An Introduction to CARM For Importers

A graphic representation of the numerous tasks involved in CARM. A person multitasking various acts represented by a laptop, coins, currency symbols, and documents.
Confused about Canada's CARM system? This article provides clear answers to common questions, helping importers and exporters understand what they need to know for international trade.
August 18, 2023
Last Modified: May 15, 2024
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The CARM system now being used in Canada is specifically designed to manage incoming commercial imports. All B2B transactions, regardless of size or value, must utilize it. 

Key Takeaway:

The Canada Border Service Agency (CBSA) has now implemented the Assessment and Revenue Management (CARM) project that streamlines how import duties and taxes are paid. With full implementation in effect, the CARM portal is now the only way for importers to submit payments and complete the import process.

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An Overview: What is CARM and Why it Matters

The CBSA Accounting and Revenue Management (CARM) project is Canada’s multi-year plan to facilitate Customs by having a single system to handle all commercial trade transactions and data.   

The official CARM release and launch has been done in stages.

  • May 25, 2021: Release 1 marked the official live launch of the CARM Client Portal. At the time of launch, data on import entry numbers and owed fees were recorded and made visible.
  • October 2023: A soft launch of Release 2 allowed software and development companies to test their work within CARM.
  • May 13, 2024: The official launch of Release 2, whereby all commercial import transactions, no matter how large or small, must be completed via the Client Portal. 

Once the official launch is complete, the Canada Revenue Agency, which currently oversees imports and certain payments, will cease to function in that capacity. 

By May 2024, any business exporting goods to Canada, whether they are based in Canada, the United States, or elsewhere, must have a portal account to manage their payments and other related tasks.

Getting Started: Register With the CARM Client Portal

The first step to using this new system is the CARM client portal (CCP). The CCP is the online platform where importers, customs brokers, and trade consultants can access CARM’s essential features. 

When registering with the CARM portal, you’ll have two personal profile options:

  1. Business Account Manager (BAM)
  2. Employee

As a business account manager, you can register your business and then create an account for employees to access it. Employees still create their own personal accounts and then have the option to ask for access to a business account. 

Let’s look at the registration process in more detail.

The Onboarding Process

Before importers or anyone else can create a CCP profile, they need to be registered with the CBSA. 

All businesses are able to register, including those based outside Canada, provided they meet two conditions. 

  • Have a Business Number (BN) provided by the Canada Revenue Agency (CRA)
  • Have an Import-Export Program Account (RM)

If you haven’t yet taken this step, that should be your first priority. 

Once that is taken care of, go ahead and begin registering your business on the CCP. When putting your business information in, it has to match everything that the CRA already has on file. Mistakes can lead to delays or disable your access to CARM’s business features. 

Let’s break it down into simple steps. 

  1. Identification: This should first be completed by the entity assigned to be the BAM. They will register a name and an email. The next steps will be used to complete the setup as a BAM or by individual employees within the business. 
  2. Initial Access: A business or individual has two sign-in options, through a Sign-in Partner or with a GCKey user ID assigned by the government of Canada. A previously issued GCKey can be used, or you can request one during sign in. 
  3. Multi-Factor Authentication: Users must agree to MFA conditions for privacy. Only emails are being used to send the needed passwords for login. 
  4. Passcode Confirmation and Terms Acceptance: Users will have to verify their email and accept the terms of using the CCP portal. This is also to ensure MFA security protocols are set up. 
  5. Creation of Personal Profile: Business and individuals go through this step. Settings can be personalized and then used to create a business account or request access to an existing business. 

Once done, a number of other important tasks can be taken care of:  

  • Business registration
  • Delegation of Authority for employees
  • Update/validate duty transaction history
  • Set up Statements of Accounts (SOAs)

From that point on, it’s a matter of becoming familiar with the platform and its features. In fact, you really don’t have much choice in the matter. Even if you are planning to import products into Canada using a customs broker, the agreements between you and them must be done through the CARM portal.

How Does CARM Affect Importers?

CARM was designed to streamline the import process by having a centralized system. Part of the streamlining process involves shifting more responsibility to the importer. 

Certain tasks, like the posting of customs bonds (known in Canada as a financial security agreement) must be handled directly by the importer, rather than an outside service.

Changes to the Release Prior to Payment Program (RPP)

Before CARM was fully implemented, it was common for importers to have a 3rd party, such as a customs broker, use their credentials on behalf of the importer and secure clearance of goods before a full accounting of duties was completed. 

This is known as the Release Prior to Payment (RPP) program and was set up for businesses to post financial securities that show they have the calculated duties for a shipment covered. 

The good news is that the program isn’t going away. However, it does mean that an importer can’t use a customs broker’s RPP credentials anymore. They must establish their own.

Without a customs broker, importers will now have to complete the following tasks independently:

  • Calculating their customs bond/financial security amounts
  • Posting the security to the CARM Client Portal
  • Making cash deposits in lieu of posting security

Thankfully, the CBSA does provide help in this area. Within the CARM system there are tutorials, guides, and customer support services. Whether it’s understanding a regulation or navigating a complex procedure, new and experienced importers can benefit.

While it is a little extra work, it also allows for improved visibility of trade finances and other benefits that we’ll get into next.

CARM Client Portal Benefits

Having everything related to your imports in one program makes more than just your finances visible. In many ways, it’s also a safety net to help you avoid miscalculating fees based on various trade agreements and regulations. 

Import businesses can look forward to the following benefits:

  • Commercial accounting declarations (CAD) guarantee accurate calculations of duties, taxes, and fees based on current regulations, trade agreements, and specific characteristics of the goods. 
  • Electronic commercial accounting (ECA) is used for timely collection by setting up regular billing cycles to reduce the risk of penalties and interest charges.
  • Easy access to account history, also through ECA, allows participants to access transaction history, outstanding balances, and charge details to better manage financial expectations. 
  • Integration with other financial systems allows for automated payments, reconciliations, and reporting to the banking systems used by your company.
  • Simplified dispute resolution through a structured process where importers can raise concerns, provide evidence, and speak with relevant authorities.
  • Real-time visibility of all current transactions ensures that mistakes are detected and dealt with early on in the financial process.

In short, CARM’s approach makes it easier to import commercial goods. The simpler the system, the easier it is to avoid various fines and penalties. 

A table indicate the Common Penalties Issued by the CBSA per number of offenses. The first penalty is 'failure to maintain electronic records in a readable format'. The first offense is $150, the second in $225, and subsequent offenses are $450. The next penalty is 'conducting business as an unlicensed broker'. The first fine is $500, the second is $750, and subsequent offenses are $1,500. The next penalty is 'Failure to report imported goods in writing to a customs office'. The first fine is $2,000, the second is $4,000, and subsequent offenses are $8,000. The last penalty is 'Failure to keep records at a specified location during a set time'. The first fine is $300, the second is $450, and subsequent offenses are $900. The value is in Canadian dollars.

*Value in Canadian Dollars (CAD) / Source: CBSA master Penalty Document

Penalties like the ones listed here can be more easily avoided with CARM, especially for mistakes like keeping records in the wrong place. Thanks to the CCP, everything is already where it’s supposed to be.

Between the technology and a user-centric design, it’s a comprehensive solution for importers.

Who Has Access to the CARM Portal?

Of course, it’s not just importers who have access to CARM. Canada wants to make importing easier, not put brokers out of a job. 

The CARM portal, and its various features, are set up to be used by the following entities:

  • Importers
  • Customs Brokers
  • Customs bonded warehouse licensees
  • Trade consultants
  • Financial security partners
  • Trade chain partners

Importers can still use the services of a customs broker by officially delegating certain responsibilities to them. This must be done through the importer’s account in the CCP.

Small businesses that may only import a few times a year or less can officially delegate various services to their preferred brokerage firm. 

For businesses that import heavily regulated items, having a professional broker (as well as related consultants and trade partners) involved is a matter of necessity. 

Another great benefit of CARM then, is ensuring that all official communication between these parties happens in a single space. No one makes a move without the other realizing it and missed communications among all involved are greatly reduced.

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Prepare for Canadian Trade With USA Customs Clearance

The CARM system is bringing significant change to Canada’s import process, but also several new advantages. From simplifying importing processes to managing financial security, it’s a necessary tool that anyone looking to do business with Canada needs to master.  

USA Customs Clearance is here to help. With brokers licensed to operate within Canada, we can serve as a designated delegate within CARM.  

Whether you’re operating in Canada as an importer, or serve as a U.S. supplier for export, USA Customs Clearance is here to help. 
Call us today at (855) 912-0406 to see how or send us a specific inquiry for services online.

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