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CARM: Release schedule, features and benefits

CARM launch for trade chain partners rescheduled to October 2024.

Read this news release issued , for details.

The Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project is a multi-year digital initiative that will change how duties and taxes imposed or levied on goods imported into Canada are paid. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.

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Benefits

Once fully implemented, CARM will simplify the overall importing process by:

Release 1: Launch

Scheduled: May, 2021 – Completed

The CARM Client Portal (CCP) went live, as part of Release 1, on . The introduction of this new portal enables a person importing goods into Canada to complete the following tasks

  • view transactions posted to their accounts
  • make payments by credit card, online banking or set up pre-authorized debit
  • request and track the progress of rulings electronically
  • classify goods and estimate duties and taxes

The CARM Client Portal is available to importers and customs brokers, as well as trade consultants who currently submit rulings on behalf of importers. Users are able to delegate portal access to employees and third parties such as customs brokers and/or trade consultants, enabling them to seamlessly continue their work and provide their services.

Release 2: Additional features

Scheduled:

Release 2 soft launch took place in to allow selected industry partners to test their own internal systems and allow time for software service providers to continue to certify their software with CARM.

On , CARM will become the official system of record for the imposing or levying of duties and taxes, which will introduce:

Note: As of May 2024, registering for an importer or exporter account (RM) will only be available via the CARM Client Portal. The Canada Revenue Agency will no longer be providing this service.

Further enhancements are expected to become available in the Fall of 2024.

Changes to the Release Prior to Payment program

The Release Prior to Payment (RPP) program allows participants to obtain the release of goods from the CBSA before the final accounting and payment of duties and taxes.

When CARM becomes the official system of record, obtaining the release of imported goods prior to accounting and payment of duties will significantly change for importers. They will no longer be able to use their customs broker's RPP security to clear shipments before paying duties and taxes. Importers who want to participate in the RPP program will be required to post their own financial security. They will have the following options:

The current RPP program will remain in effect until May 2024, at which point the new requirements are expected to take effect. In anticipation of these changes, the CBSA has developed the following plan to help importers transition to the new requirements, which will include instructions on how to:

Legislative changes to support a transition period

Regulations, scheduled to come into effect in , have been published in the Canada Gazette Part II and will support the coming-into-force of CARM. These regulatory changes will allow for a transition period, which will give importers and their service providers time to adapt to the new security model and avoid border disruptions.

Transitioning to a new model for meeting financial security requirements

The Canada Border Services Agency (CBSA) has developed a transition plan to support importers when the new Release Prior to Payment requirements take effect in . All importers with a CARM Client Portal account or a history of importing commercial goods into Canada within the past four years and an account in good standing will automatically benefit from the transition period.

After , new importers who do not have a history of importing commercial goods into Canada within the past four years will also be able to benefit from the transition period. New importers wishing to benefit from the transition period will be required to request participation via the CARM Client Support Helpdesk.

Once CARM becomes the official system of record, importers will have 180 calendar days to make their own financial security arrangements. To avoid delays, all importers are encouraged to create their CARM Client Portal account now.

Questions and answers

Can an importer enrol in Release Prior to Payment program through the CARM Client Portal prior to May 2024?

No, up until May 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 May 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 go-live date, under the Importer Direct Security option, they may do so via the existing manual processes. is the cut-off date for accepting new applications.

What options are available in May 2024 to post a financial security?

In May 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 May 2024, they must use their own.

How will an importer post an electronic financial security agreement?

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.

How will security deposits work?

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 . 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.
How will the CBSA convert Legacy Security programs (Importer Direct Program)?

Existing Financial Security Agreements (custom bonds) 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.

Do importers have to enrol in RPP during the transition period?

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 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.

What happens if an importer fails to post financial security before the end of the transition period?

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).

Will CARM calculate the financial security requirement?

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 bond 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.

Can an importer use a one-time financial security agreement?

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.

How will financial Security be monitored, and when will the nudging begin?

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.

If a new importer registers in the CARM Client portal after CARM becomes the official system of record for the collection of duties and taxes, but during the 180 days transition period, will that importer be eligible for the remaining balance of the transition period?

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.

Will the RPP review period change (July to June: letters out in October)? If so, how will it work and when will the change/first review period take effect?

Yes, the RPP review period is changing. After , 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.

How will an importer be able to view their financial security in the CARM Client Portal?

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.

A new way to account for imported goods

A new commercial accounting declaration (CAD) will be introduced in May 2024. The CAD will serve as the digital document to account for imported goods into Canada, replacing the current customs coding (B3) and request for adjustment (B2) forms. Any corrections or adjustments made to a CAD will be recorded as a new version of the original declaration.

The CARM system will automatically calculate the duties and taxes based on the information provided by the client on the CAD. Trade chain partners will be able to submit, correct or adjust the CAD via the CARM Client Portal or electronic data interchange (EDI), or an application programming interface (API).

Clients can make corrections to the original CAD submission up to the payment due date, interest-free. Any changes client make to the CAD after the payment due date, otherwise known as adjustments, may be subject to CBSA review.

The CAD will not impact the release process. There will be slight changes for the C-type entry process, where the CAD form will replace the B3 form in the release package. A CAD will not be accepted from a customs broker without a proper delegation of authority.

New harmonized billing cycles

In May 2024, CARM will introduce new harmonized billing cycles that align payment due dates for importers. The following billing cycles will be affected by CARM:

The payment due date will be 10 weekdays (defined as Monday to Friday, inclusive of holidays) after the 17th of the calendar month.

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