenty-four hours. For the purpose of this tariff item, goods shall not include alcoholic beverages, cigars, cigarettes, tobacco sticks or manufactured tobacco.

The CBSA has prepared information that travelers can find on their web-site.  The following chart is on the CBSA’s web-site and is intended to make the exemption more understandable:

Alcoholic beverage limits
(While bottle sizes vary, the amounts listed are fixed.)
Product Metric Imperial Estimates
Wine Up to 1.5 litres Up to 53 fluid ounces Two 750 ml bottles of wine.
Alcoholic Beverages Up to 1.14 litres Up to 40 fluid ounces One large standard bottle of liquor
Beer or Ale Up to 8.5 litres Up to 287 fluid ounces Approximately 24 cans or bottles (355 ml each) of beer or ale.
You are allowed to import only one of the amounts listed in the table free of duty and taxes, as part of your personal exemption.

 

Tobacco product limits
Cigarettes 200 cigarettes
Cigars 50 cigars
Tobacco 200 grams of manufactured tobacco
Tobacco sticks 200 tobacco sticks
If you bring in more than your personal exemption, you will have to pay regular assessments on the excess amount. These regular assessments can include duty and taxes, as well as provincial or territorial fees. When they calculate the amounts owing, border services officers will give an allowance for products that have an excise stamp “DUTY PAID CANADA DROIT ACQUITTÉ.

If you are 18 years of age or over, you are allowed to bring in all of the amounts listed in the table into Canada free of duty and taxes within your personal exemption.

If you include cigarettes, tobacco sticks or manufactured tobacco in your personal exemption, a partial exemption only may apply. You will have to pay a special duty on these products unless they have an excise stamp “DUTY PAID CANADA DROIT ACQUITTÉ.” You will find Canadian-made products sold at duty-free shops marked this way. You can speed up your clearance by having your tobacco products available for inspection when you arrive.

For further details on bringing back tobacco products, consult I DeclareTobacco products.

The CBSA also has prepared a Personal Exemption Mini-Guide.  However, the information on the E311 Declaration Card is not as clear as the Mini-Guide.

For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or at cyndee@lexsage.com. Alternatively, visit www.lexsage.com