Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Canada Border Services Agency Releases D-Memo on "Subsequent Proceeds"

On July 8, 2009, the Canada Border Services Agency (CBSA) released a D-Memorandum D-13-4-13 entitled "Post-Importation Payments or Fees "Subsequent Proceeds". To obtain a copy, please go to the following link -

This administrative statement sets out the CBSA's position on which payments made by an importer post-importation to the vendor or for the benefit of the vendor are considered to be "subsequent proceeds" and form part of the transaction value of the goods on which customs duties are payable, including, but not limited to:

  • payments based on resales in Canada after importation (e.g., importer shall pay vendor 25% of the proceeds)
  • management or administration fees
  • contributions to worldwide marketing and promotion
  • year end adjustments
  • research and development fees
  • fees for services rendered
  • interest on deferred payments
  • payments for disposal of the goods

Whether an amount payable by the importer is a subsequent proceed because subsequent proceeds must be added to the price paid or payable. Since the fees are paid post-importation, the importer has an obligation to amend its import information by filing a B2 amend and is obligated to pay any additional customs duties and goods and services tax (GST)/harmonized sales tax (HST) /Quebec sales tax (QST) that is owing.

Often importers fail to file the voluntary amendments and are assessed the customs duties, GST/HST/QST, interest, penalties and AMPs penalties. The failure can become quite costly.

D-Memo 13-4-14 does not discuss the 90 day time limit for making a voluntary amendment to a customs declaration. The amendment must be made within 90 days from the day the importer has a "reason to believe" that there are subsequent proceeds causing an increase to the price paid or payable. It is important for importers to implement internal processes so that the voluntary amendments are filed on time.

Now that D-memo 13-4-13 is in the public sphere, importers should expect that the CBSA will start enforcing its administrative policy.

If you require more information, please contact Cyndee Todgham Cherniak at 416-307-4168.

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