CARM: Everything You Need To Know In One  Place

With Release 1 of the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) right around the corner, many importers are wondering how it will affect them and what they need to do to prepare. In Release 1, Importers will be able to create a CARM Client Portal (CCP). But what does this portal do and what MUST an importer use it for? To answer those questions, we interviewed our Canadian Regulatory Analyst, Gloria Terhaar, and Operations Manager, Cherie Storms to help guide you on your CARM quest.

Q: Is The Release Process Changing?

Cherie: There is no change in the release process with CARM Release 1. You will still be required to provide the same information you do now to your Customs Broker, if you use one, or directly to Customs if you don’t. The timelines for processing and review are also the same. As far as the physical movement of your goods into Canada, CARM doesn’t affect them at all. However, CARM Release 2 will affect the release of goods. Imported goods could be held up if you have not registered for the CARM Portal or ensured you have the proper financial security in place. Certain shipments will be documented differently for release, duties, and taxes will be processed in the CCP by the importer vs the customs broker, along with some other functionality.

Q: What Should Importers Do To Prepare For Release 1 Of CARM CCP?

Cherie: That’s THE question isn’t it! To understand what to prepare for, we must first look at one of the more important aspects of CARM: financial security. 

CBSA requires financial security for duty and tax owed on imports into Canada in order to enjoy what is called Release Prior to Payment (RPP) privileges, which is basically a fancy term for ‘import now, pay later.’ In other words, RPP lets importers’ goods through the port of crossing under an ‘I owe you’ which is backed by a D120 surety bond, or another form of acceptable security. 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. 

Now, how CARM Releases 1 and 2 affect any given importer depends on the financial security option they are using. The two most popular are “Broker Backed” and “Importer Direct.” 

Broker backed means that the importer’s duties and taxes owed 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.

If you are a Broker Backed Importer, CARM Release 1 doesn’t have much effect on you at this time, other than we encourage you to register now and start familiarizing yourself with your new CARM Portal. Release 2 has big-time ramifications if Importers do not act soon. They must decide how they will provide Customs with financial security. They have several options including posting a cash payment in the CARM CCP prior to their goods arriving at the port of crossing OR obtaining their own D120 import bond.

If you are on Importer Direct, you have the option of paying duties and taxes in the CCP with Release 1, but it’s not mandatory until Release 2.

Determine how CARM will affect your company with this guide.

Gloria: We are encouraging our clients to start discussing what method of financial security they will want, and if they decide on getting their own surety bond, to apply sooner rather than later to avoid the rush prior to Release 2.

Other actions to be taken are to determine who in your company will manage your CARM CCP, create it, and delegate access to your customs broker(s).

To see our full preparedness checklist click here.

Q: When Should Importers Create Their CARM Client Portal?

Cherie: Anytime after May 25th, 2021, and far in advance of Spring 2022!

Gloria: That’s right, don’t wait too long! You want to get a good handle on all the functions in the portal far in advance of it becoming mandatory to avoid any issues. However, we do suggest checking with your Customs Broker to make sure they are set up in the portal after Release 1 before you get started.

Q: What Is Involved In ‘Managing the CARM Client Portal’?

Cherie: With Release 2, Importers must use the portal to pay duties and taxes, make any adjustments, and other financial actions relating to their imports with CBSA. This will take some time to do on a monthly basis. So we are encouraging Importers to discuss how they might go about delegating this extra work. They can choose to self-manage, or have their Customs Broker do it for them. We will be offering a few different CARM management options for clients who would rather us do this work on their behalf.

Gloria: Importers will need to review their Statement of Accounts (SOA) on a monthly basis, make payments, make adjustments, and will also be able to apply for binding rulings, determine tariff classification and estimate duty and taxes within the CCP.

Q: How Do Importers Create A CARM Client Portal?

Cherie: There are four steps to it:

  1. First, you have to obtain a GC Key for every employee that you plan to delegate the portal work to, unless you plan to create your CCP using a sign-in partner such as a financial institution. You should also ensure that C suite management has access. 
  2. Next, you will need to go to the portal and sign in using your GC Key OR use a sign-in partner to create your user profile.
  3. Once your user profiles are complete, you will need to create your CCP business account. You will need your 9 digit Business Number (BN9) and your most recent Daily Notice/Statement of Account for the RM entered.
  4. Lastly, you will need to assign roles and delegate access to your Customs Broker(s).

Gloria: With regards to roles, there are several that can be assigned to both your internal staff and your external partners, like your Customs Broker.

The Business Account Manager, aka, the BAM, will have a high level of access and ability to conduct business with CBSA. The Business Account Manager is the person responsible for opening your business CCP. The BAM should be held by an individual with active involvement in the management of your business account (i.e. manages employee access, business relationships such as third-party service providers, and manages business and program accounts information). The BAM role is automatically given to the initial individual who links their user account to their business by completing the registration process. 

For Importers with multiple RM15 accounts, we recommend checking internally who will be in charge of opening your CCP. The party that does this will be responsible for delegating access to the business division (RM15) account you will be responsible for.

Due to the importance of this role, it is recommended for Importers to have more than one BAM. We recommend that your BAMs be a party responsible for your payments to CBSA and a party that is responsible for customs processes.

Q: What Access Level Should Importers Assign Their Customs Broker?

Gloria: We are recommending that our clients give PCB pBAM access, which is Proxy Business Account Manager. This allows us to do everything that we are currently doing for them should they request that service from us. Further, this access level will give us access to all functionality except for seeing and accessing sensitive business information, such as financials, employees, and business relationships.

Regardless of how active a role you want your Customs Broker to take in your portal, they will require delegated access prior to Release 2 in order to transmit the Customs Accounting Declaration (CAD) for your customs entries (currently known as the B3 accounting information).

Q: What Is Your Advice To Importers About CARM?

Cherie: Release 1 is your chance to get your feet wet in the new accounting process with CBSA. Set up your account and get comfortable with it. Make sure your company has discussed who will be managing the portal and when. Talk to your Customs Broker to see what options are available for management of your CARM account and ensure that you delegate access to them prior to Release 2 coming in Spring 2022.

Gloria: There are only so many surety companies and MANY importers. Apply early to avoid the inevitable queue.

We hope that this Q&A session helped answer your questions on CARM Release 1 and 2. However, if you still have questions, we encourage you to visit our CARM information page or contact us.

Need help managing your CARM Account?
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About Author
Lisa Stevenson

Lisa has been working in the international trade industry for over 15 years, with 11 years highway transportation expertise. A Kwantlen Polytechnic University School of Business Alumni in Marketing Management, Lisa works on behalf of importers and exports to translate complicated industry regulation into easy to understand tasks they can implement. In 2017 she was invited to speak at the Vancouver Fashion Week Export Workshop, helping international designers to understand textile import and export in Canada. She is well versed in Canadian and U.S. Customs brokerage trade topics and is currently studying for the Canadian Society of Customs Brokers Certified Customs Specialist designation.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.