Importers Advised Not to Submit Declarations and Claims During the CARM R3 Cutoff Period

The transition to CARM Release 3 (R3) will affect key trade programs and change how importers submit and process their declarations and payments.

The Canada Border Services Agency (CBSA) has advised importers and other trade chain partners (TCPs) to refrain from submitting declarations and claims during the CARM R3 cutoff period because of anticipated delays and service interruptions. The cutoff period will begin on October 4 at 4:00 p.m. ET and end on October 21 at 3:00 a.m. ET.

The CBSA cautioned that temporary lags in processing applications and claims will occur during the transition to the CARM system, especially in processing submissions for the Duties Relief Program (DRP), Duty Drawback Program, and Commercial Temporary Importations.

Moreover, the CARM Client Portal (CCP) will be unavailable and Customs Self-Assessment (CSA) enrolment activities will be paused throughout the cutoff period.

The anticipated changes, delays, and interruptions were revealed through Customs Notices 24-28, 24-29, and 24-30. These notices were issued to help importers and TCPs prepare for the official launch of CARM’s third release on October 21, 2024.

Services affected by the R3 cutoff period

Here are the services and programs that will be affected by the cutover period and transition to the CARM system:

• CCS and CADEX will be retired: The Customs Commercial System (CCS) and Customs Automated Data Exchange (CADEX) will be retired and replaced with the CARM platform.
  
  
• CCP will be unavailable: Importers and other TCPs will not be able to access the CCP during the R3 cutoff period. This means onboarding, applications, or submissions can only be made after October 21.

• CSA enrolment will be paused: CSA activities will stop during the R3 cutoff period and then resume after October 21 through the CCP.

• DRP and Duty Drawback Program will be delayed: Delays in submissions and processing are expected for the Duties Relief Program (DRP) and Duty Drawback Program claims.

• CARM testing environment will not be accessible: During the cutover period, the CARM testing environment will not be available. The lab will be accessible once again on the week of October 28.

• TTMS will remain available: Partners in Protection (PIP) enrolment will remain available in the Trusted Trader Management System (TTMS) throughout the R3 cutoff period without any interruptions.

Impact on the Duties Relief Program (DRP)

Starting with CARM Release 3, the process for applying to the Duties Relief Program (DRP) will change. The K90 application for enrolment in the DRP will be entirely electronic and only available through the CCP.

The CBSA advises importers and TCPs not to submit DRP diversion declarations during the R3 cutoff period to minimize delays and avoid complications.

Changes to the Duty Drawback Program

The Duty Drawback Program will see similar changes with the launch of CARM R3, where claims must be submitted through the CARM system.

Form B3 and Commercial Accounting Declaration (CAD) transactions for drawback claims will be processed electronically through the CCP. Supporting documentation for claims submissions can be attached to the case file within the platform.

New forms for Commercial Temporary Importations

Once CARM R3 is implemented, Commercial Temporary Importations under Tariff Item No. 9993.00.00 will also move to the CARM system. Starting October 21, the current E29B form, used for temporary importations, will be replaced with the new BSF865 form for commercial imports.

While non-commercial temporary imports will continue using the E29B form, all commercial importers must transition to the BSF865 form once the R3 cutoff period has ended.

Obtaining a Business Number for importation

During the cutover period, new importers requiring a Business Number (BN) and Program Account (RM) can continue to work with the Canada Revenue Agency (CRA) to get their BN and with the CBSA to get their RM account through the interim process, which will be available until October 18, at 12:00 p.m. ET.

However, after the implementation of CARM R3 on October 21, all BN and RM registrations must be processed through the CCP. 

Release processing will not be affected by the R3 cutoff period

CBSA has confirmed that release processing will remain available during the cutover period, except for a scheduled maintenance window from the evening of October 5 to the morning of October 6.

Yet, there will be significant changes to how importers and brokers receive release notifications. While the Release Notification System (RNS) will continue to transmit release messages during and after the CARM R3 implementation, CADEX Release Notification messages will no longer be sent once the cutover period begins.

Importers and brokers relying on CADEX for these notifications will need to explore alternative methods, such as querying transactions through the Application Program Interface (API) or referencing transaction data on the CCP.

A brief halting of accounting submissions

During the cutover period, electronic accounting submissions (B3 forms) will be paused, and importers must wait until October 21 to submit their Commercial Accounting Declarations (CADs). To continue processing critical goods, paper C-Type B3 accounting documents will still be accepted at commercial release offices.

Importers must also note that V-type B3 submissions will be paused during the cutover period and processed through the CCP starting October 21.

Changes to Statement of Account (SOA) and penalties

The October Statement of Account (SOA) will be issued on October 25. It will cover transactions submitted between September 25 and October 4 and CARM transactions from October 21 to October 24.

Payments must be completed by October 31 using your method of choice, such as online banking, Electronic Data Interchange (EDI), or point-of-sale (POS) systems. Importers who have registered for Pre-Authorized Debits (PAD) should coordinate with their customs brokers to avoid duplicate payments.

Penalties for late accounting or late payments will not be issued for 90 days after implementation. Nevertheless, the CRA may still take collection measures if accounts remain unpaid after their due dates.

Additional changes to business and operational processes

During the R3 cutoff period, the following business and operational processes will be affected:

Customs Bonded Warehouse (CBW) movements:

• CBSA will accept and process paper Type 10 B3 forms for the movement of goods within bonded warehouses.
• After October 21, importers and TCPs must enter these movements into the CCP for accurate electronic inventory records.
• For ex-warehouse movements, importers and TCPs can provide proof of in-warehouse approvals to remove goods from their warehouses.

Commercial Temporary Importations:

• The E29B form will continue to be used during the cutover period for commercial goods under Tariff Item No. 9993.00.00.
• There is no need to enter these forms into the CCP after October 21.

Duties Relief Program (DRP) and Drawback claims:

• Although the CBSA advises against submitting applications during the cutoff period, DRP applications and Duty Drawback claims will continue to follow the current processes.

Submission of adjustments and requests:

• CBSA recommends suspending submissions for Single and Blanket B2 Adjustments, Voluntary Disclosure requests, Duties Relief Program diversions, and Release Prior to Payment applications during the R3 cutoff period and submitting them electronically after October 21 through the CCP. 

Accounting

• CSA importers must submit their September Revenue Summary Form (RSF) by September 27 and their October RSF by October 3.
• September RSF payments are due on October 1, and October RSF payments are due on October 31.

Appeals:

• Appeals can still be submitted through the recourse e-mail process or via paper submissions.

Exchange rates:

• The Production API Exchange Rate will be announced by mid-September and maintained once CARM R3 is implemented.
• The last exchange rate file under the current system will be available on the weekend of October 5-6 and will be processed via the CCP after October 21.
• The current CCS production exchange rate and the Production API Exchange Rate will be maintained by the CBSA before the cutover activities begin. 

How to prepare for delays and service interruptions

To avoid business disruptions, the CBSA encourages importers to submit their electronic documents before the cutover period commences on October 4, especially for the Duties Relief Program (DRP), Duty Drawback Program, and Commercial Temporary Importations. 

Importers should also prepare for a backlog of CADs. The CBSA has provided the following schedule for submitting CADs held during the R3 cutoff period in their new electronic form:

Moreover, importers and brokers should ensure they have alternative methods to receive release notifications during and after the R3 cutoff period to avoid disruptions in their processes.

It’s important to note that accounting timeframes for Courier Low Value Shipments (CLVS) and Continuous Transmission Commodities (CTC) will remain the same. Declarations for these shipments will be due on the 24^th day of the month after the month they were released.

For more information on how the CARM R3 cutoff period might affect your business, please reach out to one of our trade professionals.