The Importance of Customs Compliance in Canada Part 1 - Forced Labour and Non-Compliant Goods

In today’s fast-moving global trade environment, forwarders and customs brokers play a pivotal role in ensuring that goods move smoothly and efficiently across borders. With increasingly stringent regulations, including those targeting forced labour and Participating Government Agency (PGA)-regulated goods, compliance has become a key area of focus. Failure to comply can result in delayed shipments, fines, or reputational damage. This article explores the importance of customs compliance and how brokers and forwarders can navigate these complex challenges.

Forced Labour in the Supply Chain

Forced labour is a pressing issue globally, with over 27.6 million people affected by it (Public Safety Canada). Forwarders and customs brokers should be aware of the increased scrutiny on supply chains, particularly with the enactment of Bill S-211, which is in force as of January 2024. This legislation requires businesses to file annual reports detailing their efforts to combat forced labour and child labour in their supply chains (Public Safety Canada).

Impact on the Industry:

For customs brokers and forwarders, non-compliance with forced labour regulations can lead to severe penalties, including shipment detention, fines up to $250,000, and damage to client relationships. The growing emphasis on transparency means that even the smallest oversight can disrupt the supply chain and harm a company's reputation (Baker McKenzie).

Non-Compliant Goods and PGA-Regulated Goods:

Participating Government Agencies (PGAs) oversee specific goods imported into Canada. These agencies, such as the Canadian Food Inspection Agency (CFIA) or Health Canada, have distinct documentation requirements that importers must meet. Non-compliance with PGA regulations can result in delays at the border, fines, or even refusal of entry (Anderinger Blog).

How This Affects Brokers and Forwarders:

Customs brokers need to verify whether goods are regulated by one or more PGAs before importation, ensuring all required permits, documentation, and labeling standards are met. Failing to confirm compliance can result in shipment holds or monetary penalties. Forwarders must anticipate potential delays due to PGA inspections or document reviews. Proactively communicating with clients about specific PGA requirements—such as FDA regulations for food or EPA guidelines for hazardous materials—helps manage expectations and maintain efficient operations.  (Deringer)

How Brokers and Forwarders Can Help Navigate These Challenges

The role of customs brokers and forwarders is critical in mitigating the risks associated with both forced labour regulations and PGA compliance. Here are a few ways they can support their clients:

• Stay Updated on Legislation: Brokers must stay informed about new legislation, such as Bill S-211, and guide their clients on compliance strategies. This includes conducting supply chain risk assessments and advising on necessary documentation (Thomson Reuters).
• Ensure PGA Documentation is Complete: Forwarders and brokers should ensure that all necessary permits and documents are in order before goods arrive at the port of entry. Delays often occur when products are held for further inspection or if additional documents are required by the PGA (Anderinger Blog).
• Provide Supply Chain Transparency: By utilizing advanced tools such as AI-enabled supply-chain mapping, brokers can help their clients trace the origins of goods and ensure compliance with forced labour and PGA regulations. Offering real-time visibility into the supply chain can help companies mitigate risks and avoid costly delays (Thomson Reuters).

As regulations continue to evolve, forwarders and customs brokers must remain vigilant to ensure compliance with both forced labour laws and PGA requirements. Staying informed, preparing clients for potential delays, and providing expert advice will not only help businesses avoid fines but also build stronger, more transparent supply chains. At Portway International, we specialize in helping businesses stay ahead of complex customs regulations. Our team of experienced customs brokers is well-versed in the latest compliance laws, including forced labour and PGA requirements. We offer tailored solutions to ensure your shipments meet all necessary documentation and regulatory standards, helping you avoid delays and potential fines. Let us be your trusted partner in navigating the complexities of global trade.