Canadian Customs Broker in the news..

You may have read an article about a Canadian Customs Broker being sentenced to jail after being convicted of evading more than $4.7 million in duties and taxes.

According to the CBSA - "What he did was submit accounting documents claiming a GST exemption code - so no GST was charged even though the goods did not qualify for the exemption," Giolti said. "In addition, rather than account for the goods in the correct currency such as. U. S. dollars, he would claim other currencies so the values would be less.
”However, when he billed the client, he would then bill the right amounts owing: GST and the right currency rate."

This may be unsettling for our customers and I thought I would address our process and systems should you have any questions. There are 2 main things we to do make sure we are compliant -

1) We have a very extensive compliance checking process where we have both the supervisors and managers of our various departments and branches check their people's work for compliance issues. We also have a compliance department that checks the supervisors and managers work for errors or omissions. We are very confident in our people's abilities to catch errors or omissions and a number of our customers have been audited with good outcomes such as this one.

2) We have what we call a "Duty Exception Report" which cross references our customs entries to confirm that what was paid out was billed out. If there is an exception - it goes on this report for our people to check into and fix. It also works in both directions. So, if we paid customs $100.00 in Duty, but we billed our customer $150.00 in Duty - it immediately goes on a report to fix. And, likewise, if we paid customs $150.00 in Duty, and billed our customer $100.00 in Duty - it goes on a report to fix.

I like to keep an open line of communication on this type of issue both for our customers and for our employees.

If you have any questions, please do not hesitate to contact me.

May 2008 Economic Digest - Importing and Exportin

May 2008 Edition

CONTROL

 
Next year in California, state regulators are likely to have the emergency power to control individual thermostats, sending temperatures up or down through a radio-controlled device that will be required in new or substantially modified houses and buildings to manage electricity shortages. The changes would allow utilities to adjust customers' preset temperatures when the price of electricity is soaring. Customers could override the utilities' suggested temperatures but in emergencies, the utilities could override customers' wishes.

GEOLOGY

Major Canadian mining companies are paying geology grads 44 per cent more than three years ago giving them higher salaries than the average MBA graduate in the U.S. Demand from developing nations including China has helped prices of gold, silver and copper more than double in that time. Canada is home to three of the world's largest gold producers and will graduate 1,200 new geologists this year to fill 9,000 positions in the country's mining industry. The average salary will be C$90,700. The average salary for a U.S. MBA is US$85,700.

WEALTH

Russia now has 101 billionaires, the most in the world after the U.S., which has 415. Germany is third with 60. Bountiful reserves of oil, gas and coal and soaring commodity prices have brought money pouring into the country.

ACCESS

Mobile phone coverage is now available along the entire climbing route of Mount Everest. Yaks and porters were used to transport the equipment for a transmission station 6,500 metres up the side of the mountain.

SIZE

Some of the new megayachts are so big that they have to dock in commercial ports. The growth in the number and size of yachts is also making it hard to find qualified crew members. It takes four years to build a yacht and prices are rising so quickly that some owners are selling their boats before they're even finished, for a tidy profit. There are 2,000 superyachts in the world today over 120 feet long. The longest, presently being built in Germany, will be over 530 feet when completed.

IMMIGRANTS

A record 429,649 foreigners came to live in Canada last year, many of them needed to address Canada's labour shortages. More than 251,000 permanent residency permits were issued and some 178,000 came on a temporary basis. More than 900,000 are still waiting for the immigration ministry to process their applications, some of whom have been waiting for up to six years.

ASTROTURFING

This is an umbrella term for any sort of fraudulent message masquerading as grass-roots word of mouth. It comes alongside a continued explosion in the world of viral marketing--self replicating techniques that use text messages, video clips, images and other means to encourage people to pass on a marketing message voluntarily and spontaneously. Viral marketing has grown 39 per cent in the last year alone, generating nearly $1-billion. Some 65-million American consumers shared their personal views on products with others online according to a recent study.

MAMMALS

Of all the mammal species that have become extinct in the past 200 years, nearly half are Australian. Since the country was colonized, 27 mammals, about 10 per cent of the total, have disappeared. Most Australian species are unique to the continent so when one vanishes, the loss is felt globally.

OIL

Britain was once the sixth-biggest producer of oil and gas but her share of the North Sea is now in decline. Production peaked in 1999 at 4.4-million barrels a day and has since fallen to 3-million and a target to maintain this level until 2010 looks certain to be missed. Presently, the industry supports 400,000 jobs and the oil and gas industry is now the biggest corporate contributors to the treasury, paying three-quarters of the US$26-billion paid in corporate taxes last year.

TECHNOLOGY

When the United Nations imposed a ban on trade in Liberia's logs in 2003, Liberia was synonymous with uncontrolled and environmentally devastating logging. Now a system has been set up to track all of Liberia's timber. Future lumber concessionaires will be required to attach a barcode to each tree they fell and to the stumps they come from. A corresponding entry in a database will record the origin, species, size and destination of each log. In theory this should make it much harder to forge paperwork and easy to catch those who misrepresent the amount of wood they have harvested.

EXPENSIVE

A recent survey by economists lists Oslo, London and Copenhagen as the three most costly cities in Europe and Dublin is now in fourth place. In Asia, Tokyo is the most expensive, followed by Seoul, Singapore and Hong Kong. By contrast, cities in the U.S. have become cheaper because of the weaker dollar.

VALUE

The share price of two shipping companies in Hong Kong have increased fivefold in the last two years. Meanwhile staggering sums have been made in private transactions. Ships generally fall in value as they age yet an iron-ore carrier built for $31-million in 2001 was sold for $150-million in 2007. It was immediately leased out on a long-term contract, making a vast profit for the buyer, even after that made by the seller. An oil tanker built for $142-million and still under construction was recently sold for $168-million.

INVENTIONS

Japanese scientists recently unveiled an invention, code named Smart Goggle, which not only records what the wearer of a pair of glasses is seeing, but recognizes it. The glasses can playback footage of when the wearer last saw an object, a remote or car keys for example. Initially, the user has to tell the glasses the name of everything that he or she looks at and the glasses will remember. They can then locate the last time the object was seen if it is misplaced.

COUPONS

Valpac, a company formed in 1967, invented the concept of its trademark blue coupon-stuffed envelopes sent to 45-million homes each month. Today it is an advertising giant that earned about $250-million in revenue last year. It has about 200 franchises across North America which expect to ship 20-billion coupons this year in 520-million envelopes from its massive $220-million facility in Florida.

BUTCHERS

A meat industry spokesperson in Britain recently claimed that high street butchers shops are closing at a rate of 23 a month. In 2000, there were 9,081 butchers in Britain but last year there were only 7,186 according to the tax authorities. The decline is largely caused by the dominance of the giant supermarkets.

CONCRETE

One of the most common building materials in the world today is concrete. However, it is one of the major sources of carbon dioxide (CO2) emissions which contribute to global warming. Between 5 and 10 per cent of global CO2 emissions are related to the manufacture and transportation of cement, a major ingredient in concrete. Manufacturers are experimenting with using organic waste materials as a substitute for some of the cement in concrete. These materials, such as fly-ash, produced when coal is burned, could replace up to 25 per cent of the cement in a mix.

SHOPPING

The Nielsen Co. reports that U.S. consumers are making fewer shopping trips across most retail outlets as they look for ways to combine errands and save money in an effort to battle rising gas prices and other economic pressures. While shopping frequency across most retail channels is flat or declining, supercentres continue to show growth.

TRAINS

Travellers are increasingly using trains to get around Europe. High-speed rail operators are ambitiously adding routes and cutting travel times to compete with the short-haul airline market. Spain, at the forefront of the boom, recently got high speed service between Madrid and Barcelona cutting the journey to two hours, 35 minutes, down from four hours. Switzerland has opened a 35-kilometre tunnel passing through the Alps cutting the travel time to Italy by over an hour. The travel time from London to Paris is now down to two hours, 15 minutes.

TRAVEL

The Commerce Department recently announced that America ran a US$17.8-billion travel surplus in 2007, more than double the 2006 figure. Arrivals from Canada were up 11 per cent; from Mexico, up 13 per cent. Visits from many west European countries, China and India also increased by double digits. The weak dollar and high oil prices also encouraged Americans to take their holidays near to home, providing a further boost for domestic tourism.

FAKES

Only three 1967 P4 Ferraris were ever built and now each is worth in the millions. Recently one turned up that proved to be a fake made in a garage in Thailand that was about to be shipped to Europe. It replicated the original in every visible detail and is an example of the genius of counterfeiting that is flourishing and is estimated to be worth $600- billion worldwide costing billions in lost revenues. Today, reverse engineering can take place at a keystroke as counterfeiters using 3D laser scanners and software develop a perfect copy in record time.

PETS

Among the affluent in China, keeping pets has become the rage, even though some Chinese still consume dog and cat meat. Spending on pet food and pet care In China will be worth US$870-million in 2008, up about 15 per cent from the $757-million spent in 2007. There were nearly 11-billion pets in China in 2007, the majority being birds, fish and reptiles. It is estimated that there are 150-million pet dogs and 11-million pet cats. Beijing has 120 restaurants that serve dog meat.

BRIDGES

China has revived a plan to build an 18-mile bridge linking Hong Kong, Macau and the mainland. Officials will seek private partners to help fund half of the US$6-billion costs. Private companies involved would see their investment returned in part through tolls. The bridge is the latest in a series of grand projects undertaken by Beijing as the economy booms.

DOOMSDAY

Plans are being made to erect a "doomsday arc" on the moon containing DNA, embryos and all the essentials of life and civilization, to be activated should Earth be devastated by a giant asteroid, a climate flip or nuclear holocaust. The information bank would provide survivors on earth with a remote-access toolkit to rebuild the human race. A basic version of the arc would contain hard discs holding DNA sequences and instructions for metal smelting and planting crops to be buried in a vault under the lunar surface. Transmitters would send the data to heavily protected receivers on Earth.

ROMANCE

It seemed romantic when the man in England had the florist put the $12,000 engagement ring in the helium balloon for him to give to his girlfriend. The plan backfired however when the wind caught the balloon and it sailed away never to be seen again.

Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.

Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp