CARM Release 2 is happening May 2024.
One of the biggest changes introduced by the Canada Border Services Agency (CBSA) Assessment And Revenue Management (CARM) is the need for importers to provide their own financial security in order to be eligible for Release Prior to Payment Privileges (RPP).
How to post CARM financial security
The benefit of RPP is it allows goods to be released into Canada before duties and taxes have been paid to the CBSA. In order to be eligible for RPP, an importer must post financial security using one of the following two options:
1. A continual surety bond equal to 50% of the importer’s highest monthly amount owed to the CBSA in the past 12 months. The minimum required amount for an annual surety bond is $25,000. Importers without a 12-month history will need to estimate duties and taxes. The surety bond must be obtained from a surety company.
2. A cash security deposit for 100% of the highest monthly amount owed to the CBSA in the past 12 months. The cash deposit can be posted to the account by making a deposit through the CARM Client Portal (CPP) after Release 2.
How to determine your security amount
The CBSA will display the required bond amount in the CPP after Release 2. However, RPP security is required as of the first day of Release 2, so it’s recommended for importers to calculate their required financial security amount prior to CARM Release 2.
As an importer, you should first decide which financial security you are posting. From there, calculate how much you paid to the CBSA in each of the past 12 months. This includes duties, taxes and SIMA assessments. This does not include penalties (AMPS) or brokerage costs. You can request all of this information from your customs broker. If you plan to post a cash security deposit, you can do so in the CPP.
If you plan to post an annual surety bond, you can contact your customs broker and request for them to obtain a bond on your behalf. Remember, the bond needs to be equal to 50% of your highest monthly payables from the last 12 months, with a minimum of $25,000. You can find more information on continual surety bonds from the CBSA D17-1-18 Memo.
Why you should get your surety bond now
While you will be starting direct payments to the CBSA early, getting your surety bond now means you will avoid the anticipated large backlog expected to occur in the spring. Over 200,000 importers will be getting their bonds in the spring, and there could potentially be price increases that follow due to the large demand. Moreover, you don’t want the backlog to potentially disrupt your cycle.
More questions about CARM? Reach out to our team for any CARM questions you may have. We’re always here to help!