The Customs Act

AuthorMohan Prabhu
A | Introduction
Chapter 1
The Customs Act1
Customs law, which once included both duty imposition and collection of
the revenue thus generated, is among the oldest Canadian laws and is a con-
tinuation of English law that governed before Canada received independent
legislative authority. The Customs Act (enforcement provisions) and the Cus-
toms Tarif‌f2 (collection process) are, together, the overarching statutes that
govern the importation of all goods into Canada from anywhere outside
Canada. Even the English customs law is very ancient and dates from the
time of that country’s maritime trade and commerce, especially when the
earliest Merchant Shipping Acts were enacted. Hence, the import systems,
procedures, and principles have a long history, some aspects of which con-
tinue even to modern times.3
Canada adopted the international system of valuation and the harmon-
ized classif‌ication and coding system. This resulted in signif‌icant changes to
earlier statutes and led to the enactment of the current Customs Act in 1985
and the Customs Tarif‌f in 1996.
This chapter describes the important provisions of the Customs Act,
with which every person who imports goods into, or removes goods from,
Canada must comply. “Goods” are def‌ined by section 2 of the Act to include,
1 RSC 1985, c 1 (2d Supp), as am RSC 1985, c 7 (2d Supp), and subsequently.
2 SC 1997, c 36.
3 The Imperial Customs Act, 1825 (UK), 6 Geo IV, c 105 had replaced a long list of Customs Acts
going back to Richard II, e.g., 1761 (UK), c 24; 1763 (UK), c 19; 1774 and 1808 (UK), c22.
B | Obligation to Report
for greater certainty, “conveyances, animals and any document in any form.”
The primary function of the Act is to set out ground rules for the determina-
tion of the value of goods classif‌ied under the thousands of tarif‌f items listed
in the Schedule to the Customs Tarif‌f, and to prevent the evasion of duties
and taxes by elaborate means, ranging from non-declaration of goods when
arriving in Canada from outside Canada to undervaluation, smuggling, and
similar illegal schemes. The Act is supplemented by several other statutes
regulating the importation of specif‌ic commodities. The most important of
those statutes are covered in subsequent chapters.
While the Customs Act is the basic statute regulating imports, the term
“import” itself is not def‌ined in it. However, there is settled law enunciated
by courts def‌ining its meaning in varying situations. Courts have held that
bringing goods into Canada or within Canadian jurisdiction, whether they
are landed in Canada or not, or where goods were mistakenly taken out of
Canada by a traveller who unwittingly crossed into the territory (or even
territorial waters) of another country, such as the United States, amounts
to importation, thereby subjecting them and the goods to the requirements
and obligations of the Act. The interpretation of this term, however, varies.
Regarding liability for duties and taxes, courts have adopted a restrictive in-
terpretation, but when goods, especially drugs, are smuggled or money or
monetary instruments in excess of the permissible limits are carried with-
out reporting, a mere crossing of the border suces.
Customs law imposes three basic obligations: (1) to report goods to cus-
toms, (2) to make due entry of them, and (3) to pay duties and taxes that are
applicable. These obligations are discussed in the paragraphs that follow.
The f‌irst obligation is to report all goods that are imported into Canada.
This obligation is set out in sections 12 to 16. The obligation is so rigorous
that courts have gone so far as to hold that goods previously imported and
duly reported must be reported each time a traveller returns to Canada with
them.4 If there is no customs oce at the point of crossing into Canada,
then the traveller must report to the nearest customs oce that is open for
business at the earliest opportunity before unloading them.5 Goods must be
reported in the prescribed form to the nearest customs oce, and when re-
4 Kong v Canada (1984), 10 DLR (4th) 226 (FCTD) [Kong].
5 Customs Act, s 11(1).
Chapter 1: The Customs Act
B | Obligation to Report
porting, the person must answer truthfully any question asked by an ocer
with respect to the goods.6
The reporting requirements may be waived by regulations and do not
apply if the person has reported at a customs oce outside Canada in ac-
cordance with the regulations; however, an ocer may require the goods to
be reported again.
The reporting requirements also do not apply if the person is entering
Canadian waters or the airspace over Canada while proceeding directly from
a place outside Canada to another place outside Canada, unless required by
an ocer to report.
1) Who Must Report?
The obligation to report is imposed by sections 11 and 12 on every person
who arrives in Canada by any means from a place outside Canada; on every
person who is importing goods where the goods do not accompany that per-
son; and on every person in charge of a conveyance (vehicle, aircraft, boat)
arriving in Canada, if the goods are in that person’s possession, or in accom-
panying baggage, or are being carried in the conveyance, as the case may
be.7 Section 12 is likely the provision that an individual traveller, whether
resident or visitor, is most familiar with and which has generated many ad-
ministrative and criminal proceedings, because a violation of the reporting
requirements can lead to forfeiture of goods and if there is deliberate con-
cealment, even criminal prosecution.
Goods imported by courier or by mail must be reported by the person
exporting the goods to Canada.8
Section 12 of the Proceeds of Crime (Money Laundering) and Terrorism
Financing Act9 (Proceeds of Crime Act) contains an analogous provision. If a
traveller fails to report money or monetary instruments that he or she car-
ries, as required by the Cross-Border Currency and Monetary Instruments Re-
porting Regulations,10 where the amount exceeds $10,000, the excess can be
6 Ibid.
7 Ibid, s 12; Reporting of Imported Goods Regulations, SOR/86-873, am SOR/96-156, am
8 Accounting for Imported Goods and Payment of Duties Regulations, SOR/86-1062, am SOR/96-
46, SOR/2002-130, SOR/2003-241, SOR/2007-181.
9 SC 2000, c 17.
10 SOR/2002-412, am SOR/2003-358.

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