CBSA Criminal Investigations Are Not Customs Audits

CBSA Charged a Vancouver Resident With 21 Firearms and Drug Offences

On August 28, 2024, CBSA criminal investigators executed a search warrant at a residence in Vancouver, assisted by the Vancouver Police Emergency Response Team. The result: six firearms including two 3D-printed Glock-type pistols, two 3D-printed Glock-type frames, a semi-automatic rifle, one modified air pistol, a firearm suppressor, one over-capacity rifle cartridge magazine, multiple replica firearms, drugs, and drug paraphernalia. Dylan James Kennedy was charged with 21 offences.

Most importers only ever see CBSA as the agency that releases commercial cargo, issues AMPS penalties, or opens CUSMA verifications. The criminal investigation side exists in a different lane. CBSA officers hold peace officer status under the Customs Act and Criminal Code. They can arrest, search, and lay charges. They work alongside the RCMP, provincial police, and municipal forces. The Vancouver case is routine for that side of the house.

Where Criminal Investigation Overlaps With Commercial Import

The split matters because the procedural protections that apply to AMPS or a D-memo interpretation dispute do not apply when CBSA opens a criminal file. If your company imports controlled goods—firearms, precursors, dual-use technology, CITES-listed specimens—and something goes sideways, you are not in Administrative Monetary Penalty territory anymore. You are in arrest-warrant territory.

CBSA’s criminal investigation mandate covers:

• Smuggling and prohibited goods (firearms, drugs, child exploitation material)
• Tariff evasion and fraud (false origin claims, undervaluation, misclassification when intent is provable)
• Money laundering tied to cross-border movement
• SIMA circumvention when it rises to the level of fraud

The threshold is intent. A misclassified tariff line that costs you $12,000 in unpaid duty and triggers an AMPS B01 penalty is an administrative problem. The same misclassification, repeated across two years of CADs with fabricated supplier invoices and a second set of books, is a fraud referral. CBSA’s Customs Fraud and National Security Section handles the latter. They do not call ahead. They show up with a warrant and the local police ERT.

What CBSA Criminal Investigators Can Do

Under section 99.1 of the Customs Act, CBSA officers designated as customs inspectors hold peace officer authority. Under sections 163.4 and 163.5, they can:

• Apply for and execute search warrants at residences, warehouses, and commercial premises
• Arrest without warrant if they have reasonable grounds to believe an offence has been committed
• Seize goods, records, and devices

The Vancouver case used all three. The investigation began elsewhere—CBSA does not say how—and ended with a coordinated entry at the residence. The firearms were seized as exhibits. The criminal charges were laid under the Criminal Code and Customs Act.

If you run customs compliance for an importer, the risk is not that CBSA will kick in your office door over a late CUSMA certificate. The risk is that a pattern of non-compliance—false declarations, ghost suppliers, forged origin documents—will migrate from your broker’s audit file to the criminal investigation unit’s desk. Once that happens, you lose the ability to correct through voluntary disclosure or a penalty mitigation letter. You are responding to counsel, not a trade consultant.

Prohibited Goods and Importer Liability

The Vancouver seizure involved firearms and drugs. Neither category shows up in routine commercial import, but the enforcement principles do. CBSA maintains prohibited and controlled goods schedules under the Criminal Code, Controlled Drugs and Substances Act, Export and Import Permits Act, and Firearms Act. Importing any item on those schedules without the required permit or registration is an offence. The importer of record is liable, full stop.

We have seen this play out with:

• Over-capacity firearm magazines imported as “sporting goods accessories” (prohibited device, no permit)
• Chemical precursors misclassified as industrial cleaners (controlled substance, no ECCC or Health Canada authorization)
• Dual-use electronics shipped as consumer goods without the required ITAR or controlled goods program registration

In each case, the importer believed the tariff classification was the only risk. The actual risk was criminal liability for importing a prohibited good. CBSA’s examination officers flag these at the port. If the evidence suggests intent or a pattern, the file goes to criminal investigation. If it looks like an honest mistake, you get a seizure notice, a penalty, and a corrected CAD. The line between the two is thinner than most importers expect.

How This Affects NRI Programs and Broker Liability

Non-Resident Importers (NRIs) face elevated scrutiny because CBSA cannot pursue a foreign entity the same way it can pursue a Canadian corporation. If you operate as an NRI and your Canadian customs broker files CADs on your behalf, the broker is not liable for criminal fraud—but they are required to maintain records and provide them to CBSA on request. Under CARM, brokers must hold a signed Letter of Authorization and proof of the importer’s identity. If CBSA opens a criminal investigation and requests those records, the broker turns them over. There is no attorney-client privilege in a customs brokerage relationship.

The same applies to warehouse operators. If CBSA executes a search warrant at a sufferance warehouse—our Montreal facility has seen this twice in fifteen years—the warehouse must provide access and cooperate. The goods are seized as exhibits, and the importer is notified. The warehouse is not liable unless it participated in the fraud, but the disruption is immediate. Shipments in the same lot are frozen, and CBSA will examine every CAD filed by that importer for the prior 24 months.

Criminal Penalties vs. AMPS

AMPS penalties under the Customs Act max out in the low six figures for most infractions. A D-memo penalty for misclassification or an incorrect CUSMA claim might run $5,000 to $25,000, depending on the contravention and prior history. You pay it, correct the filings, and move on.

Criminal penalties under section 153 of the Customs Act (smuggling, false declarations, fraud) carry:

• Summary conviction: fine up to $50,000 or six months imprisonment, or both
• Indictment: fine up to $500,000 or five years imprisonment, or both

Section 159 (obstruction, failure to comply with an officer’s demand) adds another summary offence. Firearms and drugs bring Criminal Code charges with longer sentences. The Vancouver case lists 21 charges. Kennedy is not paying a penalty and walking away. He is facing trial.

How to Stay Out of the Criminal Lane

Most importers will never see CBSA criminal investigation. The ones who do usually took one of three paths:

1. Deliberate undervaluation with false invoices. Not a one-time mistake. A sustained scheme with two sets of books and fabricated supplier documents.
2. Prohibited goods with no permit. Firearms, precursors, CITES specimens, dual-use tech. The importer knew a permit was required and imported anyway, or misclassified the goods to avoid the permit process.
3. SIMA circumvention with intent. Transshipping subject goods through a third country and falsifying origin to dodge AD/CVD duties. CBSA and CITT have referred these cases to criminal investigation when the paper trail shows coordination.

If your import program does not involve any of those three, your risk is administrative, not criminal. If it does involve controlled or prohibited goods, you need legal review before the first shipment. A tariff classification tool will not tell you whether the item is prohibited. You need to cross-check the HS code against the Criminal Code schedules, the Controlled Goods Regulations, and the Export Control List. If you are not sure, that is a question for CBSA’s Border Information Service or trade counsel, not a guess on the CAD.

The Vancouver seizure is not a customs story. It is a criminal enforcement story that happened to involve goods that crossed the border. CBSA’s criminal investigation side handles maybe two dozen of these a year in the commercial import context. When they do, the importer is not negotiating a penalty mitigation letter. They are responding to criminal charges. If your import program sits anywhere near that line, you need to know which side of it you are on before the first CAD is filed. Get in touch.

Source: CSCB