CARM: Release schedule, features and benefits

No, up until October 2024, is it not possible to enrol in the Release Prior to Payment (RPP) program or to review an importer's financial security status via the CARM Client Portal. It is as of October 2024 that importers who wish to obtain RPP for goods they import will be able to post their own financial security in order to participate.

If an importer wishes to enrol in RPP prior to the October 2024 go-live date, under the Importer Direct Security option, they may do so via the existing manual processes.

In October 2024, importers must meet their financial security requirements by posting a financial security agreement (FSA) or a security deposit in the CARM client portal, FSA paper format will no longer be accepted. Other forms of financial security (beyond security deposit and Financial Security Agreement) that are currently in use may still be available in exceptional circumstances when CARM becomes the official system of record.

Important: Importers can no longer use a Broker's Security as of October 2024, they must use their own.

Financial security agreements are financial security instruments which importers obtain from an approved guarantor provider (surety companies and/or financial institutions). The process for posting financial security agreements is enabled by an Application Programming Interface (API) connection where the financial security provider transmits the financial security agreement information to CBSA on behalf of the importer, or by the importer entering their financial security information on the CARM Client Portal (CCP). If the importer posts the security agreement directly on the CCP, the CARM system pushes the information entered by the importer to the financial security provider for validation via the CCP.

When choosing a financial security agreement.

There are multiple types of financial security agreements that can be issued by different security providers. The CBSA will be providing additional guidance on all entities that are approved to issue financial security agreements for the purpose of securing amounts for the RPP program.

The formula for calculating the amount of financial security agreement is as follows:

• Equal to or greater than 50% of the importer's highest monthly accounts receivable (inclusive of duties and taxes) within the last 12 months of historical payments to the CBSA at the time of enrolment.
• A minimum amount of $5,000 is required per RM importer program account. An importer may choose to post the minimum amount however they must keep their accounts within their security limits by making interim payments or increasing the amount of security posted.
• The maximum amount of security will be capped at $10 million for each RM importer program account number. However, an importer may chose to post a higher security amount if their account receivable exceeds the cap, but it is not mandatory.

An importer may choose to obtain a single financial security for multiple importer program accounts associated to a business (BN9) however they will need to identify the security breakdown for each importer RM number, while meeting the minimum threshold of $5,000.

Security deposits are submitted by the importer through a payment made directly in the CARM Client Portal. The importer creates a security deposit "shell" for the amount of financial security they want to lock, and then allocate a payment toward the security deposit “shell” to activate it. Payments can be directly submitted to the CARM Client Portal, or by using an accepted form of payment in accordance with the Memorandum D17-5-1, where the credit would appear on the CARM Client Portal account for the importer to allocate to the "shell" to activate their security.

Importers can start posting security deposits once CARM becomes the official system of record in May 2024. They can submit the security deposit at any time during the 180 days transition period, but they must post it before the end of the 180 days period to avoid non-compliance after the transition period.

The formula for calculating the amount required for the security deposit is as follows:

• Equal to or greater than 100% of the importer's highest monthly accounts receivable (inclusive of duties and taxes) within the prescribed period.
• There is no minimum amount requirement when posting a security deposit.
• An importer may choose to make a single deposit for multiple importer program accounts associated to a business (BN9) however they will need to identify the security breakdown for each importer program.

Existing financial security agreements will be transferred to CARM by the CBSA. When the amount is not enough to meet the new CARM requirement, the importers will have the option to post additional security. System nudges will activate when the balance due is equal or higher than 75% of the total expected security coverage.

When CARM becomes the official system of record, the CBSA will automatically enrol all importers with a CARM Client Portal (CCP) account or a history of importing commercial goods into Canada within the past four years and an account in good standing. Importers will not be required to enrol at this time, they only need to post their required financial security prior to the end of the 180 days transition period.

Importers not registered in the CCP by October 2024 will be required to enrol in RPP through the CARM portal. These new importers will also be able to benefit from the transition period, but will be required to request participation via the CARM Client Support Helpdesk in order to do so. New importers who have not submitted a request to participate in the transition period must provide their financial security at time of enrolment.

If financial security is not provided within the 180 days transition period, the trade chain partner will be removed from the RPP program (at day 181).

The CARM system will automatically calculate the financial security requirement an importer must post, based on the last 12 months of historical payments to the CBSA at the time of enrolment. An importer that posts the system calculated amount will be automatically accepted. However, if the importer submits a security amount that is lower than what is recommended by the system, a case would be generated for officer review. It would be at that time that the importer would provide clarification for the posting of a lower amount (i.e. lower account receivable expected going forward). Upon officer approval, the amount would be accepted, and system monitoring would begin.

In the CARM Client Portal, the importer will land automatically on their Financial Security Dashboard. They will then know the amount of financial security they have to post by looking at the Security Requirement field.

Yes. Financial Security Agreements can be continuous or for a set duration. Continuous agreements do not expire; however, they are monitored to ensure they sufficiently cover the security required. Financial Security Agreements for a specific duration are only considered active for the timeframe for which they are underwritten and are considered inactive after the end date of the agreement.

The CARM system uses a nudging framework to encourage real-time compliance of financial security requirements. The nudging framework is used for RPP importers only. When an RPP importer's financial security utilization is approaching (for example, greater than 75%) or over capacity (greater than 100%), the CARM system will nudge the importer to either increase the financial security posted or post payment to reduce the account balance.

New importers who wish to benefit from the transition period after registering in the CARM Client Portal, may do so by enrolling in the Release Prior to Payment (RPP) program (via the CCP) and then selecting “lower than recommended amount”. This will generate a case for CBSA to review and apply the RPP indicator.

Yes, the RPP review period is changing. After October 2024, the CBSA will conduct an annual review of the financial security requirement for each importer’s RM business account. The review period will be comprised of July 25 of a given year to July 24 of the following year. The updated requirement will establish the new minimum financial security to be provided to the CBSA. The newly calculated requirement will be communicated to the importers by way of notification on the CCP in July/August and will be effective on October 15th, date by which the importers are required to be compliant.

The Financial Security Dashboard will allow importers to view and manage their program security requirements. The Financial Security Dashboard provides an overview of the importers total security required and current security coverage. The dashboard lists financial security by program (RM).

The RPP utilization compares the real-time account balance against the security posted for importation activities.