The Canada Border Services Agency (CBSA) issued its bi-annual update to its trade verification priorities this week. These priorities provide notice to Canadian importers of the goods and customs programs which will be targeted by CBSA’s compliance crosshairs throughout the remainder of 2025.
Several goods remain subject to the CBSA’s 2025 trade verification priorities for their 2nd, 3rd and 4th round. While the verification priorities under tariff classification and origin announced in January remain static, the CBSA has not specified any goods for valuation verifications, removing apparel (goods classified under Chapters 61 and 62 of the Customs Tariff), which was previously listed as a verification priority in January 2025 for its 4th round.
The CBSA has continued to list compliance verification priorities, which were first introduced in 2024. Notably, compliance with Canada’s March and April 2025 surtax orders, implementing a 25% tariff on certain US origin goods (Surtax) are listed as a compliance priority, putting importers on notice that goods may be assessed on the basis of tariff classification (i.e. confirming whether a good is properly classified under an tariff item not subject to the Surtax) or origin (i.e. confirming whether a good is US origin pursuant to the CUSMA Marking Regulations) to determine whether goods are subject to the Surtax on certain US origin goods.
Importers should assume that this compliance priority includes verification of the proper use of special authorization codes to self-assess remission of the Surtax, as specified under Customs Notices 25-17 and 25-19, and/or the application of Chapter 99 tariff codes, as specified under Customs Notices 25-10, 25-11, and 25-15. Importers should ensure they maintain proper records to support the use of special authorization codes and Chapter 99 tariff codes, which may fall outside of other statutory record keeping requirements. For example, maintaining records that specifies the purchaser and/or end-use of the imported goods.
CBSA July 2025 trade verification priorities (Classification, Origin, Valuation)
Tariff Classification
- Gloves (round 3) – Headings 39.26 and 42.03
- Bags (Round 3) – Headings 42.02
- Spent fowl (Round 3) – Heading 02.07, 16.01, 16.02
- Freezers and other freezing equipment (Round 1) – Heading 84.50 and 84.51
- Washers and dryers (Round 1) – Headings 84.50, 84.51
- LED lamps (Round 2) – Heading 85.39
- Furniture for non-domestic purposes (Round 4) – Headings 94.01 and 94.03
- Bicycle parts (Round 3) – Heading 87.14
Origin
- Bedding and drapery (Round 3) – Headings 63.01, 63.02, 63.03
Valuation
No priorities listed for July 2025 onwards.
CBSA July 2025 compliance priorities
| Priority | Reasons & Importer Risk |
| Classification of frozen desserts containing 5% of dairy products. | Dairy products are supply-managed in Canada and are subject to import controls. Importing misclassified goods containing dairy products without a quota allocation and an import permit, may result in an “over-access commitment” tariff classification, which is subject to high duties (e.g. up to 300%). |
| GST verifications concerning exemption codes and vaping products (subject to excise duties) | The CBSA seeks to verify compliance with GST exemption codes, ensuring that importers are not underpaying taxes by relying on exemption codes for ineligible goods. The CBSA collects GST (Canada’s 5% VAT) on imported goods and remits these amounts to the Canada Revenue Agency. Importers are obligated to record GST rates or the applicable exemption code in Field No. 29 of a Canada Customs Form B3 (soon to be the “Commercial Accounting Document” under the new CARM Portal). The applicable GST exemption codes are listed in CBSA policy for certain goods as prescribed under the Excise Tax Act. The CBSA is also conducting verifications of vaping products, which are subject to both excise duties and taxes. Increases to the existing excise tax on vaping products, announced in the 2024 Federal Budget, took effect on July 1, 2024. Scrutiny of GST exemption codes and excise taxes may result in duty and tax liability for importers. |
| Import origin verifications under the Canada-European Union Comprehensive Economic and Trade Agreement and the Canada-United Kingdom Trade Continuity Agreement | The CBSA has proposed origin-related verifications in relation to goods relying on preferential tariff treatment under the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) and the Canada-United Kingdom Trade Continuity Agreement. Importers relying on preferential tariff treatments available under Canada’s FTAs must ensure that the goods at issue meet the rules of origin under the applicable FTA. Importers of commercial goods are also required to furnish certificates of origin to the CBSA to support an origin declaration. Importers who fail to properly assess the origin of imported goods, or do not have the requisite supporting documentation, risk the CBSA withdrawing preferential tariff treatment and re-determining duties and taxes owing in respect of the non-originating goods at a higher duty rate. For example, goods that are determined to be non-originating under the CETA will be subject to most-favoured nation (MFN) tariff treatment. |
| Verifications of licensees importing supply managed goods in reliance on the Duties Relief Program | The CBSA will be conducting verifications of licensees importing supply-managed goods under the Duties Relief Program (DRP), which relieves payment of duties at the time of import for goods that will be exported either in the same condition or after being consumed, expended or used in the processing of other goods. This compliance priority, coupled with the proposed verification of tariff classification of frozen desserts, signals a renewed enforcement effort by the CBSA to prevent spillage (e.g. DRP-imported goods entering Canadian dairy, poultry, and egg markets instead of being re-exported) within Canada’s tightly controlled supply management regime. This renewed enforcement comes at a time when Canada has expanded access to the Canadian dairy, poultry and egg markets through concessions to member states in FTAs (e.g. the USMCA and the CPTPP). |
| China Surtax Order (2024): Electric Vehicles and China Surtax Order (2024): Steel and Aluminum | The CBSA is assessing compliance by importers with surtaxes implemented against certain Chinese origin goods. 100% surtaxes have applied to Chinese origin electric vehicles since October 1, 2024. See the list here. 25% surtaxes have applied to certain steel and aluminium products since October 15, 2024. See list here. |
| United States Surtax Order (2025-01), United States Surtax Order (Steel and Aluminum 2025), and United States Surtax Order (Motor Vehicles 2025) | The CBSA is assessing compliance by importers with the surtaxes implemented against certain US origin goods. A 25% surtax has applied to certain US origin goods as follows: March 4 – see list of goods here.March 13 – see list of goods here. April 9 – see list of goods here. Some US origin goods are subject to exemptions and duty remission processes. While not explicitly outlined as part of the CBSA’s compliance priorities, importers should assume the scope of the CBSA’s verification will cover same, given that the applicable Customs Notices reference use of examinations and verifications as an enforcement mechanism (see Customs Notices 25-10, 25-11, and 25-15 re: Surtax, and Customs Notices 25-17 and 25-19 re: exemptions). |
Result of a non-compliance identified during a verification
If a CBSA verification uncovers compliance deficiencies, the CBSA has authority to re-determine the origin, tariff classification, value for duty or marking of an imported good at any time within four years of the time of accounting and release of imported goods. The CBSA also has authority to assess the application of the Surtax, should an importer apply the improper classification or origin analysis, or improperly rely on a remission process or use of a Chapter 99 tariff code.
A re-determination will result in the CBSA issuing a Statement of Adjustment for unpaid duties, taxes, and interest, and where applicable – the Surtax. The CBSA also has authority to issue administrative monetary penalties (AMP) by way of a Notice of Penalty Assessment. The CBSA’s Master Penalty Document provides further information on the CBSA’s tiered penalty structure where the amount owed by an importer correlates to whether an offence is reoccurring.
Unlike the voluntary disclosure programs in other customs jurisdictions, once the CBSA has issued a notification letter initiating a trade compliance verification, an importer can no longer avail themselves of the CBSA’s voluntary disclosure program (where the CBSA has authority to waive penalties and interest at the specified rate). If non-compliance is uncovered throughout the course of a verification, an importer may be subject to AMPs and interest at the higher (specified) rate.
