Many shipments enter Canada under conditions of sale that include freight from the place of direct shipment in the value of the imported goods (e.g. ‘CIF’, ‘C&F’, ‘DDP’, LDP’).

If the amount of deduction is known at time of entry, importers are obliged to deduct it. However, if importers are unable to substantiate the deduction by way of freight bills, the values will be adjusted upwards by CBSA in a compliance assessment review, and additional duty, interest, and possible penalties will result.

Importers are required by section 32.2 of the Customs Act to correct entries where a deduction has been made that cannot be substantiated. Failure to correct those values may result in AMPS penalties.

Failure to correct values on entries with adjustments where the adjustment is later shown to be different (for example, receiving copies of freight bills that differ from the deduction) may also result in AMPS penalties.