CARM is CBSA’s Assessment and Revenue Management program which will redefine the way Canadian businesses collect and report on import revenue and trade information, as well as manage shipments across the border.
Because of the huge impact this program will have on the trade industry, CARM is implemented in stages. As of Spring 2021, we have achieved Release 0, an internal change with virtually no side-effects to users. On May 25th, 2021, Release 1 will come into effect, but the biggest changes will arrive in June 2022 with Release 2.
How to prepare for Release 2
Preparing your Importer Security Bond
You will need to set up your Importer Security Bond, which is mandatory under CARM. You will not be able to import without it. This is the Release Prior to Payment (RPP) bond which can be obtained from a surety company. Any importers without the RPP with either a cash bond or secure bond will be required to pay duties and taxes prior to the release of their shipment. Importers with $0 monthly accounts payable are not required to have a bond.
The secure and cash options available to be eligible for RPP:
- Posting a surety bond for 50% of highest monthly accounts receivable with a minimum bond of $25,000. For example:
- Highest monthly accounts receivable is $100,000, importer to post a surety bond for $50,000
- Highest monthly accounts receivable is $20,000, importer to post a surety bond for $25,000
- Post a cash deposit with the CBSA for 100% of highest monthly accounts receivable.
Customs brokers simplify this process. If you’re an importer, you can arrange obtaining the RPP through your customs broker.
Commercial Accounting Declaration (CAD)
The Commercial Accounting Declaration (CAD) is a digital document that will replace the current customs coding form (B3) and request for adjustment form (B2). Duties and taxes will automatically be calculated based on information presented on the CAD. Delegation of authority must be performed in order for a customs broker to submit a CAD on behalf of an importer, which is highly recommended.
A correction period will be introduced that allows changes between CAD submissions and the payment due date, interest-free. Changes made after this period will be subject to CBSA review. Mass adjustments can be submitted without prior CBSA approval in certain cases.
Harmonized Billing Cycles
CARM will introduce harmonized billing cycles that aligns payment due dates and provides more time to make interest-free corrections on documents. The payment due date will be 10 weekdays (Mon-Fri) after the 17th of the calendar month.
Checklist to prepare for Release 2
While there is a lot of information regarding CARM and the changes it will bring, we can distill down the necessary changes for importers in order to make the transitional process as smooth as possible:
- Set up your Importer Security Bond, as this will be mandatory for importers to have shipments released prior to paying duties and taxes.
- Obtain a Business Number and set up an account in the CARM Client Portal.
- Delegate authority to a third-party service, like a customs broker.
- Take a look through the CARM Client Portal and familiarize yourself with the processes, including the new CAD document.
CARM is going to change the importation process, but that doesn’t mean you have to get lost in the changes. A customs broker like Border Brokers can simplify the process and grant peace of mind that your shipments will continue to cross the border smoothly and efficiently.