Cross-border Goods Reporting Rules

Summary#

The federal government published a proposal called the Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It would set how and when people must report certain cross‑border goods, what records to keep and for how long, and the penalties for not following the rules. The proposal is open for public comment for 30 days after publication (November 30, 2024).

What it does#

• Requires declarations about certain imported or exported goods to be made at the same time and in the same manner as reporting under the Customs Act.
• Allows the person in charge of a non‑commercial passenger conveyance to declare goods in cases where Customs reporting is done by radio/telephone or where a traveller presents themselves by phone.
• Sets detailed record‑keeping rules for people who import, export, produce, supply, distribute or store goods for purposes covered by the Act. Most records must be kept until the sixth anniversary of the relevant import, export, or certificate date. Records to keep include origin, purchase, value, payments, sales/disposal, and tax books.
• Adds extra record rules for:
  • CSA importers (additional inventory, vendor/consignee lists and accounting records).
  • Sufferance and bonded warehouse operators (records of receipts, removals, inventory movements and handling).
  • Producers, suppliers, distributors and consumers who sign certain customs certificates (production records, materials, advance rulings).
• Specifies how records must be kept, referring to the record formats in the Income Tax Act and the Customs Act.
• Sets rules about retention notices: a retention notice for courier or mail shipments must be given within 60 days of import or export; the retention period after notice is 30 days for courier/mail shipments and seven days in other cases.
• Creates an administrative monetary penalty system for certain violations:
  • Officers can issue a notice of violation; the notice explains the penalty and review rights.
  • If a person fully discloses and the breach appears unintentional, penalties range from $1 to $500.
  • Otherwise the penalty is the greater of the fair market value of the goods, the declared value, or the value of the financial transaction used to pay for the goods.
  • Multiple violations on the same conveyance can be treated as one violation; a due diligence defence is not available.
  • Debts from penalties can be recovered; recovery proceedings must start no later than five years after the debt becomes payable. Proceedings for violations must begin within two years after the subject matter arose.
• Says these Regulations would come into force on the same day that section 285 of the Fall Economic Statement Implementation Act, 2023 comes into force (the exact date was not specified in the notice).

Who's affected#

• Businesses that import or export goods, including manufacturers, producers, suppliers, distributors and retailers involved in cross‑border trade.
• Licensed warehouse operators (sufferance and bonded warehouses) and courier/mail companies that handle international shipments.
• Customs brokers and anyone who completes customs certificates or advance rulings.
• Travellers and operators of non‑commercial passenger conveyances in situations where goods are reported by phone or radio.
• Government customs and enforcement officers who will apply and enforce the rules.

If it is unclear whether a specific activity is covered, the notice ties coverage to purposes listed in the Act; affected parties should review the proposed text or seek advice.

Why it matters#

• It tightens how goods linked to money‑laundering or terrorist‑financing risks must be reported and documented. That makes it easier for enforcement agencies to trace the origin, movement and value of goods.
• Many businesses would face clearer, and in some cases expanded, record‑keeping duties. That could increase compliance costs and administrative work, because records must generally be kept for six years.
• Penalties are tied to the value of the goods or transactions, which could mean large financial consequences in some cases rather than only fixed fines.
• The proposal is not law yet. The public has 30 days after publication (November 30, 2024) to make written representations.