On October 21, 2024, CARM will become the official system of record for imposing or levying duties and taxes.
The Canada Border Services Agency’s (CBSA) Assessment and Revenue Management (CARM) initiative marks a significant milestone in the modernization of Canadian customs operations. CARM will transform how import duties and taxes are assessed and collected. This will pave the way for more efficient and streamlined processes for businesses involved in international trade with Canada.
What is CARM?
The Canada Border Services Agency (CBSA) introduced CARM to streamline and modernize import processes. This multi-year initiative is designed to simplify processes for importers and improve data accuracy and overall efficiency in customs operations.
CARM applies to all businesses importing commercial goods into Canada, including importers of record, customs brokers, and trade consultants. By transitioning to a digital platform, CARM empowers importers with greater control and visibility over their customs transactions. The changes will include features such as online self-service portals, electronic payment options, and improved communication channels with the CBSA.
Key Features of CBSA CARM
CARM Client Portal (CCP)
The CARM Client Portal (CCP) serves as a centralized online platform for importers to manage their interactions with the CBSA. Through the CCP, businesses can access their accounts, submit import declarations, make payments, track shipments, and communicate with CBSA officials. This self-service portal empowers importers with greater control and visibility over their customs transactions.
Commercial Accounting Declaration (CAD)
CARM will replace the traditional paper-based B3 customs coding and B2 adjustment request forms with Commercial Accounting Declaration (CAD). These digital declarations streamline the process of accounting for imported goods, allowing for faster processing times and reducing the risk of errors. Importers and customs brokers can submit, correct, and adjust CADs electronically, enhancing efficiency and accuracy.
Changes to Payment and Bonding
There will be significant changes to payment and bonding requirements with the introduction of CARM. Importers will be required to post their own financial securities to participate in the Release Prior to Payment (RPP) program, shifting the responsibility for duty and tax payments from customs brokers to importers. This change necessitates careful planning and management of financial resources on the part of importers.
New Billing Cycles
New harmonized billing cycles will be implemented with CARM, aligning payment due dates for importers across different import streams. This standardization simplifies accounting processes and provides greater predictability for businesses. As such, importers can anticipate consistent payment deadlines, facilitating better financial planning and management. The new billing cycle will align payment due dates for all commercial transactions, including High Value Shipments (HVS) and Low Value Shipments (LVS). This standardization applies to most import streams, with a few exceptions.
Advanced Data Analytics
CARM leverages advanced data analytics to enhance compliance monitoring and risk assessment. By analyzing trade data, the CBSA can identify potential areas of concern and focus its resources more effectively. This data-driven approach strengthens border security and trade compliance, fostering a fair and efficient trading environment.
Phases of CARM Implementation in Canada
The CBSA has been rolling out CARM in a phased approach to ensure a smooth transition for businesses and to allow for continuous improvement based on feedback and experience.
Release 1 (May 2021)
Release 1 of CARM marked the initial launch of the CCP, enabling businesses and importers to register, set up their accounts, and access basic functionalities. This phase allowed importers to view their transactions, request rulings, and begin familiarizing themselves with the new system.
Release 2 (May 2024)
CARM Release 2 was an internal launch focused on enhancing compliance and validation activities within the CBSA. This phase involved testing new trade compliance tools and refining internal processes to ensure the system’s readiness for full-scale external use.
Release 3 (October 2024)
Release 3 represents the full implementation of CARM in Canada for all importers. This phase introduces CAD, making them the official method for accounting for imported goods. Additionally, Release 3 mandates the posting of security (surety bond or cash deposit) for importers participating in the RPP program. The CCP also gains additional features, such as enhanced payment management tools and access to more detailed customs data.
Impact of CARM on Canada Customs
Streamlined Compliance
CARM simplifies trade processes for Canadian importers by providing a centralized online portal for managing customs transactions. The CCP offers a one-stop platform for submitting customs declarations, making payments, tracking shipments, and accessing important information. By utilizing the CCP effectively, importers can ensure accurate and timely customs declarations.
Mandatory Registration
All importers must register in the CCP to conduct customs business in Canada. This mandatory registration is essential for accessing CARM functionalities and fulfilling import obligations. Failure to register will result in the inability to file declarations, make payments, or participate in key programs like the RPP.
Posting Security
CARM introduces new financial security requirements for importers who wish to participate in the RPP program. Importers must now post security in the form of surety bonds or cash deposits to guarantee their compliance with duty and tax payment obligations. This change places greater financial responsibility on importers and necessitates careful planning to meet these requirements.
Preparation for CAD
The transition to the CAD system under CARM requires importers and customs brokers to adapt their internal processes. CAD impacts data reporting, commercial accounting, and customs transactions, necessitating adjustments to workflows and potential investments in new softwares.
How to Prepare for CARM
Register for CCP
If you haven’t already, register for the CCP as soon as possible. This is critical to ensure that your shipping processes to Canada experience as little disruption as possible. The CCP platform is the central hub for managing your customs transactions online under CARM. Familiarize yourself with its functionalities, including submitting declarations, making payments, and accessing important trade information. Early registration allows you to adapt to the new system and avoid potential disruptions to your import operations.
Understand and Adapt to New Financial Requirements
CARM introduces significant changes to financial security requirements, particularly for importers participating in the RPP program. Review the new requirements carefully and assess your financial capacity to meet them. Determine whether you need to secure a surety bond or make a cash deposit to maintain your RPP eligibility. Proactive financial planning is essential to ensure uninterrupted import operations under CARM.
Transition to CAD
Prepare your internal processes and systems for the transition to CAD. These electronic declarations will replace Canada’s traditional B3 customs coding and B2 adjustment request forms and necessitate adjustments to your data reporting, commercial accounting, and customs transaction procedures. Therefore, you’ll need to evaluate your current systems and consider investing in new software or technology to ensure seamless integration with CARM’s CAD system.
Review and Update Compliance Processes
CBSA CARM necessitates a review and potential update of your existing compliance processes. Evaluate your current procedures to ensure they align with CARM’s requirements and incorporate any necessary changes. This may involve updating your internal controls, documentation practices, and communication protocols to maintain compliance with the new regulations.
Prepare Your Business for CARM Today
Whether you’re bringing in food products or shipping vehicles into Canada, if you’re in the business of importing goods into Canada, it’s crucial for you to be prepared for the implications of CARM for importers.
As CARM modernizes operations and enhances revenue management in Canada’s customs landscape, your business will need to proactively register for the CCP, understand the new financial security requirements, and train your staff on the updated processes.
CrimsonLogic’s customs software solutions, such as its Integrated Import Declaration (IID) software, offer an efficient and user-friendly way for you to ensure CARM compliance. The IID solution empowers businesses to seamlessly navigate CARM’s requirements, from submitting electronic declarations to managing payments and ensuring accurate data reporting.
Ready to streamline your import processes? Apply today to smoothly move your business into the CARM era with the IID software’s full suite of solutions.
