Undervaluation at the border - Making false statements can lead to hefty penalties
May 5, 2017 Ottawa, Ontario Canada Border Services Agency
Canada Border Services Agency (CBSA) officers at the Cornwall, Lansdowne, Prescott, Ottawa Macdonald-Cartier International Airport and Sault Ste. Marie ports of entry (POE) seized high-priced goods that were undervalued in 12 separate cases between March 21 and April 17, 2017. The seized goods include cars, trucks, boats, motorhomes, and a luxury handbag from travellers making false statements about their declaration. In all cases, the amount travellers paid for the penalty of making untruthful declarations exceeded the cost that would have been paid in duties and taxes.
Sault Ste. Marie
On March 22, 2017, a resident of Marathon, Ontario, arrived at the Sault Ste. Marie POE with a boat. He declared the value of the boat as Can$6,926. However, upon examination, officers discovered the boat was actually valued at Can$14,652.
The boat was seized and the individual was required to pay a penalty of Can$3,090 for its return, instead of Can$1,905 if he had made a truthful declaration.
On April 3, 2017, an Ottawa resident had his historic motorcycle seized at the Prescott POE. He had originally declared the value of the 1943 motorcycle at US$2,500. Upon further examination, officers discovered that a similar motorcycle was being sold for US$5,300 in the same U.S. region. During the interview, the traveller admitted he had paid US$4,800 and used a false invoice in order to avoid paying the taxes.
The motorcycle was seized and the individual was required to pay Can$1,685 for its return, instead of Can$320 if he had made a truthful declaration.
Lansdowne (Thousand Islands)
On April 7, 2017, a resident of Belleville, Ontario, was returning from an overnight trip to the U.S. and arrived at the Lansdowne POE with a 1933 classic car. He declared the value of the vehicle as Can$21,454. After further examination, officers located a posting online for the vehicle listed much higher. During an interview, the traveller admitted that he had traded a car valued at Can$50,000 for this vehicle. The officer advised the traveller that this would be the transaction value. The traveller admitted to undervaluing the vehicle to avoid paying more tax.
The vehicle was seized and the individual was required to pay a penalty of Can$15,700 for its return, instead of Can$2,500 if he had made a truthful declaration.
Ottawa Macdonald-Cartier International Airport
On April 7, 2017, an Ottawa resident arriving at Ottawa airport from Florida made a declaration of Can$670. The traveller was referred for a secondary examination. During the exam, officers discovered a new-looking luxury handbag concealed in another purse and a shopping bag with the brand of the store. Originally, the woman stated the handbag was purchased a year earlier; however, over the course of questioning, she admitted that the handbag was purchased during this last trip. Officers investigated further and discovered it was valued at Can$1,356.
The handbag was seized and the traveller had to pay a penalty of Can$542.40 for its return, instead of Can$176 if she had made a truthful declaration.
On April 11, 2017, a resident of Baie-Comeau, Quebec, was returning after spending the winter in Florida. The traveller declared a motorhome for US$1,000 and a new motor for the motorhome for an additional US$3,000 for a total of Can$5,338. During a secondary examination and interview, officers discovered that the true value of the motorhome and new motor was Can$33,367.
The items were seized and the individual was required to pay a penalty of Can$15,788 for the return of the items, instead of Can$1,668 if he had made a truthful declaration.
Lansdowne Additional Undervaluation Seizures
In addition to these examples, CBSA officers at the Lansdowne POE seized seven other items, including trucks, boats, as well as a car, trailer and motorhome. The total amount of all seven false declarations was Can$98,323. The actual total value of the items was Can$174,952. The total amount that was paid in penalties was Can$38,676 instead of Can$14,280, if the items had been properly declared.
“The CBSA reminds travellers to truthfully declare all purchases and goods received outside of Canada upon their return. Smuggling, undervaluation and other Customs Act offences may lead to seizure and/or prosecution in a court of law and/or penalties that usually exceed the amount of duties and taxes payable for accurate declarations.”
Jeff Davidson, Director, CBSA Northern Ontario Region, Enforcement and Intelligence Operations Division
All goods entering Canada must be accurately reported to the CBSA and may be subject to a more in-depth exam.
Officers look for indicators of deception and use a risk management approach in determining which goods may warrant a closer look.
If you do not declare goods, or if you falsely declare them, CBSA officers can seize them. This means that you may lose the goods permanently or may have to pay a penalty (ranging from 25% to 80% of the value of the seized items) to get them back.
The CBSA keeps a record of infractions. If you have an infraction record, you may have to undergo a more detailed examination on future trips. Other consequences may include ineligibility for the NEXUS and CANPASS programs.
Anyone with information about suspicious cross-border activity is encouraged to call the CBSA Border Watch toll-free line at 1-888-502-9060.
CBSA – Regional Communications
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