In the future, importers and customs brokers in Canada can expect to take part in a brand-new importation experience. Gone will be the days of the CADEX program; in its place, the CBSA has been developing something entirely new.
CARM: the CBSA Assessment and Revenue Management program.
This multi-year initiative is intended to completely revamp the importation process. The CARM program is an online portal that will give Canadian importers and exporters 24/7 access to border services, streamlining the commercial shipping process. The program will allow users to: use online tools to classify goods, calculate duties and taxes, submit e-declarations, make e-payments and view up-to-date account information. It will be paperless by default. CARM will make it easier for businesses and customs brokers to work with the CBSA, will improve consistency in applying trade rules and decisions, and will reduce previous requirements in the process that were otherwise repetitive or redundant.
The primary purpose of CARM is to deliver a globally leading customs experience that is customer-centric, facilitates legitimate trades, improves compliance and revenue collections, and contributes to the securing of Canada’s borders. It is intended to replace the existing CADEX system, which means that all businesses importing into Canada will have to consider the CARM system. Originally, this change was intended to roll out over the next 24 months and would affect most, if not all businesses.
CBSA will continue to offer the Release Prior to Payment Program (RPP). However, changes are being made so that importers will have to secure their commercial imports directly.
Timelines:
Due to COVID-19, CARM has been postponed until further notice. We can expect that when CARM is ready to go forward, CBSA will follow this release timeline in stages. Below is the original timeline of how CBSA was to go forward with their release during 2020 and 2021. Since CARM has been postponed until further notice, previous timelines have been omitted.
Implementation Stage: During this time, testing and deployment were targeted to begin.
Release 0: The existing ARL (Accounts Receivable Ledger) system was to be transferred from its current data centre configuration to the SAP S4/HANA cloud hosting environment.
Release 1: The first public release of CARM was expected to provide businesses with new tools to manage their accounts with the CBSA. It was to include basic portal functionality, such as the CARM Client Portal with self-service tools for invoicing and payments.
Release 2: This full release was to introduce a new electronic commercial accounting declaration that will replace the current B3 customs coding form and B2 request for adjustment form. New features to the payment and billing processes was to make it easier for corrections and adjustments.
How will it be used?
CARM is intended to provide a more open concept of reporting to the importer but will restrict the accessibility of the customs broker. In order for an importer to use a customs broker for a transaction, the importer, as the Importer of Record (IOR) will need to grant the customs broker access to their account through the online CARM portal.
What are the primary differences between CARM and CADEX?
The current CADEX system requires importers or customs brokers to electronically file a B3-3 (Canada Customs Coding Form.) This is the only form that is submitted through the CADEX system. Every B3-3 requires a unique transaction number, which is comprised of a five-digit account security number, and a nine-digit unique number. CADEX transmissions must be done either by the importer or customs broker, and they are required to use their own software with their own five-digit account security number with CBSA. If there is an error found on the B3-3, a formal hard copy B2 form must be completed with CBSA in order to make an adjustment. Customs brokers have 5 working days following the date of the release of the shipment to confirm or send in the B3-3.
With CARM, importers will have their own account on the online CARM portal. As stated above, in order to submit a transaction using a customs broker, importers will have to grant customs brokers access to their account. However, multiple different types of entries can be done; CARM will also allow electronic refunds and electronic temporary entries in addition to the basic release of the B3-3. While the 5-day limit remains, there will be flexibility to make corrections to the B3-3 without having to go through the formal process of applying for a B2. CARM is expected to use a different format for transaction numbers.
How will payments be made using CARM?
Currently under the CADEX program, importers are given three types of payment structures: a) Importer Direct Security Option; b) GST Direct Payment Option; and c) Interim Payment Option. These options will no longer be available with CARM. It is expected that most importers will have to change from a GST direct client to an Importer direct client. This means that importers will have to pay both duties and taxes to CBSA, instead of just GST; because of this, Importers will need to post a surety bond.
A full rundown of what CARM will provide:
- Manage payment processing (on-line or pre-authorized payments, etc.)
- HS Classification tool, tariff data management
- Ruling requests available on-line
- Revenue reporting
- New portal functionality and notifications
- Electronic declarations
- Digital versioning and mass editing capabilities
- Basic re-assessing risk
- Case management functionality for appeals, compliance and risks
- New offsetting options
- CBSA pre-collection options
- Central trade data reporting
- Time window extended for corrections to transactions
- Business Number set-up
- Production and filing capabilities for accounting documents
- Correction or adjustments
- Mass edit (Blanket B2s)
- Immediate visibility to duties and taxes
- Generation of customized reports on import data (new FIRM reports)
- Advanced rulings will be filed and managed
- Audit documents made available – Letter of Intent, Interim and Final Report
- Penalty Documents
- Detailed adjustment notices
- HS Classification tool
- Landed Cost tool
- Links to AIRS and PGA site
More information about CARM will be added as we receive it.
Sources:
https://www.cbsa-asfc.gc.ca/prog/carm-gcra/menu-eng.html
https://www.cbsa-asfc.gc.ca/pd-dp/tb-ct/evp-pvp/carm-gcra-eng.html
https://www.cbsa-asfc.gc.ca/eservices/forms-formulaires/cadex-ax-eng.html
https://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2018/cadex-eng.html