How to Minimize the Risk of Border Detention Shipping Consumer Packaged Goods

As an importer of consumer packaged goods, unanticipated delays at the border will cost time and money and can greatly impact your business. The Canadian Border Services Agency (CBSA) has the authority to detain consumer packaged goods at the border which prevents the entry of the shipment into Canada. These delays can cause unnecessary frustration, lead to a supply chain nightmare, and can impact operations significantly. However, detained shipments are avoidable.

The most common reason for shipment hold-ups at the border pertains to documentation. Completeness and accuracy of paperwork is crucial. More importantly, it is important to understand what information CBSA requires when completing the forms. Here are some things that are frequently overlooked or misunderstood and can possibly result to importing delays.

Missing Paper Work

Examples of situations that will result to importing delays at the border – The freight company only has a Bill of Lading and is not given any other documents such as a commercial invoice or Canada Customs invoice. The document is not the correct document to obtain a Customs clearance (i.e. purchase order or pick ticket).

There are four main documents needed for importing into Canada: (a) Canada Customs Invoice, or a Commercial Invoice; (b) Bill of Lading; (c) Manifest or Cargo Control Document; and, (d) Shipper’s Import/Export Declaration. Depending on the CPG to be imported, additional licenses or permits may be required.

Check for any special requirements or extra documentation that may need to be taken to properly clear the goods across the border prior to ordering or shipping. A licensed Customs Broker would be able to properly advise on what is needed in order for your shipment(s) have a seamless Customs clearance process.

Insufficient Information

Documents are improperly completed and do not have sufficient information to prepare the entry for presentation and clearance with the CBSA. Information that can cause hold ups include:

business number
goods description
tariff classification
commodity value
country of manufacture or origin
total number of pieces; and,
weight.

Unclear Import of Record

Documents are hard to decipher who is the actual Importer of Record (IOR). The IOR can be the consignee or the receiver of the goods, the shipper, or an authorized third party. Importers and/or their authorized agents are responsible for the calculation and declaration of the value for duty of imported goods in accordance with the valuation provisions of the Customs Act.

Customs broker not identified

Engaging a customs broker is not mandatory but it is helpful when importing CPG. In the case that there is no customs broker, this should be clearly identified on the documents so that CBSA understands that you are preparing your own release and accounting documentation and transacting business directly with the CBSA.

The release of the shipment will require:

Paying any duties that may apply;
Obtaining, preparing and presenting or transmitting the necessary documents or data;
Maintaining records; and
Responding to any CBSA concerns after payment.

The benefit of having a customs breaker is that they will do all activities to obtain the release of the imported goods. The CBSA has a list of licensed customs broker within Canada which identifies locations each broker is licensed.

The Commodity Itself

A delayed shipment can also be due to the actual commodity being shipped. Before proceeding with importing, ensure the goods to be imported are permitted into Canada or whether the goods are subject to any permits, restrictions or regulation. For more information on prohibited products, Memoranda Series D9 provides more information on prohibited importations.

Some goods have Participating Government Agencies (PGA) involved in approving the goods for Customs clearance, such as items that are under control of Canadian Food Inspections Agency (CFIA). They require CFIA approval and some commodities are under quota and require an Import Permit. Certain goods are subject special import measures while some are covered by specific domestic controls.

Understanding the CPG being imported and the required paperwork are two main things that can reduce the risk of your shipment delays at the border.

In the world of compliance and quality management, audits are a fact of life. Auditing verifies adherence to standards or regulatory framework requirements. While audits have received negative stigma and are commonly dreaded, if performed properly and regularly, audits are useful tools to make sure that compliance is consistently and effectively implemented throughout all canna operations.

There are three main categories of audits depending on the relationship between the auditor and the auditee. First party audits, also known as internal audits, are performed by the company’s QA department. Second party audits are external audits performed on a supplier by a customer. Third-party audits involve an independent auditing company to assess whether the company is successful in meeting prescribed standards.

Canna facilities can greatly benefit from third party audits. Here are three reasons why.

Allows a fresh pair of eyes and provides objectivity

As two heads are better than one, two sets of eyes are more effective when reviewing and evaluating company compliance. Since internal QA staff ‘live and breathe’ the program everyday, it is helpful for an external party to verify the program. Third party auditors are able to come in and provide a completely neutral assessment and review of a company’s systems and processes without the natural familiarity that occurs over time with regular staff and day-to-day routines. The objectivity of a third-party audit provides a more accurate review of what is occurring within the company.
Supports internal QA Department

Audits conducted internally can be taxing on time and labor resources and take away from overall business function. A third-party auditor is able to enter a location for the sole purpose of conducting an audit and perform the audit and interviews in a timely and efficient manner without interrupting the efficiency of the company. The third-party auditor also reduces the pressure on internal QA resources when delivering s to senior management and colleagues that are not that favorable.
Creates a more robust Program

It is important to know which framework the audit will be performed, as this provides the context on the areas and processes that need to be verified. A federally licensed canna facility must be compliant with Good Production Practices (GPP), physical security requirements and other requirements defined in Health Canada’s Canna Regulations. Canna facilities that intend to export into Europe must also comply with EU GMP standards within the Eudralex framework.

Experienced third party auditors in these standards and framework have the benefit of having conducted audits in multiple environments and are able to share best practices that can strengthen individual programs. Industry-wide knowledge held by third party providers can serve to validate existing programs and provide recommendations for growth or change when deemed necessary.

A well prepared and well executed audit can make a substantial difference in improving operations and maintaining compliance. Thoroughly completed audits with proper follow through are viewed favorably by regulatory agencies and can strengthen a company’s Quality Management System.

How to Minimize the Risk of Border Detention Shipping Consumer Packaged Goods

Allows a fresh pair of eyes and provides objectivity

Supports internal QA Department

Creates a more robust Program

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