Canada-U.S. Blog Trade Lawyers Cyndee Todgham Cherniak and Susan K. Ross

Do Not Pass GO: Forgetting Your Receipts Gets You A Ticket To CBSA Secondary Inspection

Posted in Customs Law, NEXUS, valuation

We help a lot of Canadian citizens and Canadian residents who get their NEXUS Cards revoked, confiscated or cancelled by the Canada Border Services Agency (“CBSA”).  One issue that comes up time and time again is under-declaration because the traveler did not have all of their receipts printed and organized for primary inspection. While there is no requirement in Canadian border laws that every traveler have every receipt neatly organized, it certainly expedites the entry/declaration process and allows the Primary CBSA officer to determine that the traveler is lower risk.  The Primary CBSA officer must assess whether each and every traveler should be sent for Secondary Inspection.  Not having receipts is a red flag that may get you sent to Secondary Inspection.  Lack of attention to detail increases the likelihood of an error (and that an enforcement action will be taken and your NEXUS card revoked/cancelled).

In most cases we have seen, the traveler guessed at the amount spent or received outside Canada and did not guess correctly. The traveler forgets goods that have been purchased (a lot of goods were purchased).  The traveler forgets the prices paid (often did not look at the price tags and just signed the credit card receipt).  The traveler forgets one store or package entirely. There is more than one person in the vehicle and the driver (Dad) does not know everything that the others have purchased.

Often the traveler informs the Primary CBSA officer that they do not know the amount as they do not have the receipts (often results in an immediate trip to Secondary Inspection and the traveler cannot pass “Go”).  Sometimes, the traveler says all the receipts are in the bags and they are “in the back of the vehicle”.  This too often results in a trip to Secondary Inspection. Sometimes, the traveler is asked by the Primary CBSA officer for the receipts and they start going through their purse or wallet or bags.  This too will result in a trip to Secondary Inspection unless there is a single small purchase and the bags are visible to the Primary CBSA officer (one small grocery bag declared for $50 might be accepted unless the Primary CBSA officer thinks there are additional shopping bags in the trunk).

Travelers often make the situation worse by not communicating clearly,  The traveler does not focus on the important facts to the Primary CBSA officer (what goods are being imported and what is the value).  The traveler talks about the ordering process and having to return goods.  The traveler tells a long rambling story.  Often the traveler does not speak effective English and the words chosen lead to confusion.  If the Primary CBSA officer cannot understand what a person is saying, they may be sent to Secondary Inspection where Secondary CBSA officers can get an interpreter or spend more time with the traveler to understand what is being imported and at what value(s).

The Primary CBSA officer requires that the traveler provide a value for duty and writes it down of the E67 Referral Slip – and, the number provided is too low when the traveler is not organized.  On the spot answers are requested and the answers given in a rush are often in error.  Over-estimating is not often a problem.  Under-estimating is a problem.  Subsection 12(1) of the Customs Act requires that the traveler report all goods acquired or received outside Canada.

The traveler sometimes frustrates the CBSA by having to look up receipts on their smart phone/electronic device (in situations where goods were ordered online to be delivered to a location in the United States).  This makes it difficult for the CBSA to match the invoiced items against what is in the vehicle.  Sometimes not all the goods have been shipped – but the CBSA imposes seizure penalties on the entire amount because of confusion.  This can be appealed if it can be proven that some of the “seized goods” were not actually shipped and in the vehicle at the time of the enforcement action.

Travelers often find that orders have been combined in a single shipment and they did not know this prior to the Secondary Inspection.  This problem can be avoided if the traveler would open the packages prior to arriving at the border.  It is really important to know all the goods in your possession prior to arriving at the CBSA Primary Inspection Booth.

Sometimes, the traveler declares the goods that have been purchased (e.g., shoes, shirts, pants, groceries, alcohol) and the CBSA completes paperwork stating that goods have not been declared.  If all the goods have been declared (and the Primary CBSA officer writes the goods declared on the E67 referral slip, then the issue is a valuation issue if the amount declared in incorrect.  The traveler can appeal the enforcement action if the CBSA officer states that goods were not declared when they were declared and the CBSA’s own evidence supports the fact the declaration was made.

We recently, in an appeal of an enforcement action, successfully showed that a traveler had reported all goods by showing half the order was not shipped. The traveler declared $CDN 1,000 and the goods imported into Canada was close to that figure.  The CBSA had seized all goods on the invoice and we were able to show that some of the goods listed on the invoice had not yet been shipped.  As a result, the goods were not being imported into Canada.

We have in many cases successfully represented travelers whose NEXUS cards were revoked due to an alleged failure to declare certain goods.  Each case is fact specific.  In some cases, all the goods (by category) had been properly declared. In some cases, the seizing CBSA officer seized goods that had been properly declared and was on the E67 referral slip as being declared.  In some cases, the seizing CBSA officer took the position that alcohol or tobacco was not declared when it was on the invoice handed to the Primary CBSA officer.  In some cases, the CBSA’s math was incorrect. In some cases, the CBSA could not explain their enforcement paperwork and the benefit of the doubt was given to the traveler.   In some cases, the seizing CBSA officer did not read notes on the invoices showing goods had not been shipped.  In some cases, the CBSA officer’s Narrative Reports and handwritten notes were helpful in supporting the traveler’s statement of facts that they properly declared goods.  In some cases, goods were purchased through Craigslist, eBay and other websites and the prices were lower than the CBSA officer expected (but the declared value could be shown to be truthful).

In order to reduce the likelihood of an enforcement action and the cancellation of your NEXUS Membership, we have a few tips or recommendations:

Recommendation 1: If you have purchased goods on the Internet and have them delivered to the United States, print your receipts before you go to pick up the goods.  When you pick up the goods, open the boxes and compare the package against the printed receipts.  Identify goods for which you failed to print a receipt prior to traveling to pick up the goods. Make reference of what was shipped and what was not shipped.  Make note if multiple orders were combined in a single shipment.  Turn the receipt over and write down everything in the packages being imported into Canada and the values.  Don’t forget to covert foreign currencies into Canadian dollars.  Remember the Customs Act requires that the CBSA must use the Bank of Canada rate for converting currency to Canadian dollars.  This would be the value for duty of the goods being imported (and any receipts from shopping on the trip to pick up the packages and any vehicle repairs that day). When you arrive at the border, show the Primary CBSA officer your lists of goods, values and calculations.

Recommendation 2: If you have enjoyed a shopping trip outside Canada, put all of your receipts in the same place (e.g., in your wallet, in a pocket of your purse, in an envelop that you bring with you, etc.).  Before you return to Canada, take all of the receipts, organize them and calculate the value to report to the CBSA. Don’t forget to add the toothpaste you bought and every complimentary item that you took from the hotel room (e.g., coffee, tea, soap, shampoo, lotion, etc.).  Write down everything you have purchased or acquired that is being imported into Canada and the values. When you arrive at the border, show the Primary CBSA officer your lists of goods, values and calculations.

Recommendation 3: Use a NEXUS Traveller Declaration Card (TDC): Canadian residents who are members of the trusted traveler programs may complete a TDC to declare goods purchased and/or acquired outside Canada and must give the completed TDC to the Canada Border Services Agency (CBSA).  At many land border crossings, there is a secure deposit box in which to submit the completed forms in the NEXUS lane.  Before you return to Canada, take all of the receipts, organize them and calculate the value to report to the CBSA.  The TDC categorizes goods – you should prepare a summary of goods and values according to the TDC.  Write down everything you have purchased or acquired that is being imported into Canada and the values and complete the TDC before you head for the border. When you arrive at the border, submit the TDC as required (sometimes in the drop box and sometimes it is handed to the Primary CBSA officer in the NEXUS booth).

If you have any question, please contact Cyndee Todgham Cherniak at 416-307-4168 or a Cyndee@LexSage.com.  If your NEXUS Card has been revoked, confiscated or cancelled, please refer to How Can I get My NEXUS Card Back When It Is Cancelled/Confiscated By The CBSA?  See also Canadian Resident NEXUS Travelers Should Bring Traveler Declaration Card To Report Purchases To The CBSA.  See also Canadians Living In Border Cities At Risk For NEXUS Confiscations.  There are other articles about NEXUS and customs declarations on the LexSage website.