We have recently become aware of 4 cases where individuals (mostly Canadians) have been notified that their NEXUS memberships have been cancelled by U.S. Customs and Border Protection (“U.S. CBP”) because they failed to declare the export of a vehicle from the United States. The three scenarios where this has arisen are:
1) A Canadian with a seasonal home in the United States owned a vehicle that was plated in the United States. The Canadian drove the vehicle to Canada and complied with Canadian law to register the vehicle with the provincial motor vehicle registry (and obtained provincial plates for the vehicle);
2) a NEXUS Card holder moved to Canada and a U.S.-registered vehicle was part of the property moved to Canada. The NEXUS Card holder drove the vehicle to Canada and complied with Canadian law to register the vehicle with the provincial motor vehicle registry (and obtained provincial plates for the vehicle); and
3) a Canadian purchased a vehicle on Craigslist from a U.S. person. The vehicle was plated in the United States. The Canadian drove the vehicle to Canada and complied with Canadian law to register the vehicle with the provincial motor vehicle registry (and obtained provincial plates for the vehicle). The U.S. seller filed paperwork in the United States giving the name of the new owner of the vehicle.
There are other circumstances where this issue can arise.
The step of registering the vehicle in Canada resulted in a notification being sent to the United States and that informed the U.S. CBP that the vehicle was exported. U.S. CBP then issued a monetary penalty against the person who owned the vehicle (not necessarily the person who was driving the vehicle at the time of export and failed to report the export). 19 CFR §192.3(b) allows for the imposition of a monetary penalty for failure to report the export of a self-propelled vehicle, vessel or aircraft. See the U.S. CBP information about the reporting requirements.
The term “self-propelled vehicle” ( 19 CFR § 192.1) is defined as follows:
“Self-propelled vehicle includes any automobile, truck, tractor, bus, motorcycle, motor home, self-propelled agricultural machinery, self-propelled construction equipment, self-propelled special use equipment, and any other self-propelled vehicle used or designed for running on land but not on rail.”
The penalty of $500.00 is imposed for failing to comply with the requirement to report the export to U.S. CBP at the time of export.
The purpose of the reporting requirements is to prevent the export of stolen vehicles, vessels and aircraft. This means that individuals who are exporting their own vehicles for personal use, while they still must report the export, they are not the targets of the reporting requirements.
The NEXUS Card holder will receive a Department of Homeland Security, U.S. Customs and Border Protection, Notice of Penalty or Liquidated Damages Incurred and Demand for Payment. This penalty document can be appealed within 60 days. The penalty amount may be reduced or reversed.
U.S. CBP then treats the failure to report the export of the vehicle, vessel or aircraft as a customs infraction against the owner of the vehicle, vessel or aircraft and cancels their NEXUS membership. The NEXUS Card holder can appeal the NEXUS cancellation to the U.S. CBP Ombudsman.
For more information or for help to appeal the NEXUS cancellation, please contact Cyndee Todgham Cherniak at 416-307-4168 or at email@example.com.