The Most Common CBSA Fines and How to Avoid Them

Importing goods into Canada comes with a strict set of regulations, and failure to comply can result in costly fines from the Canada Border Services Agency (CBSA). Many businesses unintentionally violate customs laws, leading to penalties that could have been avoided with proper planning.

At Logistics and Customs Services (LCS), we specialise in customs compliance and clearance, helping businesses navigate CBSA regulations while avoiding unnecessary fines. Here are the most common CBSA penalties and how to prevent them.

1. Administrative Monetary Penalty System (AMPS) Violations

CBSA enforces compliance through the Administrative Monetary Penalty System (AMPS), which issues fines for documentation errors, misclassification, and non-compliance.

Common AMPS violations include:

• Incorrect HS Code classification → Can result in fines ranging from $150 to $25,000 per offence
  
  
• Undervaluing imports → Leads to penalties plus the payment of the correct duties
  
  
• Failure to declare goods properly → CBSA fines start at $100 and increase with repeat offences
  
  

How to avoid it:

• Ensure you use the correct HS Code by consulting a customs broker like LCS.
  
  
• Declare the full and accurate value of your goods, including freight and insurance costs.
  
  
• Keep detailed records of all past shipments to ensure consistency in reporting.
  
  

2. Late or Incorrect Import Declarations

CBSA requires timely and accurate reporting of all imports. Late filings or incorrect submissions can result in fines and shipment delays.

Penalties for declaration errors:

• Failure to submit required documentation on time → Fines start at $500
  
  
• Submitting incorrect information (e.g., missing details on commercial invoices) → Fines range from $100 to $1,000 per entry
  
  

How to avoid it:

• File all required customs documentation before your shipment arrives.
  
  
• Double-check all invoices, packing lists, and permits before submission.
  
  
• Work with LCS to ensure accurate and timely declarations.
  
  

3. Misclassification of Goods (Incorrect HS Codes)

Every product must be classified under the Harmonised System (HS) Code, which determines the applicable duties and taxes. Misclassification can result in CBSA issuing adjustments, penalties, or even seizures.

Common misclassification issues:

• Using a lower-duty HS Code to reduce import costs
  
  
• Failing to update HS Codes when regulations change
  
  
• Declaring an incorrect product category
  
  

Penalties:

• Fines up to $25,000 per misclassified shipment
  
  
• Requirement to pay backdated duties and taxes with interest
  
  

How to avoid it:

• Work with a customs expert like LCS to verify HS Codes before shipment.
  
  
• Stay updated on tariff classification changes.
  
  
• Keep records of past import classifications to ensure consistency.
  
  

4. Undervaluation of Goods

Some businesses intentionally or unintentionally declare a lower value for their imports to reduce duties and taxes. However, CBSA actively audits shipments to catch undervalued declarations.

Penalties for undervaluation:

• Fines up to 50% of the unpaid duties and taxes
  
  
• Additional interest charges on unpaid amounts
  
  
• Risk of shipment seizure or increased scrutiny on future imports
  
  

How to avoid it:

• Ensure the invoice accurately reflects the transaction value.
  
  
• Include all costs, such as freight and insurance, in your declaration.
  
  
• Keep records of supplier invoices and contracts to support declared values.
  
  

5. Failure to Pay Duties and Taxes on Time

Importers are required to pay duties and taxes within prescribed deadlines. Late payments result in interest charges and potential penalties.

Penalties for late payments:

• 5% penalty on unpaid duties
  
  
• Daily interest charges on outstanding amounts
  
  
• Potential suspension of import privileges
  
  

How to avoid it:

• Set up an automated payment system to ensure on-time payments.
  
  
• Work with LCS to calculate and prepay duties before your shipment arrives.
  
  
• Consider a customs bond to cover duty payments in advance.
  
  

6. Importing Prohibited or Restricted Goods Without Proper Permits

Certain goods require import permits, licences, or special approvals. Failure to secure these before shipping can result in seizures and penalties.

Examples of restricted items:

• Food and agricultural products (require CFIA approvals)
  
  
• Pharmaceuticals and medical devices
  
  
• Electronics and telecommunications equipment
  
  

Penalties for non-compliance:

• Confiscation of goods
  
  
• Fines starting from $500 per violation
  
  
• Legal action for serious violations
  
  

How to avoid it:

• Check CBSA regulations before importing restricted products.
  
  
• Obtain all necessary permits and approvals in advance.
  
  
• Let LCS handle pre-clearance checks to ensure compliance.
  
  

7. Non-Compliance with Labelling and Packaging Requirements

Canada has strict labelling and packaging rules, especially for consumer goods, food, and electronics. Improper labels can lead to shipment holds and fines.

Common issues:

• Missing bilingual (English & French) labels
  
  
• Incorrect safety markings on electronics
  
  
• Non-compliant ingredient lists for food products
  
  

Penalties for incorrect labelling:

• Product detention until relabelling is completed
  
  
• Fines starting at $1,000 per violation
  
  
• Potential recalls for serious non-compliance
  
  

How to avoid it:

• Verify Canadian packaging regulations before shipping.
  
  
• Work with suppliers to ensure labels meet CBSA standards.
  
  
• Consult LCS for a compliance check before import.
  
  

Work with LCS to Stay Compliant and Avoid CBSA Fines

Navigating Canadian customs regulations doesn’t have to be stressful. Logistics and Customs Services (LCS) provides expert customs brokerage solutions to ensure your imports meet CBSA requirements, avoid fines, and clear without delay.

Why Choose LCS?

• Customs Compliance Experts → We help you avoid costly mistakes.
  
  
• Accurate HS Code Classification → No more misclassification fines.
  
  
• Duty & Tax Optimisation → Reduce costs without violating CBSA rules.
  
  
• Import Permit Assistance → Get the right permits before shipping.
  
  

📞 Contact LCS today to ensure your imports are compliant and avoid unnecessary CBSA fines.