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Feeling like it’s CARMA-geddon? Not at all. Why CARM will make Canadian commercial importing easier (eventually)

Do you ever feel like your work life is filled with acronyms, some more heavily weighted than others? We’re throwing another at you: CARM, which stands for the Canada Border Services Agency (CBSA) Assessment and Revenue Management. Rather a mouthful, so abbreviating is our friend, here. What it is is a bit more complex. If you are feeling in the dark about CARM and what affects it may or may not have on you, you’ve come to the right place. 

In this series of articles, we’ll walk you through what CARM is, what its day to day impacts may look and feel like, what, if anything you need to do about it, and as always, how A & A customs brokers can help. We’ll also hear from A & A President & CEO, Graham Robins, on his take (or…takes, this one is a doozy) on CARM.

What is it?

CARM may sound familiar, as we did talk about it in 2020, when it was first expected to be rolled out, we even made a video explaining it! But…then it was postponed! You probably didn’t see anything in the news about it, despite “it” taking taxpayer dollars and having real-world implications on us all. 

Customs duties may not seem like the sexiest of topics for news (unless, like us, you live and breathe importing and exporting), but the business of our borders has real, day to day implications on us, and the government has a lot of money riding on ensuring our borders are flowing properly, and getting enough customs duties that they are owed. This multi-year initiative aims to upgrade and digitally transform the current importing process. Once implemented, CARM will provide importers with access to their trade information and account balances, direct payment solutions, and a myriad of trade tools that simplify their importing processes. CARM will make it easier for importers to track their forms, make payments, and reconcile trade reports in a more standardized way.

WHY is it?

It’s no secret that the CBSA has had some business systems that weren’t functioning properly. The whole system needed an overhaul, so they embarked on this ambitious project in phases, to ensure that the end result was worth the time, and worth the taxpayers dollars going into it. 

Publicly, the CARM project seeks to:

  • Strengthen audit controls.
  • Increase risk management.
  • Ensure higher compliance of Canada importers with import rules and regulations.

Less publicly, the objectives for the CBSA are more than a self-serve portal for businesses/trade partners to submit paperwork, allow monitoring of their activities, and the payment of customs duties. In truth, the driving force behind CARM is to strengthen controls the CBSA has over IORs (Importers of Record) to find areas where compliance is low and customs duties are being underpaid. At the end of the day, the CBSA wants to make sure it’s making as much money as it should be through duties, and is able to catch scofflaws. 

In this era where data is one of the hottest intangible commodities out there, it seems that the CBSA must be collecting quite a bank of highly useful data. What to do with that data is another question. The sheer volume of data taken in by the agency is part of why much of it is rendered ineffective, hence, CARM. We see CARM as an opportunity for both the CBSA and our customers to better understand and manage import rules and regulations. 

Is it mandatory? In a word, yes.

All importers to Canada are required to take part in the CARM initiative, which is currently in Phase/Release 1, detailed below. Although there is no impact on the release process of imports, every Canadian importer will be required to register and access the CARM Client Portal (CCP) for eligibility to import into Canada. It will help ensure that you’re fully compliant with import rules and regulations while paying the right customs duty

Registration must be completed before Release 2. The date for Release 2 is not yet 100% scheduled, but knowing it will be coming, it is in your best interest to be CARM compliant. CARM has no impact on the release process of your imports, but it will help ensure that you’re fully compliant with import rules and regulations while paying the right customs duty. 

What does CARM offer for importers?

From A & A President and CEO, Graham Robins, 

“For the majority of A & A’s customers, CARM will be about the modernization of the payment of duties & taxes. Historically, the CBSA has allowed importers to pay their customs brokers for duties & taxes rather than directly to the CBSA. For the majority of our tax payments like GST, HST or personal income tax – we pay the CRA or government agency directly, and now, with CARM, duties & taxes will be paid directly as well. Our largest customers are already paying CBSA directly, and now with CARM the rest of our customers will pay the CBSA directly for duties & taxes.”

CARM promises to further modernize and streamline the CBSA’s process of what is required for importing commercial goods into the country, i.e., make it better for importers. According to the CBSA’s website, the new project and systems it employs will:

Simplify the overall importing process

  • Provide a modern interface for importing into Canada;
  • Give importers self-service access to their information;
  • Reduce the cost of importing into Canada;
  • Improve consistency of compliance with trade rules.

As with Incoterms®, CARM looks to create a unified code that will make it easier for those importing commercial goods into Canada. 

Sign up for the CPP

First and foremost, if you have not already done so, you must register with the CARM Customs Client Portal – the CPP. Without it, you cannot import into Canada. If you find it daunting or just want someone to walk you through it, our friendly A & A customs brokers are here to help, so just drop us a line or send us an email.

The CARM Client Portal (CCP) is a webportal where every importer in Canada will have to register with CARM to do business with CBSA. This simple and secure transaction mechanism will allow importers self-service access to check on their shipments and update information, like the A & A web portal that our customers rely on for total visibility. Importers will be able to view their Statement of Account (SOA) with financial transactions, make credit card or pre-authorized payments, and submit appeals and rulings requests.

As of CARM Release 1, the CCP will only provide importers with a visual of Import Entry Numbers and amounts owing. In the future, a new suite of tools will be made available to assist importers and declarations via the new electronic Commercial Accounting Declaration (CAD).

Because of the scope of the project, which, as we mentioned, has already been postponed once, CARM is being rolled out in phases – or in CARM terms, releases. 

Release 1:

Release (or phase) 1 was launched on May 25, 2021, and included the launch of the CARM Client Portal, the Client Customs Portal (CCP), the self-service tool we just discussed. In addition to visibility, the self-service tool will facilitate accounting and revenue management processes with the CBSA. Important – and doesn’t it sound good to know that you’ll have some insight and autonomy into these streamlined processes? Hopefully, you feel a bit less in the dark already. 

The CARM Client Portal is a robust system, available to importers, brokers, and even trade consultants who operate on behalf of importers (this would ideally be your A & A Customs Brokers!). The Client Portal allows those who have opted in and on boarded to the Portal are able to manage almost everything virtually, from viewing transactions and account statements, to paying invoices with new electronic payment options, to requesting rulings from the CBSA.

Registration must be completed before Release 2. The Go-Live Date (for CARM Release 2) will be 1 of 2 dates in 2023, either May 2023 or October 2023. 

Are you feeling lost? From A & A President and CEO, Graham Robins,

A & A will take care of the CARM issues for you. This is a government initiative and program that we will do all the heavy lifting for, so our customers can concentrate on their own business and not the changes with the CBSA.”

In our next piece, we’ll discuss timing, what opportunities CARM represents for making the most of your customs brokerage experience and how A & A can set you up for success, no matter when the next release happens.

NOTE: All details pertaining to CARM R2 processes are based on the current information available at the time of writing. As this is subject to change, it’s recommended you periodically check in with the CBSA or your customs broker.