As international trade volumes have grown, so has the pressure on customs agencies to keep up with the flow while improving law enforcement. For that reason, the Canada Customs and Revenue Agency (CCRA) has developed a bold modernization plan that will allow it to target its resources better and speed up the flow of goods into and out of the country.

The two main thrusts of the agency's Customs Action Plan, 2000-2004 are to implement risk-based processes supported by technology and to develop a fair and effective sanctions regimen. Within that broad framework, the agency has developed initiatives that will affect both traders and travelers.

For traders, the plan offers many improvements that will be implemented over the next three years. These include:

• Re-engineering and stabilizing Canada Customs' ACROSS information system and the Customs Electronic Commerce Platform;
• Giving importers the ability to transmit data securely via the Internet;
• Developing a single electronic interface between CCRA and other Canadian government agencies to facilitate the transmission of release data by importers;
• Developing a "one-step" option that would allow importers and brokers to submit release and accounting data in a single transmission;
• Allowing the electronic submission of post-entry adjustment data;
• Introducing common export and import data sets approved by the G7 group of industrialized countries (the United States, Canada, France, Germany, the United Kingdom, Japan, and Italy);
• Implementing the Carrier Re-engineering program, which will improve risk assessment and management for carriers, service providers, and cargo; and
• Introducing the Customs Self-Assessment (CSA) program, under which eligible importers will obtain expedited release of low-risk shipments and will self-assess duties and taxes. Post-entry audits will evaluate compliance levels and determine whether penalties are necessary. Those penalties will be monetary rather than judicial in nature, as is now the case.

The plan, which was developed after consultation with many countries and organizations, represents a consensus in industry and government that pre-approval of entries is necessary in order to handle the growing volume of trade in Canada, said William A. Claypole, director, strategic international and domestic partnerships for CCRA, at the recent Transporte Internacional conference in Acapulco, Mexico. Improved risk assessment and a strong technological framework, he said, would be critical to achieving that objective.

There is widespread support for the plan in Canada, says Birgit Matthiesen of the Canadian Embassy's Economic and Trade Policy Division in Washington, D.C. "It's a real attempt at true risk management. It not only identifies who the 'bad guys' are, but it also identifies and rewards the 'good guys'—those with good compliance track records," she says. "It brings the customs process more in line with business realities and provides those who are CSA-eligible the option of providing less data at the time of release."

Although several initiatives have been funded and already are under way, other segments of the plan require enabling legislation. That legislation is likely to be introduced this summer.

Meanwhile, supporters say the plan holds great promise as a model for harmonizing customs procedures among the NAFTA countries. Matthiesen suggests that the U.S. and Canadian customs services could adopt a joint risk-management approach and develop a single list of low-risk importers and exporters, enabling them to ship north and southbound under the same compliance conditions and entry requirements.

In a presentation at Transporte Internacional, Bob Armstrong, president of the Canadian Importers and Exporters Association, noted that although CSA would not apply on shipments from Mexico, the overall modernization program could serve as a starting point for developing harmonized trilateral processes. "It's time," he said, "for NAFTA to move that next step forward and harmonize the data elements."