CARM RPP and bonds
The CBSA's Assessment and Revenue Management (CARM) program is a new accounting platform being phased in by CBSA and expected to be fully implemented in 2023.
We know new systems can feel overwhelming, so we want to simplify CARM with easy-to-follow steps to help your business get ready.
Last time we covered the importance of registering on the CARM Client Portal (CCP) and how to delegate employees and service providers so they have access to the portal.
Financial security and CARM
This week we’ll go deeper into the other key change associated with CARM: financial security for Release Prior to Payment (RPP) privileges. Most commonly, this takes the form of an annual bond.
Release Prior to Payment privilege allows an importer the release of goods with additional time for final accounting and to defer payment of duties and taxes to a month-end summary payment according to CBSA’s billing cycle.
When CARM is fully implemented by CBSA in Release 2, all Commercial Importers will be required to post their own financial security in order to obtain Release Prior to Payment (RPP) privileges by way of a bond or cash deposit. Review your import history and financial information to decide which RPP method is best for your business.
With CARM, importers will no longer be able to use a broker bond for their imports into Canada. Without importer account security in place, a cash payment to CBSA will be required for the release of goods.
IMPORTANT: Begin the bond process early due to high demands and extended processing times as we get closer to full implementation (Release 2).
Financial Security for RPP
- Surety bonds will be set at 50% of the highest amount payable to CBSA in a 12-month period (inclusive of duties and GST). Currently stated, the minimum bond amount for RPP will be $25,000 per RM import account.
- Cash deposits will be set at 100% of the highest amounts payable to CBSA in a 12-month period (inclusive of duties and GST).
- CBSA is considering limited period bonds, however, has not released any details at this time.
- New importers without 12 months history will be able to provide estimates for the calculation.
- Importers with zero payout import history in the 12 month period will not require a bond but will need to be registered in the RPP program to maintain the current streamline release and accounting system currently in place. Further details on this registration process is to come from CBSA. Importers in this case should consider how payments or increases of security will be handled in the event of customs charges.
Remember: Once your bond process is complete, your business will begin remitting totals directly to CBSA. Obtaining your surety bond earlier allows you time to become familiar with the payment process to CBSA before CARM billing cycle changes take place. It also avoids delays related to high application demands as we near Release 2.
If you need help acquiring a bond, Cole can help. Request a CDN Bond now.
Watch for our next post explaining the steps involved in the CCP Registration process! For more information on all things CARM, visit our CARM webpage.
CARM. It's what we do.
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