Customs Notice 24-15: Preparing for CARM Release 2 Implementation

The Canada Border Services Agency Assessment and Revenue Management system (CARM) is a multi-phase project to modernize the collection of duties and taxes for commercial goods imported into Canada. CARM will help to protect and grow over $750 billion in trade and $30 billion in revenue collected at the border each year by providing Canadian businesses with an online self-service tool and simplified importing processes.

With CARM, the Canada Border Services Agency (CBSA) is updating and upgrading its 35-year-old legacy systems through a series of releases. The initial phase of the project was launched in May 2021 and allowed importers, customs brokers, and trade consultants to view importer transactions and statements of account, request rulings, and pay invoices with new electronic payment options.

Recognizing the investment and impact that CARM represents for industry and for the Government of Canada, the CBSA is taking a phased approach to making it the official system of record for the collection of duties and taxes for commercial goods imported into Canada.

Release 2 soft launch took place in 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.

Making It Official

On May 13, 2024, CARM will become the official system of record for the imposing or levying 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, obtaining the release of imported goods prior to accounting and payment of duties 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 $5,000 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 security
  • make a cash deposit

Legislative changes to support a transition period

Transitioning to a new model for meeting financial security requirements and 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.

Based on the information the client provided on the CAD, the CARM system will automatically calculate the duties and taxes. Trade chain partners will be able to submit, correct, or adjust the CAD via the CARM Client Portal, 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. CARM will have an impact on the following billing cycles:

  • 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. 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; the FSA paper format will no longer be accepted. Other forms of financial security (beyond security deposits 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.

Helpful Links

ARGO Customs Brokers is at your service for any assistance with importing and exporting goods to and from Canada. The knowledgeable agents at ARGO Customs Brokers would be happy to help if the changes to CARM have an impact on you or your business.