Section 242: Procedure for penalties and administrative settlements

1 Where the Service has reasonable cause to believe that there has been a violation of section 250 of this Act and decides that further proceeding is required, it shall issue to the person concerned a written notice of its intention to claim for monetary penalty and such notice shall -
a describe the goods;
b set out the details of the entry or introduction, the attempted entry or introduction, or the aiding or procurement of the entry or introduction;
c specify all laws and regulations allegedly violated;
d disclose all material facts which establish the alleged violations;
e state whether the alleged violation occurred as a result of gross negligence, or negligence;
f state the estimated loss of duties, excise Customs duties, other Customs duties and fees, if any, and taking into account all the circumstances, the amount of the proposed monetary penalty; and
g inform such person of his right to make representation, both oral and written, as to why a claim for a monetary penalty should not be issued in the amount stated.

2 The provision of subsection (1) shall not apply where -
a the importation with respect to which the violation of section 250 of this act occurs is non-commercial in nature; or
b the de minimis rule is applicable to the amount of penalty claimed.

3 After considering representations, if any, made by the person concerned under the notice issued under subsection (1), the Service shall determine whether any violation of section 253 of this Act, as alleged in the notice, has occurred.

4 Where the Service determines that there was no violation, it shall promptly issue a written statement of the determination to the person to whom the notice was sent.

5 Where the Service determines that there was a violation, it shall issue a written penalty claim to such person, and such written penalty claim shall specify all changes in the information provided, if any, in the penalty notice.

6 A person shall be given a reasonable opportunity to make representations both oral and written, seeking remission or mitigation of the monetary penalty.

7 At the conclusion of any proceeding, the Service shall provide to the person concerned with a written statement which sets out the final determination and the findings of fact and conclusions of laws on which such determination is based.

8 The severity of any penalties applied in an administrative settlement of a customs offence shall depend upon the seriousness of the offence committed and the record of the person concerned in the dealings with the Service.