CSCB Report
What is Customs Self Assessment?
The government’s new Customs Self Assessment program (CSA) has been hovering on the horizon for some time. Now it looks like the program might actually be available this October, so importers need to ask some questions. What, exactly, is CSA? What are the benefits? Is it for me? And where does my customs broker fit in?
What is CSA?
According to a CCRA handout, CSA is a streamlined accounting and payment process for imported goods that “ends the need for importers to maintain separate and costly customs processes, allowing them to use their own business systems to fully self assess and meet their customs obligations.”
Sounds good, doesn’t it? Imagine, no more costly customs processes!
But wait a minute. CSA does not, of course, really eliminate customs accounting and payment processes at all. It just takes those processes and moves them somewhere else. Instead of maintaining a separate system to account for and report customs transactions to CCRA, CSA lets importers integrate customs accounting into their overall business accounting systems.
That might be a good thing to do, but it does not really eliminate anything. And in practice, getting set up for CSA might prove to be a very expensive proposition.
To qualify for CSA, importers have to develop and maintain highly integrated commercial business and accounting systems. They must be capable of generating complete, “cradle-to-grave” documentation of every trade transaction from the time an order is placed to the ultimate disposition of the order. They must be E-commerce ready, able to generate and exchange customs data with CCRA’s systems. And they must be open to comprehensive, business-wide customs audits — audits that are far more comprehensive and demanding than anything we know today.
The fact is, few — if any — importers have those kinds of systems in place. One large importer I talked to, who is already on the leading edge when it comes to integrated business systems, says it will cost more than $1 million to develop the kind of customs integration CSA requires.
What are the benefits of CSA?
CSA requires a sizable investment just to qualify. Will the return on that investment make it worthwhile? Possibly.
If an importer is simply looking for a way to reduce the costs of managing customs transactions, the answer is probably no. A business case for CSA, and the investment required, will not likely succeed based solely on potential cost-savings.
| “CSA may also be an attractive option if an importer is looking primarily for a faster, more reliable way to get goods cleared through customs. But here again, the issue is not straightforward.” | ||
However, a business case for CSA based on an importer’s broader, long-term corporate strategy might be a different story. For example, if the importer is already planning on developing advanced, automated business integration systems, or is pursuing the kind of E-commerce strategies and supply chain integration those systems make possible, CSA could well become an important option to consider.
CSA may also be an attractive option if an importer is looking primarily for a faster, more reliable way to get goods cleared through customs. But here again, the issue is not straightforward. CSA does, indeed, give importers the benefits of a streamlined clearance option — for some designated goods, and only if the goods are delivered by a CSA approved carrier and registered driver. Just being a CSA approved importer is not enough.
Is CSA for me?
Despite the hype you may have heard about CSA, there just is no easy answer to this question. Each importer has to evaluate the CSA option — the costs involved, and the potential benefits — by looking at how it might fit in with their specific business goals, technological capabilities, and long-term corporate strategy.
I believe that, in some cases, CSA provides importers with a valuable business option. But if you look at CSA in isolation — simply as an alternative way to handle customs transactions — you simply won’t have enough information to decide if CSA is right for you.
Where does my customs broker fit in with CSA?
The best way to answer this question is to talk to your customs broker — first, to decide if the CSA option is worth pursuing, and second, to learn how that option my be implemented in the most efficient way possible.
Keep in mind that “self assessment” does not mean “no assessment.” Everything that has to be done now to comply with customs requirements still has to be done under CSA.
If you decide that CSA is for you, then your broker can provide the best possible advice on getting the new accounting procedures up and running, whether that means developing new systems in-house, or outsourcing the IT capability required. For example, your broker may be able to provide the systems interface you will need to connect to CCRA, reducing the investment required to get started.
Once you have those systems in place, you will likely need to rethink the specific services your broker plays in the customs process. Instead of focusing solely on clearing goods through customs, you will need your broker to help manage the increasingly complex relationships between CCRA, your suppliers, and the carriers you use.
Fundamentally, your broker’s role stays the same whether or not you choose the CSA option. The broker’s job is to ensure the integrity and accuracy of the trade information as it flows in and out of your business — and to ensure that it flows efficiently, complying with all trade regulations and CCRA standards from start to finish.
CSA is coming, and it does bring a new set of options for importers. It’s a good idea to talk to your broker now, to see if those options are for you.