An Editor's Note: with Release 2 now having no set date, as of Feb 2022, kindly bare this in mind while reading.
The Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) will introduce a new Commercial Accounting Declaration (CAD) in Release 2 which is scheduled for Spring 2022.
The CAD will enhance and replace the current B3 (Customs Coding) and B2 (Request for Adjustment) processes.
What Is A CAD?
The Commercial Accounting Declaration (CAD) is a digital document to account for imported goods into Canada. The CAD will allow a single document to submit accounting information to the CBSA and also allow the importer or authorized service provider (customs broker) to make changes or adjustments while maintaining the history of the document.
This “version management” of the CAD within the CARM Client Poral (CCP) will eliminate the requirement to account for submissions and changes on separate document types and create a single accounting declaration of record.
What Is The CAD Process?
The CARM system will automatically calculate the duties and taxes based on the information provided by the client on the CAD. Clients will be able to submit, correct or adjust the CAD via the CARM Client Portal or Electronic Data Interchange (EDI). The transaction number initially submitted with the original CAD remains no matter how many versions are created. All versions of the CAD are recorded in the transaction history for audit purposes. With CARM, the release date triggers the CAD submission date, and subsequent correction and adjustment period as well as the payment due date. This is no different than how the process for accounting for goods works today. CADs can only be submitted by an importer or licensed and authorized customs broker with delegated access to the importer’s business account.
Here is an example of how a CAD submission works for a High Value Shipment (HVS) or a Low Value Shipment (LVS) entry:
- The importer/customs broker submits the shipment release data to the CBSA as they currently do in IID and/or ACROSS.
- CBSA renders a release decision and a notification is sent to the importer/customs broker via the Release Notification System (RNS). The transaction number and release date will be transmitted to the CARM portal which enables the CARM system to know to expect the CAD within the time frame outlined in our blog “CARM | Billing Cycle Changes.”
- The importer/customs broker submits the CAD via the CARM CCP or via EDI within the prescribed time frame. If the customs broker submits the CAD, the importer can still edit and make corrections up until the due date. Any service provider with delegated access can make adjustments after the due date.
- The CAD is posted to the importer’s account on the portal at which time it can be reviewed, and if any errors are found, the CAD may be corrected.
- The date of release determines the billing period and associated payment due date.
- Corrections may be made up until the payment due date, after which time any changes or corrections made to the CAD are considered adjustments.
It is important to note that once CARM is implemented, the CBSA will calculate the duties and taxes owing on the shipment based on the information provided in the CAD and the value of the duties and taxes is posted on the importer’s accounts receivable sub-ledger. The importer/customs broker is notified of the results of the duties and taxes calculation and can view the CAD on the portal and make changes/corrections as required.