What importers need to know about CARM.

We posted earlier about upcoming changes the Canada Border Service Agency (CBSA) is making to streamline its import processes. Carson International recently held a webinar addressing these changes in greater detail; we attended this session to gather information we could share with our clients and readers. Everything is listed below.

What is CARM?

CARM is the CBSA’s Assessment and Revenue Management project and has been described as a “radical change from the present”. (As per Carson, these changes have been under consideration since 2012-2013, with implementation delayed several times in the last four to five years.) CARM’s ultimate goal is to remove the ‘paper burden’ from importers and brokers, and requires importers to deal directly with the CBSA on financial matters, rather than through a customs broker. The program is primarily focused on accounting rather than the release of shipments from customs. The CARM program is being implemented in two phases, the first starting May 25, 2021 and the second being launched in the spring of 2022.

What is phase one?

Account set-up is the first step under CARM phase one. All registrants (importers and customs brokers) will need to register and, ultimately, create individual user accounts that link back to the business accounts. Business account managers – i.e., trusted employees and third parties – will be given read, write, and edit privileges in order to manage and view a company’s transactions with the CBSA. In full, registrants and users will be able to:

  • View transactions posted to their accounts,
  • Make payments by credit card or set up pre-authorized debit,
  • Delegate portal access to employees and third parties (such as customs brokers and/or trade consultants) to manage commercial imports activities,
  • Request and track the progress of rulings electronically, and
  • Classify goods and estimate duties and taxes.

The CARM portal will open for registration on May 25; however, it is consultants and brokers who will first need to access the portal. As per Carson presenters, it will take time for importers to gain access, and they “should not think of going into the portal until June 25.” Carson presenters also stressed the importance of allowing only trusted employees and partners to access individual accounts, and keeping accurate and up-to-date delegate records.

What is phase two?

Phase two ushers in changes to the Release Prior to Payment (RPP) program. Under CARM phase two, importers can no longer use their customs broker’s RPP security to clear shipments and receive release prior to accounting and payment of duties and taxes. In short, a minimum bond will be required by ALL importers. They will have two options to be eligible for RPP:

  • A continual surety bond for 50% of their highest monthly accounts receivable (with a minimum bond of $25,000), or
  • A cash security for 100% of their highest monthly accounts receivable.

The fiscal year for determining highest monthly accounts receivable will be July 25 to July 24; new importers who wish to post but don’t have a complete one-year history will be allowed to estimate their receivables. Carson delegates did express concern as to how the new rules would affect young companies that might not have built up the resources needed to cover these bonds directly; however, like many customs brokers, they are watching the program’s implementation and reiterated their commitment to helping their clients prepare for these changes.

Phase two is scheduled for implementation in the spring of 2022, and will also introduce new billing cycles and payment due dates for high and low value shipments (HVS and LVS respectively), courier low value shipments (CLVS), continuous transmission commodities (CTC), and the customs self-assessment (CSA) program, with the new due date being 10 weekdays (including holidays) after the 17th of each calendar month.

More details about CARM can be found on the CBSA’s website. Note that the CBSA also posts a list of licensed customs brokers who can help navigate the new landscape. And as always, follow our blog for more trade updates.

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