Canada - English

Recent U.S. Budget Cuts May Result in Cross-Border Shipping Delays - by John Pajek and Dan Vance 

Global Tax Adviser

 

March 12, 2013

 

John Pajek
Toronto, Trade and Customs

 

Dan Vance
Deputy Tax Business Unit Leader, Toronto

 

Business shipping across the Canada-U.S. border may experience delays due to new U.S. budget cuts. Due to reduced border staff, importers and exporters may see delays in container examinations. However, members of trusted trader programs should continue to see faster processing of shipments.

Background
At a recent press conference, the U.S. government confirmed that the budget cuts could affect U.S. Customs and Border Protection's (CBP) container examinations. Specifically, a representative said that officers would be sent on furlough (i.e., temporary leave) as a result of the budget cuts, which could have serious consequences to the flow of trade and travel at U.S. ports of entry.

 

Effect on cargo shipments
As a result of the cuts, it is expected that service levels in CBP's cargo operations will be affected. According to CBP, there will be increased and potentially escalating delays for container examinations of up to five days or more at major seaports. Importers and exporters may also experience significant daily delays for truck shipments at land border ports. CBP says it will continue to carry out border security operations consistent with all applicable legal requirements, including mandatory examinations of perishable commodities.

 

Trusted traveler and trader programs
The CBP confirmed that it will maintain all trusted traveler and trusted trader programs, including Global Entry, SENTRI, Nexus, and FAST. Generally, membership in these programs allows for faster processing and members will continue to receive these same benefits. However, increased demand for new trusted traveler applications may cause longer approval times.

 

For more information, contact your KPMG adviser.

 

 

 

 

Information is current to March 12, 2013. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

KPMG Publications

Canadian multinational companies may be interested in these recent publications: