Cross-border Goods Reporting Rules

Summary#

The federal government published a proposal for the Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The draft sets rules on how and when goods must be declared at the border, what records businesses must keep, how retention notices are given, and what penalties can apply; the public may comment for 30 days after the notice published on November 30, 2024.

What it does#

• Requires declarations about imported or exported goods to be made at the same time and in the same way they are reported under the Customs Act.
• Allows the person in charge of a non‑commercial passenger vehicle to make a declaration by radio or phone in specific situations.
• Sets record‑keeping rules for people and businesses involved in importing, exporting or producing goods for cross‑border movement, including:
  • Keep basic records on origin, purchase, cost, payments and sales until the sixth anniversary of import or export.
  • Extra bookkeeping for businesses that handle imports under accounting systems (CSA importers).
  • Additional inventory and transaction records for sufferance warehouses and bonded warehouses while goods are stored there.
  • Producers, suppliers, distributors and consumers who sign certain customs certificates must keep production and sourcing records for the same sixth anniversary period.
• Specifies how records must be stored (in line with rules in the Income Tax Act and the Customs Act where referenced).
• Sets how a retention notice must be given (hand delivery, registered mail, or left at an entity’s business) and timing rules:
  • For goods sent by courier or mail, the notice must be given within 60 days of import or export.
  • After a retention notice is given, the retention period is 30 days for courier/mail cases and seven days in other cases.
• Creates an administrative monetary penalty scheme for breaches (failure to declare or keep required records). Penalties:
  • Range from $1 to $500 if the person fully discloses the facts and there is no sign the breach was intentional.
  • Otherwise, the penalty is the largest of the fair market value of the goods, the declared value, or the value of the payment transaction.
• Sets time limits for enforcement and appeals, including a two‑year limit to start proceedings and a 30‑day appeal window to the Federal Court for certain decisions.

Who's affected#

• Businesses that import or export goods — including customs brokers and CSA importers.
• Operators of sufferance warehouses and bonded warehouses.
• Producers, suppliers, distributors and consumers who sign customs certificates or are involved in export supply chains.
• Carriers and people in charge of non‑commercial passenger conveyances (e.g., ferry or private passenger vessels) when declarations are made by radio or phone.
• Couriers and postal services handling international mail and parcels.
• Travellers carrying goods across the border could be affected if their items trigger reporting or retention.
• Customs officers and the Department of Finance (sponsor) will use these rules to manage reporting and penalties.

If any part of who is covered is unclear from the proposal, that uncertainty remains until the rules are finalized.

Why it matters#

• It increases and clarifies record‑keeping duties for many businesses involved in cross‑border trade. That can mean more paperwork and administrative cost.
• It makes it easier for authorities to hold people and companies accountable for undeclared or suspicious cross‑border goods by tying penalties to the value of the goods or transactions.
• For travellers and small businesses, short retention timelines (as little as seven days) and strict notice rules could mean quick action is needed if a retention notice is issued.
• The stated goal is to improve traceability of goods to help detect money laundering and terrorist financing. This is a proposed rule, so it is not in force yet; the government is seeking public comments.