CARM FAQWhat is CARM?
Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) is a new system for providing financial security for goods being imported into Canada. Under CARM, importers will be responsible for providing the own security rather than using security provided by their customs broker.
CARM is being introduced in two stages, in May 2021 and May 2022.
CARM also introduces the CARM Client Portal (CCP), which is a self-service portal that allows importers to more directly manage the accounting activity of their import business.
What does that mean?
CBSA requires financial security to be posted for the duty and tax owed on imports into Canada. With security in place, importers are granted Release Prior to Payment (RPP) privileges. This allows the goods to enter Canada before the duties and taxes have been paid. In the event that the importer is unable to pay the duties and taxes owed, and the goods are already in Canada, the financial security protects CBSA from any losses.
Currently there are two types of financial security: Broker Backed and Importer Direct.
Broker Backed means that the importer’s duties and taxes are secured by their Customs Broker’s import bond and paid to CBSA by that broker.
Importer Direct means that the importer has taken out their own bond and therefore pays duties and taxes owed directly to CBSA.
CARM release 2 is going to end the Broker Backed option. This means that if you are a new importer, or if you are currently using Broker Backed security, you will need to post your own security or pay duties and taxes before your imports enter Canada.
Under CARM, importers will be directly liable for customs duties and taxes and responsible for payment. However, a customs broker can still manage payments on behalf of an importer. The CCP will allow importers to delegate varying degrees of authority to their broker.
Does CARM affect personal shipments as well?
Customs brokers will still be able to provide financial security for non-commercial shipments of goods for personal use only. Importers of goods for personal use do not have to register for CARM.
What if I don’t want to register for CARM?
If you are importing commercially and do not have security posted through CARM, you will need to remit duties and taxes before your imports can enter Canada. If you are not registered with the CARM Client Portal, payment will have to be made to a CBSA cashier at a customs office when the goods enter Canada.
How much does my bond have to be?
Importers can post a continual surety bond equal to at least 50% of the value of their highest monthly amount payable to the CBSA in the last twelve months, with a required minimum of $25,000.
Alternately, you can post a cash bond for 100% of the value of your highest monthly amount payable to the CBSA in the last twelve months. Cash bonds will not be postable until CARM 2 goes live in Spring 2022.
Importers will also have the option of posting a one-time single entry bond. Details of this process are not yet available from CBSA.
If you had no payables to CBSA in the past twelve months (for example, if you are a first-time importer) a bond is not required.
This sounds complicated. What can King Bros do to help me?
King Bros can guide your company through the entire process. We can assist you to set up your CARM Client Portal and apply for a surety bond on your behalf. Contact us at info@kibro.com
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
What is CARM?
Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) is a new system for providing financial security for goods being imported into Canada. Under CARM, importers will be responsible for providing the own security rather than using security provided by their customs broker.
CARM is being introduced in two stages, in May 2021 and May 2022.
CARM also introduces the CARM Client Portal (CCP), which is a self-service portal that allows importers to more directly manage the accounting activity of their import business.
What does that mean?
CBSA requires financial security to be posted for the duty and tax owed on imports into Canada. With security in place, importers are granted Release Prior to Payment (RPP) privileges. This allows the goods to enter Canada before the duties and taxes have been paid. In the event that the importer is unable to pay the duties and taxes owed, and the goods are already in Canada, the financial security protects CBSA from any losses.
Currently there are two types of financial security: Broker Backed and Importer Direct.
Broker Backed means that the importer’s duties and taxes are secured by their Customs Broker’s import bond and paid to CBSA by that broker.
Importer Direct means that the importer has taken out their own bond and therefore pays duties and taxes owed directly to CBSA.
CARM release 2 is going to end the Broker Backed option. This means that if you are a new importer, or if you are currently using Broker Backed security, you will need to post your own security or pay duties and taxes before your imports enter Canada.
Under CARM, importers will be directly liable for customs duties and taxes and responsible for payment. However, a customs broker can still manage payments on behalf of an importer. The CCP will allow importers to delegate varying degrees of authority to their broker.
Does CARM affect personal shipments as well?
Customs brokers will still be able to provide financial security for non-commercial shipments of goods for personal use only. Importers of goods for personal use do not have to register for CARM.
What if I don’t want to register for CARM?
If you are importing commercially and do not have security posted through CARM, you will need to remit duties and taxes before your imports can enter Canada. If you are not registered with the CARM Client Portal, payment will have to be made to a CBSA cashier at a customs office when the goods enter Canada.
How much does my bond have to be?
Importers can post a continual surety bond equal to at least 50% of the value of their highest monthly amount payable to the CBSA in the last twelve months, with a required minimum of $25,000.
Alternately, you can post a cash bond for 100% of the value of your highest monthly amount payable to the CBSA in the last twelve months. Cash bonds will not be postable until CARM 2 goes live in Spring 2022.
Importers will also have the option of posting a one-time single entry bond. Details of this process are not yet available from CBSA.
If you had no payables to CBSA in the past twelve months (for example, if you are a first-time importer) a bond is not required.
This sounds complicated. What can King Bros do to help me?
King Bros can guide your company through the entire process. We can assist you to set up your CARM Client Portal and apply for a surety bond on your behalf. Contact us at info@kibro.com
By Robin Smith, M.A., CCS
– Robin is a trade industry professional based in Victoria, BC.
