The Canadian government following on the heels of the US government is finally implementing the much talked about ACI e-manifest program. While it is a tactical program which I tend to stay away from on this blog, there is a positive compliance angle that I did want to highlight. But first a short back grounder on ACI e-manifest.
October 31st was the roll out of the ACI Highway (eManifest) mandate by the Canada Border Service Agency (CBSA). ACI (Advanced Commercial Information) is Canada’s regulation requiring cross-border shippers and carriers to file electronic manifests for Canada-bound shipments one hour prior to their arrival at the Canadian border. This milestone begins the twelve month optional reporting period combined with six months of Informed Compliance. Once the optional reporting period is closed, the CBSA has indicated it will begin to impose Administrative Monetary Penalty System (AMPS) fines to those shipments that arrive at the border without a prior approved ACI filing. This week, Canadian Transportation and Logistics published an article interviewing Con-way Freight to find out what their experience has been as they were part of the CBSA’s pilot project. To read that interview click here
Alan Dewar, VP Canadian Operations, GHY International share this regarding the implementation of e-manifest in Canada:
eManifest ‘closes the loop’ of supply chain cooperation between CBSA and ‘importers/carriers/custom broker service providers’. Currently the business systems used by importers, carriers and customs brokers to communicate with CBSA rely heavily individual ‘checks and balances’. If any single party doesn’t open and close a file from pre-Arrival awareness to final accounting it is possible for trade reporting to slip through the cracks. Anything slipping through the cracks can attract Administrative Monetary Penalties at a later date when CBSA perform audit samplings.
As Mr. Dewar mentioned the compliance issue today is the AMPS penalty related to lack of verification (post audit) if a driver at the border has presented paperwork on your behalf but failed to get confirmation from CBSA. Especially an issue when you use LTL (less than truckload) freight where there are multiple shipments to a truck. According to Mr Dewar:
LTL (less than truckload) carriers particularly are embracing the benefits of eMfst. Previously document files would need to be scanned and logged individually by CBSA at time of border crossing. We’ve seen situations where a truck driver would fully present to CBSA but ‘documents would be stuck together or a scan would fail’. Administrative Penalties if undetected include a first infraction of $2,000, second infraction $4,000 and escalating from there. Imagine fully declaring to Customs at border crossing with 10 shipments where ’2 documents stuck together or failed at scan’ and incurring a fine of $6,000 ($2,000 + $4,000)? With eMfst any single shipment will automatically present the entire load to Customs for import release processing decisions. All supply chain partners are excited about the accountability and risk management benefits of eMfst.
In an ACI e-manifest world with the right provider you can have a definitive audit trail with each e-manifest that is filed. No replying on stamping and no concerns for files getting stuck together. There are some assumptions here such as the carrier must participate in the RNS (Release Notification System) to have visibility if the broker partner has filed the entry on behalf of the importer, while the carrier doesn’t have to wait for that filing in today’s world there is still ongoing discussion if the importer would be subject to a penalty on their shipment if both sides of the equation haven’t been filed in advance in order to allow CBSA proper review and targeting. We are keeping an eye on this issue and it’s compliance obligations to importers and exporters.
This again reinforces another reason why the Integrated Trade Compliance Strategy makes sense as the lines of communication and visibility as defined by the strategy would ensure that partners know who owns what and stay in communication and sync with regards to tactical issues like customs clearance and now ACI e-manifest.