CARM: Release schedule, features and benefits
From the Canada Border Services Agency
The Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) project is a multi-year digital initiative that will change how we collect duties and taxes for goods imported into Canada. Through CARM, the CBSA will modernize and streamline the process of importing commercial goods.
On this page
- Release 1: Launch
- Release 2: Additional features
- Changes to the release prior to payment program
- A new way to account for imported goods
- New harmonized billing cycles
- Questions and answers
- Related link
Once fully implemented, CARM will simplify the overall importing process by:
- providing a modern interface for importing into Canada
- giving importers self-service access to their information
- improving consistency of compliance with trade rules
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 the trade community importing goods into Canada to complete the following tasks:
- view transactions posted to your 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 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: May, 2024
Release 2 soft launch is planned for October 2023 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.
In May 2024, CARM will become the official system of record for the collection of duties and taxes, which will introduce:
- changes to the Release Prior to Payment (RPP) program
- electronic commercial accounting declarations that you can correct and adjust
- harmonized billing cycles
- new offsetting options
- electronic management of appeals and compliance actions
- the ability to register for a Business Number (BN9)
- enrolment in various CBSA commercial programs
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, acquiring the privileges of the program 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:
- Option 1: a financial security instrument for 50% of their highest monthly accounts receivable (inclusive of GST) with a minimum financial security of $25,000 per import program (RM)
- Option 2: cash deposit for 100% of their highest monthly accounts receivable (inclusive of GST)
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:
- calculate their security
- post a bond
- make a cash deposit
Legislative changes to support a transition period
Proposed regulations, scheduled to come into effect in May 2024, were published in the Canada Gazette Part 1 and will support the coming-info-force of CARM. These legislative changes will allow for a transition period, which will give importers and their service providers time to adapt to the new 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 who onboard to CARM before the new Release Prior to Payment requirements take effect in May 2024. To benefit from the transition period, importers must register to the client portal ahead of CARM becoming the official system of record in May 2024. Importers will be required to register before a deadline to be determined and communicated later. An importer who registers on the CARM Client Portal after said deadline, will not benefit from the transition period, even if registration was ahead of CARM becoming the official system of record. Once CARM becomes the official system of record, importers will have 180 calendar days to make their own financial security arrangements.
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 privileges will be able to post their own financial security in order to participate.
If an importer wishes to enrol in RPP prior to the May 2024 go-live date, under the Importer Direct Security option, they may do so via the existing manual processes. A cut-off date for accepting new applications will be communicated at a later date.
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 bond 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 bond 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 guarantor providers. The CBSA will be providing additional guidance on all entities that will be approved to issue financial security agreements for the purpose of securing debt 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 $25,000 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 bond 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 $25,000.
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 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.
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 importers that have already registered their business in the CARM Client Portal (CCP). 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 May 2024 will be required to enrol in RPP through the CARM portal and 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 the importer remains non-compliant, CBSA may undertake compliance activities, which may result in a suspension or revocation from the RPP program.
If an importer registers in the CARM Client portal after CARM becomes the official system of record for the collection of duties and taxes, which means during the 180 days transition period, will that importer be eligible for the remaining balance of the transition period?
No, an importer that enrols in the RPP program, while the transition period is already in effect, will have to comply with the CARM requirements from day 1 of when CARM becomes the official system of record in May 2024. If the importer wishes to benefit from RPP after registering in the CARM Client Portal, they will have to enrol in the program and post the type of financial security selected (that is, security deposit or financial security agreement).
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?
The RPP annual review period will remain the same as it is today. However, it will be run automatically by the CARM system on October 15th of each year. CARM will perform a recalculation of the financial security requirement based on the last 12 months of historical accounts receivable. If applicable, the importer will receive a notification to update their financial security amount.
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. Clients 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:
- High value shipments (HVS) / low value shipments (LVS)
- Courier low value shipments (CLVS)
- Continuous transmission commodities (CTC)
- Customs self-assessment (CSA) program
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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