Sunday, 13 March 2011

Part 3: The Courier Low Value Shipment Program

This is part of an ongoing series of posts starting here.

As most people know, any purchases shipped into Canada from abroad are subject to applicable taxes and duties as well as other possible fees from the government. If you were drive these purchases into the country yourself, you pay these fees at the time you make the border crossing. The goods cannot come in to the country before the fees are paid.

When you make an international purchase and ship it via UPS the customs process is, for all intents and purposes, invisible to you. I mean, you pay an exorbitant brokerage fee but at no point do you deal with the Canadian Border Services Agency (customs). That's because UPS will do that for you as your legal representative AFTER they deliver your goods and collect your money.

At this point, you may well be asking yourself "when did I ask for or allow UPS to act as my legal representative in this customs transaction?" You haven't given them permission and permission is required.

Here's how it works:

UPS participates in a CBSA program called LVS or The Courier Low Value Shipment Program.

As a participant in the program, UPS can move cargo inland from the point of entry without it being cleared by Canadian Border Services or paying anything up front. Basically, they can delay the customs clearing process by up to a month while still moving the uncleared cargo inland from the point of entry via bonded trucks and facilities. See point 16 of the LVS program.

By the time your shipment is on the last leg of its journey to you, UPS has already determined the taxes and duties owing and added their brokerage fee to come up with a COD total. This is the amount the UPS driver asks for when he arrives. If you pay them and sign for the shipment, the deal is done. They take payment and, up to 30 days later, act as your legal representative and clear customs on the cargo by paying the taxes and duties owed on your behalf. Barring some bizarre exception, you will never hear from Canada Border Services yourself. 

But wait, didn't I say they needed your written permission to act as your broker for the customs deal? Indeed I did. You give it to them when you sign for the shipment. Remember, at that point, the clearing process hasn't even happened yet.

If you're like me and always assumed that UPS was prepaying taxes and duties and recouping that cost from me, that will be a bit of a surprise to you.

Updated: A reader on pointed out that UPS drivers will not take cash so I have changed the line "They take the cash..." to "They take payment..." above.


This blog is not legal advice. It is a diary of my own experience and research. You cannot avoid paying legal duties and taxes on goods imported into Canada. This is not about avoiding taxes or duties. In fact, part of this process is paying them as required directly to a customs agent. This is about avoiding the UPS brokerage fee which is nothing more than a ridiculously large service charge paid directly to UPS for a service you neither asked for nor necessarily require.

1 comment:

  1. Even I took help of courier services Dallas last week. They were amazing, the gift I sent to me granny was intact and proper. There were no damages and also was quite affordable. This is a very interesting post, it updated a lot of information I had earlier about it.