New mandatory system for Canadian importation

ARTICLE | February 20, 2024

Authored by RSM Canada

Executive summary

The CBSA Assessment and Revenue Management (CARM) system will enter into use on May 13th, 2024. CARM will be the system of record to interact with the CBSA for commercial import shipments into Canada. Proactively ensuring necessary registrations and other requirements are met before May 13th will prevent interruptions in importing and doing business with the CBSA.

New mandatory system for Canadian importation

The Canada Border Services Agency (CBSA) has announced that the CBSA Assessment and Revenue Management (CARM) system will enter into use on May 13th, 2024. CARM will be the system of record to interact with the CBSA for commercial import shipments into Canada.

The CARM system introduces material procedural changes for importers. Proactively ensuring necessary registrations and other requirements are met before May 13th will prevent interruptions in importing and doing business with the CBSA. The CBSA has advised that importers trying to import commercial goods on May 13th without a CARM Client Portal (CCP) account will be ineligible to import. It is likely that some importers will not have registered for the CCP causing border congestion and potential supply chain disruptions. Importers should therefore consider increasing critical imports into Canada prior to May 13th to plan for this potential disruption.

Registration

Importers will need to register for a CCP account to continue importing activities. To complete the CCP registration process, the business will need the following information:

• A GCKey or the ability to use a sign-on partner (financial institution linked to the CBSA systems)
• Business Number (BN 9)
• Import/Export Program account (RM)
• Statement of Account and/or Daily Notice

Individuals at the business that require CPP access will need their own personal CARM profile. The level of access and authorization each individual will have to the business’ account can be controlled. The individual who initially registers the business will normally be the business account manager and have the highest level of access and authorization.

Delegation of authority

Importers can delegate their customs broker the authority to act on their behalf in the CCP. To ensure a smooth transition with the new system, importers should ensure this authority is delegated in CARM well before May 13th.

Release prior to payment privileges

Importers that participate in the Release Prior to Payment (RPP) program can have their imported goods released by the CBSA before payment of duties and taxes if sufficient security is posted. Importers may currently be utilizing the RPP security of their custom broker for the expedited release of their imported goods. However, once CARM becomes mandatory on May 13th, commercial importers will need to post their own financial security to participate in RPP. The CBSA has advised as long as importers have registered in the CCP, they will have 180 days to transition to meet the required financial security obligations to continue to enjoy RPP benefits.

Potential opportunity for rationalization

Given this system change, it is suggested that importers review all of their RM accounts and consider consolidating and/or eliminating any unnecessary RM accounts. Financial security requirements will need to be met for all RM accounts.

Recommended practices for use of CARM

There may be unexpected issues with CARM uncovered as it becomes available and used by a wider audience. To ensure a smooth transition, those who import commercial goods into Canada should register their businesses in the CCP and delegate necessary authorities prior to May 13th. Entities which are not registered in time will, according to the CBSA, be ineligible to import until CCP registration is complete. Importers looking to use the RPP should also ensure they are positioned to post the necessary security being mindful of the transition timelines for doing so. For additional assistance with navigating the transition to CARM, please see the CBSA’s resources¹ and contact your RSM Canada trade advisory team.

[1] “CARM: The new way to assess and pay duties and taxes on imported commercial goods”, accessible at: https://www.cbsa-asfc.gc.ca/services/carm-gcra/menu-eng.html.

This article was written by Jaime Seidner, Cassandra Knapman and originally appeared on 2024-02-20 RSM Canada, and is available online at https://rsmcanada.com/insights/tax-alerts/2024/new-mandatory-system-for-canadian-importation.html.

The information contained herein is general in nature and based on authorities that are subject to change. RSM Canada guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM Canada assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM Canada Alliance provides its members with access to resources of RSM Canada Operations ULC, RSM Canada LLP and certain of their affiliates (“RSM Canada”). RSM Canada Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM Canada. RSM Canada LLP is the Canadian member firm of RSM International, a global network of independent audit, tax and consulting firms. Members of RSM Canada Alliance have access to RSM International resources through RSM Canada but are not member firms of RSM International. Visit rsmcanada.com/aboutus for more information regarding RSM Canada and RSM International. The RSM trademark is used under license by RSM Canada. RSM Canada Alliance products and services are proprietary to RSM Canada.

Virtus Group is a proud member of the RSM Canada Alliance, a premier affiliation of independent accounting and consulting firms across North America. RSM Canada Alliance provides our firm with access to resources of RSM, the leading provider of audit, tax and consulting services focused on the middle market. RSM Canada LLP is a licensed CPA firm and the Canadian member of RSM International, a global network of independent audit, tax and consulting firms with more than 43,000 people in over 120 countries. Our membership in RSM Canada Alliance has elevated our capabilities in the marketplace, helping to differentiate our firm from the competition while allowing us to maintain our independence and entrepreneurial culture. We have access to a valuable peer network of like-sized firms as well as a broad range of tools, expertise, and technical resources. For more information on how the Virtus Group can assist you, please call us at 855-206-5697.