Vol. 149, No. 15 — July 29, 2015
SI/2015-70 July 29, 2015
FINANCIAL ADMINISTRATION ACT
Yosuke Kawasaki Remission Order
P.C. 2015-1087 July 16, 2015
His Excellency the Governor General in Council, considering that it is in the public interest to do so and that the collection of the amount of the penalty and relevant interest is unreasonable, on the recommendation of the Minister of Public Safety and Emergency Preparedness, pursuant to subsection 23(2) (see footnote a) of the Financial Administration Act (see footnote b), makes the annexed Yosuke Kawasaki Remission Order.
YOSUKE KAWASAKI REMISSION ORDER
1. Remission is granted to Yosuke Kawasaki of the amount of $100,013.96, paid or payable under paragraph 133(1)(c) of the Customs Act, representing the debt owed for the release of the goods seized on December 8, 2012 under section 110 of that Act and all relevant interest.
COMING INTO FORCE
2. This Order comes into force on August 4, 2015.
(This note is not part of the Order.)
Pursuant to subsection 23(2) of the Financial Administration Act (the Act), remit the amount of $100,013.96, paid or payable by Mr. Yosuke Kawasaki, pursuant to paragraph 133(1)(c) of the Customs Act, representing a portion of the debt owed for the release of goods seized on December 8, 2012, pursuant to section 110 of the Customs Act, and all relevant interest paid or payable on it.
The objective of the Order is to remit and forgive a portion of the amount paid or payable, including interest, to Mr. Kawasaki, as per subsection 23(2) of the Act. The Minister of Public Safety and Emergency Preparedness has deemed the amount paid by Mr. Kawasaki excessive and unreasonable, and is recommending the remission of a portion of that amount on that basis, as it would be in the public interest to do so.
On the evening of December 8, 2012, upon returning from New York City, Mr. Yosuke Kawasaki was questioned about his trip at the primary inspection booth of the Port of Lansdowne, Ontario. Mr. Kawasaki declared that he was away from Canada for a 9- to 10-day period and that the total value of the goods that he had purchased or acquired while abroad was $150. Mr. Kawasaki has been the concertmaster at the National Arts Centre in Ottawa since 2008, and is a world renowned violinist.
A violin and three bows were found in Mr. Kawasaki’s car as a result of a secondary inspection. As he did not report these imported goods at the time of entry into Canada, which was in contravention of section 12 of the Customs Act, they were seized.
The undeclared goods seized were assessed as having a value of $483,800 and included
- a Joannes Franciscus Pressenda of Turin, Italy, 1833, rare antique violin (the document provided identified the violin as being obtained in the United States [New York] and insured for $385,000);
- a Dominique Peccatte antique bow (insured for $90,000);
- a Ron Forrester bow (the original receipt was provided and showed a value of $6,800); and
- a S. J. Goh bow (a signed statement by Mr. Kawasaki confirmed a value of $2,000).
The seized goods were released and returned to Mr. Kawasaki on the basis of the lowest terms possible under the enforcement policy of the Canada Border Services Agency (CBSA). The CBSA Enforcement Manual part 5, chapter 2 establishes the terms of release for seized goods as 25% of the value of the goods, including the federal portion of the Harmonized Sale Tax (HST) [25% of $483,800 is $120,950]. Mr. Kawasaki was also assessed $38,704 on the importation of the goods for the provincial portion of the HST, for a total of $159,654. On December 11, 2012, Mr. Kawasaki paid a lump sum of $20,000 to obtain release of his goods, bringing down his amount owing to $139,654. The CBSA released the goods on the payment of the lump sum because of the nature of the goods and the lack of proper holding facilities available to ensure that the goods would not be damaged.
On January 15, 2013, Mr. Kawasaki requested a review (i.e. the CBSA’s administrative appeal process) by the Minister of Public Safety and Emergency Preparedness in accordance with section 129 of the Customs Act. The review was denied on December 4, 2013, on the grounds that there was a contravention of the Customs Act in respect of the goods. In the spring of 2014, Mr. Kawasaki applied to the CBSA for a remission order, which the CBSA declined to recommend to the Minister of Public Safety and Emergency Preparedness, because the Agency determined that Mr. Kawasaki did not meet the criteria for remission.
Mr. Kawasaki appealed to the Federal Court of Canada on December 23, 2013. On December 9, 2014, Mr. Kawasaki discontinued all his litigation, therefore exhausting all avenues for recourse. Mr. Kawasaki subsequently contacted Canada Revenue Agency (CRA) Collections to set up a payment schedule. He made a lump sum payment of $80,000 on April 15, 2015, leaving a balance owing of $62,783.01, including interest as of that date. He is currently proceeding to make regular monthly payments of $6,250 starting in April 2015, for 10 months, with an eleventh payment of an amount to be determined based on interest accrued.
Persons coming to Canada for the purpose of employment for a period exceeding 36 months are, on first arrival, considered to be settlers to Canada and are eligible for duty and tax free importation under the provisions of tariff item No. 9807.00.00. A form (B4, Personal Effects Accounting Document) must be completed to list all the personal effects being imported, as well as those that will follow at a later date, to be eligible for duty and tax free importation. When goods to follow arrive, they are released to the importer on presentation of the original form (B4) to the Border Services Officer. The Officer initials and dates the items being released on the settler’s copy of the B4. There is no time limit for importing goods to follow that were listed on the settler’s form B4. Goods that were not declared on the initial entry as “goods to follow” are subject to regular import assessments.
The CBSA has no record of a form B4 identifying Mr. Kawasaki’s accompanying settler’s effects as well as goods to follow. In representations made through the National Arts Centre, Mr. Kawasaki acknowledged that he should have declared the goods when he first settled in Canada in 2008, and during his subsequent border crossing, but argued that the penalty imposed was very severe compared to his error of not filling out the appropriate paperwork.
The Remission Order is a one-time proposal to relieve Mr. Kawasaki from a portion of his debt as a result of an enforcement action taken by the CBSA on December 8, 2012, which represents an unreasonable burden for the individual in question, given the high-value of the goods. The CBSA does not intend to implement any changes in the legislation or with respect to policy direction as a result of this Remission Order.
This is a one-time payment intended to alleviate a portion of Mr. Kawasaki’s debt as directed by the Minister of Public Safety and Emergency Preparedness. The payment will be made from the Consolidated Revenue Fund.
All costs identified herein stem from amounts originally imposed or collected at the border, including terms of release and applicable taxes.
As directed by the Minister, the remission seeks to address the unique characteristics of this case, taking into account the public interest related to Mr. Kawasaki’s contribution to Canada’s cultural life and his acknowledgement of his failure to comply with the requirements of the Customs Act, evidenced by his willingness to discontinue his legal actions against the Government of Canada.
The goods were valued at $483,800. The terms of release were 25% of the total value of the goods (i.e. $120,950, including $24,190, which represented the federal portion of the HST). In addition, Mr. Kawasaki was assessed $38,704 for the provincial portion of the HST on the importation of the goods, for a total debt of $159,654.
Mr. Kawasaki will be paying both the provincial and federal portions of the HST, for a total of $62,894. This is the amount he would have paid if he had declared the goods in December 2012. CRA Collections has provided a total tally of the debt and the interest up to August 4, 2015, and the total true amount being remitted by this Order, including calculation of all interest payable, is $100,013.96.
Corporate Affairs Branch
Canada Border Services Agency
191 Laurier Avenue West, 6th Floor