Administrative Monetary Penalty System
C168

Guidelines

Non-compliance occurs when a person was granted a refund under paragraph 74(1)(f) of the Customs Act and:

• The goods subsequently failed to comply with conditions imposed under a tariff item; and
• Refund has been paid under paragraph 74(1)(f) of the Act and the goods are subsequently sold or disposed of in a manner that would not entitle the importer to relief (i.e. revenue adjustment). For example, failure to maintain records or certificates of end use.

This penalty is also applied if a good is diverted from one conditional relief tariff item to another such that no additional duties are payable or refunded, but the diversion was not reported.

Applied against the importer.

Results from review or verification.

This contravention applies whether or not the refund received is repayable.

For errors discovered during a first audit, the first level penalty will apply.

For errors discovered during a second audit, the second level penalty will apply.

For errors discovered during a third or subsequent audits, the third level penalty will apply.

For situations where there is a repayable refund, see C169.

References

Legislation

Customs Act, paragraph 80.2(2)(a)

D-Memo

D6-2-3, Refund of Duties

Other

D11-6-5, Interest and Penalty Provisions – Determinations and Re-Determinations, Appraisals and Re-Appraisals, and Duty Relief