At Gallagher, our team is ready to help you as the Canada Border Services Agency (CBSA) introduces new measures for collecting duties and taxes on commercial goods imported into Canada. The CBSA Assessment and Revenue Management (CARM) digital initiative is set to revolutionize the assessment and collection process for duties and taxes on commercial goods imported into Canada.
Effective May 13, 2024, CARM will become the official system of record that you, as an importer, must use to pay duties and taxes. You'll be required to provide direct financial security to clear your shipments for arrival into Canada directly through this portal.
What is CARM?
The CBSA is in the process of instituting a new program to streamline how duties and taxes are collected for cross border shipments. This new program is called the Canada Assessment and Revenue Management (CARM) project, and its aim is to modernize how businesses import goods into Canada.
What is the CARM Client Portal?
To help importers, customs brokers and trade consultants manage their accounting and revenue processes with the CBSA, the agency has created a self-service tool called the CBSA CARM Client Portal. This portal allows users to view their transactions and statements of account, classify goods and estimate duties and taxes.
It's important to note that the CARM portal will become the official system of record to pay commercial import duties and taxes. All importers and other trade chain partners must register and prepare to account for imported commercial goods through CARM before May 13, 2024.
The CARM portal is now live, with the expectation that all importers register before May 2024 to avoid any delay of commercial goods being shipping into Canada, as they will be dependent on these significant changes after that date. With this new program, importers will take on more responsibility for their importation process, products and customs fees associated. For more information visit CARM: The new way to assess and pay duties and taxes on imported commercial goods (cbsa-asfc.gc.ca).
How does the CARM portal affect you?
Importers who register in CARM, may benefit from the Release Prior to Payment (RPP) program financial security transition period of 180 days. During this transition period, importers must meet their financial security requirements by obtaining an RPP bond or posting the required security deposit in the CARM portal. You can register on the CARM portal here CARM Client Portal.
If importers do not obtain their own RPP security, they will not be eligible for RPP benefits and will have to establish ways to pay duties and taxes at the time of entry, hindering the flow of goods.
What organizations does CARM affect?
CARM is applicable to any organization that :
- Imports commercial goods as seldom as once a year
- Uses a customs broker to import commercial goods
- Imports commercial goods through a courier
- Imports goods that will later be sold
- Imports goods for any commercial, industrial, occupational, institutional, or other like use
For instance, a home-based business that offers manicures and pedicures and imports products from a supplier in the US would be affected by the changes. Another example is a manufacturing plant that imports widgets from outside Canada that relied on a customs broker for financial security; they can no longer depend on the customs broker for financial security.
This change includes businesses located outside Canada that ship goods to customers in Canada and are responsible for customs clearance and other import-related requirements; these non-resident importers (NRIs) must register on the CARM Client Portal.
What are the changes to Canada Customs for the importation of commercial goods?
| What's changing? | Before May 13, 2024 | After May 13, 2024 |
| Who's responsible for providing financial security | Approx. 90% customs brokers Approx. 10% importers |
0% customs brokers 100% importers |
| Minimum bond amount | $5,000 | $5,000 |
| Maximum bond amount | $10,000,000 | $10,000,000 |
| Bond calculation | Average monthly duties & taxes in the past 12 months | 50% of the highest monthly duties, taxes (including GST) in past 12 months |
How do you provide financial security?
You have two options for providing financial security :
- Customs bond (Release Prior to Payment bond): This bond is equivalent to 50% of the highest monthly account receivable, with a minimum bond amount of $5,000.
- Cash security: This option requires a security amount equal to 100% of the highest monthly account receivable, with no minimum requirement.
What is a Release Prior to Payment bond?
A Release Prior to Payment bond allows importers of commercial goods to provide security to the CBSA to release goods into Canada. This bond guarantees the payment of duties and taxes, allowing goods to be released from customs before payment is made. It provides importers with the ability to post security with the CBSA against the release of goods being imported into Canada.
Are you an importer of commercial goods?
If you are an importer, please complete the RPP bond application and email the completed application to the client solutions team in your region :
The bond amount must be at minimum $ 5,000 or equal to 50% of the highest monthly duties and taxes — including goods and services tax (GST) in the last 12 months.
Your Gallagher Solutions team is ready to support you in navigating the changes brought about by CARM. We have the expertise and resources to provide you with the necessary assistance. Applying for an RPP bond is a simple and efficient process. You can either complete the RPP application or reach out directly to your solutions team, whether you are an importer or a customs broker. We'll serve as your representative throughout the bond procurement process and work closely with you to ensure the protection of your release prior to payment privileges.