New for the spring of 2021, importers and customs brokers in Canada will be expected to adapt to the changes enforced under CARM.
CARM: the CBSA Assessment and Revenue Management program.
This multi-year initiative will 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. This change is intended to roll out over the next 24 months and will 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.
New Timelines Published:
Implementation Stage: CBSA is currently in Release 0.
Release 0 (January 2021): The existing ARL system is being moved from its current data center configuration to the SAP S4/HANA system. External users of this system are not to experience any change to the Importers Daily Notices. Although these notices may be delayed a few days due to the implementation of Release 0 for EDI clientele.
Release 1: (Spring 2021) The first public release of CARM is expected to provide businesses with new tools to manage their accounts with the CBSA. It will include basic portal functionality, such as the CARM Client Portal with self-service tools for invoicing and payments.
Release 2: (Spring 2022) This full release is 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.
What can we expect on how will it be used?
CARM will provide a more open concept of reporting to the importer but will restrict the accessibility of the customs broker. 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.
Under 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 based on the value of tax paid.
“All importers will be required to post their own security to participate in the Release prior to payment (RPP) program. A commercial shipment will not be released prior to payment (of duties & taxes) unless the importer has posted a surety or cash bond. The CBSA is working on the conditions upon which releases will be impacted due to inadequate security. CBSA recommends that the amount of RPP security an importer (resident or non-resident) posts should be based on their highest historic monthly accounts receivable over a 12- month period, inclusive of duties, taxes (GST), fees, and penalties. It is the importer’s responsibility to manage and maintain the appropriate amount of RPP security relative to their accounts receivable, inclusive of duties, taxes (GST), fees, and penalties. The $10 million cap in place today will remain. An importer will have the flexibility to make interim payment to reduce their RPP security utilization and raise or lower their RPP security to account for seasonality or other fluctuations in their business.” – CSCB
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’s new timelines can be found here: https://www.cbsa-asfc.gc.ca/prog/carm-gcra/menu-eng.html