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What is CARM? Canada’s International Trade Revolutionized

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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
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Last Modified: September 27, 2023

What is CARM? It’s an ongoing project that streamlines processes, enhances efficiency, and ensures compliance with Canadian import regulations. Its implications extend to areas such as importing commercial goods, post-financial security, electronic payment options, and accounts receivable ledgers.

The Canada Border Services Agency (CBSA) Accounting and Revenue Management project, referred to as CARM is meant to modernize the nation’s handling of import services. Using the CARM client portal, things like commercial accounting declaration and revenue management are now streamlined. Working within CARM is now required for trade with Canada.  

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Overview: What is CARM?

The CBSA Accounting and Revenue Management (CARM) project is Canada’s multi-year plan to improve and facilitate trade, ensuring efficiency and compliance.  

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

  • Release 0: January 2021
  • Release 1: May 2021
  • Release 2: October 2023

Importers can make the transition to this system easier by learning how it works and what it will mean for international trade with Canada. 

The CARM project is mandatory for anyone in international trade who wants to import goods into Canada. Meeting the requirements ahead of the release will ensure business can continue without interruptions.

Understanding CARM as an Importer

CARM is more than just a technological solution; it’s an integrated approach to trade that has far-reaching implications.

It is a sophisticated system that not only handles the financial aspects of trade but also serves as a comprehensive platform for various trade-related activities.

Importers can benefit from a wide range of features meant to streamline the trade process. 

For more information on this import process, check out our article on “Import Costs From Canada”.

Bridge Between Trade Partners

CARM acts as a bridge between various trade chain partners involved in the import process. 

This includes:

  • Importers
  • Exporters
  • Brokers
  • The Canada Revenue Agency (CRA)
  • CBSA

It enables seamless collaboration and information exchange. In turn, this promotes transparency and efficiency across the entire trade chain.

Managing Border Services

Border services are an integral part of international trade, and CARM plays a pivotal role in their management. 

CARM provides a unified platform for things such as:

  • Customs declarations
  • Inspections
  • Compliance checks. 

In doing so, it speeds up the clearance process and ensures adherence to regulations.

Importing into Canada? Get help from a Canadian Customs Broker!

Simplified Financial Transactions

Financial transactions in international trade involve multiple parties, currencies, and regulations. CARM simplifies this by offering a unified platform for invoicing, payments, and reconciliations

It ensures that all transactions are conducted transparently and efficiently, minimizing errors and delays.

Integrated Technologies

One of CARM’s standout features is its adoption of the latest  technologies. Features such as electronic commercial accounting (ECA) make completing deals easier than ever.

CARM is able to digitize documents and automate workflows. This reduces manual effort, minimizes mistakes, and accelerates processing times. 

These technological innovations align Canadian trade practices with global standards, paving the way for more accessible and reliable trading experiences.

Accessibility and Reliability

By simplifying complex procedures and providing a centralized platform, CARM makes trade more accessible to businesses of all sizes. Established and new importers and small businesses benefit from CARM’s tools and resources. 

Its reliability stems from robust security measures, real-time tracking, and dedicated support, ensuring that users can trust the system with their sensitive trade information.

Getting Started With the CARM Client Portal

To benefit from CARM as an importer, you first need to understand the CARM client portal (CCP). The CCP is the online platform where importers and business partners can access all the features CARM has to offer. 

Before anyone can register, their business must be registered with the CBSA. Whether as an importer, customs broker, or other trade partner, this is necessary to have direct access to the portal’s full features. 

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

  1. Business account manager
  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. 

This will be especially important for duty payment, since direct payments to customs brokers are going to be discontinued. All payments will have to take place through the CCP. 

CARM Client Portal Onboarding Process

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

This initial registration provides the tools necessary to complete the full CCP onboarding process. Let’s break it down into simple steps. 

  1. 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. 
  2. Multi-Factor Authentication: Users must agree to MFA conditions for privacy. It also works to keep your important information secure. Only emails are being used to send the needed passwords for login. 
  3. 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. 
  4. 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. Like any new system, CARM is going through stages. Not all features are going to be available at the moment. 

The next update, taking place in October 2023, is likely to allow access to much more comprehensive features. Be warned, there may be some growing pain that come along with the new update. 

The CBSA has considered providing a practice environment, or CARM Experience Simulation. While nothing official has been shared, anyone interested can keep an eye out for updates through the online CARM bulletin

Registering Your Business Through CARM

All businesses are able to register with CARM, 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)

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. 

Be sure to set up notifications to stay informed of feature updates to the portal as well as news from the CBSA. 

We’ll now take a closer look at some soon to be available features and how they may work.

What is CARM? Container ships pulling into a port in Canada.

Exploring CARM: A Comprehensive Look at Its Features

CARM’s features encompass a wide array of tools that make trade within Canada easier than ever. This section explores these components, explaining how they work together to create a seamless trade experience.

Commercial Accounting Declarations (CAD)

Commercial accounting declarations (CAD) form the backbone of trade, outlining the goods, quantities, and values involved in transactions. 

They serve several vital purposes:

  • Compliance with Regulations
  • Determining Tariffs
  • Revenue Collection
  • Efficient Processing

Using CAD not only minimizes risk, but also speeds up the overall process. This means goods clear customs faster and cross border trade is simplified. 

Electronic Commercial Accounting (ECA)

Electronic commercial accounting is a key feature of CARM that revolutionizes how trade transactions are processed. 

By moving to an electronic system, importers benefit from: 

  • Digitization: Converting paper documents into digital formats streamlines the workflow, making information more accessible.
  • Automation: Less manual effort minimizes human errors, and speeds up processing times.
  • Alignment with Global Standards: By adopting modern technologies, CARM makes it easier for Canadian trade practices to be in line with international standards.
  • Real-time Tracking: Electronic commercial accounting allows for real-time tracking of transactions, providing transparency and control over the trade process.

As CARM continues to expand, these digital systems will include even more features and user-friendly services. 

Trade Chain Partners and Business Account Managers

The collaboration between trade chain partners and the role of the business account manager are pivotal in CARM. It takes many parties working together to bring about successful trade. 

CARM makes his easier by bringing the two together: 

  • Trade Chain Partners: These include importers, exporters, brokers, carriers, and other entities involved in trade. Working within the CARM system, it’s easier to share information and collaborate on deals. 
  • Business Account Manager: This role oversees various accounts within the system. Individuals manage tasks like compliance checks and dispute resolutions.

CARM’s components and features are designed to modernize and simplify the complex world of trade. From commercial accounting declarations to the integration of electronic technologies and collaboration among trade partners, CARM offers a solution. 

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How CARM Works To Improve Trade Practices

CARM’s practical features extend to various aspects of trade. There are three specific areas where CARM has eased the way for importers. 

These include:

  • Importing commercial goods
  • Financial security
  • Financial management 

This section provides real-life examples and insights into how CARM improves function in each of these areas.

Importing Commercial Goods

Importing commercial goods involves a complex series of steps that require careful planning, coordination, and compliance with various regulations. 

CARM revolutionizes this process, providing a streamlined and efficient approach that benefits all parties involved. 

Here’s how CARM simplifies the process:

  • Documentation 

A centralized platform allows importers to easily upload, manage, and track all necessary documents. This includes commercial invoices, packing lists, Bill of Ladings, and customs declarations. This digital approach reduces paperwork and minimizes errors. 

  • Compliance and Regulations

CARM automates many compliance checks, identifying potential issues and providing guidance on resolving them. This proactive approach reduces legal risks and ensures that goods meet all necessary standards.

  • Efficient Handling and Clearance

The CARM portal allows for pre-arrival processing, electronic payments of duties and taxes, and real-time tracking of goods’ status. 

  • Predictable Trade Environment

By providing daily notices with real-time tracking, standardized processes, and clear guidelines, the trade process becomes predictable. This builds confidence and helps importers make informed decisions. 

  • Integration with Trade Chain Partners

As an interconnected system, it eases collaboration among trade chain partners. This means all parties have access to the same accurate, up-to-date information.

  • Support and Resources

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. 

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.

Common Penalties* Issued by the CBSA Per Number of Offenses

Penalty1st 2nd 3rd or Later 
Failure to maintain electronic records in a readable format$150$225$450
Conducting business as an unlicensed customs broker$500$750$1,500
Failure to report imported goods in writing to a customs office$2,000$4,000$8,000
Failure to keep records at a specified location during a set time$300$450$900
*Value in Canadian Dollars (CAD) / Source: CBSA master Penalty Document

Penalties like the ones listed here can be more easily avoided with CARM. With government officials and importers doing business in one place, these simple oversights can be a thing of the past. 

 Between the technology and a user-centric design, it’s a comprehensive solution to trade with Canada.

Financial Security 

CBSA Assessment and Revenue Management, another aspect of CARM, wants to help importers and brokers bring valuable business to Canada’s economy. Providing financial security to those involved in international trade is a big part of that. 

A significant part of that is the ability to have goods released even if all payments haven’t been made. This process is known as Released Prior to Payment (RPP). 

RPP is a critical component of CARM that impacts financial security.  An RPP allows importers to have their goods released before complete payment of all the duties and taxes owed.

To benefit from this aspect of CARM, importers and anyone else involved will need to enroll and post some kind of security bond with the CBSA

Participants have a few options for security to be given a program account:

Once these are in place, it’s possible to benefit from RPP and the financial security and stability it provides. 

Other forms of financial security include:

  • Guaranteeing Duties, Taxes, and Fees: It ensures that these financial obligations are accurately calculated based on the current regulations, trade agreements, and specific characteristics of the goods.
  • Timely Collection: By implementing regular billing cycles, delays and potential disputes are minimized. This also reduces the risk of penalties and interest charges
  • Safeguarding Government Revenue: There is a process for automatic calculations, information validation, and tracking. Fraud is minimized and the government gets what it’s owed. 
  • Protecting Trade Participants: Easy access to account history allows participants to access transaction history, outstanding balances, and charge details to better manage financial expectations. 
  • Integration with Other Financial Systems: By being connected with other banking platforms and accounting software, CARM allows for automated payments, reconciliations, and reporting.
  • Dispute Resolution: There is a structured process where importers can raise concerns, provide evidence, and engage in dialogue with relevant authorities.
  • Continuous Monitoring and Reporting: Real-time visibility ensures that any mistakes are detected early and addressed proactively, maintaining the integrity of the entire financial process.

In short, CARM provides financial security on multiple fronts. Its many benefits contribute to a stable and reliable trade environment, where government revenue is protected, and trade participants can conduct business with confidence. 

Financial Management CARM’s approach to financial management integrates electronic payment options and accounts receivable ledger. These two essential components ensure smooth and transparent financial transactions. 

Here’s a detailed look at how these features work together within the CARM system.

  1. Electronic Payment Options

While these are mostly the norm among modern financial systems, government systems are known to prefer the more traditional forms of payment, usually cash or check. 

CARM is taking the opposite approach and embracing e-payment options and the benefits that come with them:

  • CARM accepts credit cards, bank transfers, and electronic funds transfers (EFT), providing flexibility and convenience to trade participants.
  • Transactions in multiple currencies are accepted, which reduces conversion-related issues
  • Robust encryption and authentication measures to protect sensitive payment information made online.
  • Real-time processing reduces delays and enhances the overall efficiency of the trade process.
  • Importers and other trade participants can track their payment status, view transaction history, and generate reports, all within the CARM portal.

In short, the e-payment options are modernizing Canadian trade. Customs brokers no longer have to worry about chasing down clients for payments. Importers don’t need to track down brokers and individual invoices. 

The CCP keeps everything together and brings all parties to a single user-friendly platform. 

 By using CARM, the CBSA hopes to attract more business and make trade possible for everyone.

  1. Accounts Receivable Ledger

Being able to quickly review import and financial history through an accounts receivable ledger makes it easy to spot patterns and trends within your own import processes. 

With CARM providing such a system, importers and their trade consultants enjoy many advantages. 

  • Detailed records of all financial transactions such as payments, refunds, adjustments, and outstanding balances.
  • Transparency allows trade participants to view and verify all financial activities related to their trade transactions. 
  • Integration with Other Financial Systems Such as enterprise resource planning (ERP) and accounting software streamlines financial management. 

Record of all transactions provides clear evidence and facilitates fair resolutions when disputes over payments come up.

Detailed record-keeping supports compliance with financial regulations and facilitates auditing to make sure all financial activities are conducted properly. 

Electronic payment options and the accounts receivable ledger within CARM represent a synergy of technology, convenience, transparency, and security. It’s a system that benefits Canada as well as international parties looking to expand their import/export business. 

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Prepare for Canadian Trade With USA Customs Clearance

CARM is a complex but essential system within Canada’s commercial landscape. From simplifying importing processes to managing financial security, it’s a necessary tool that anyone looking to do business with Canada needs to master.  

The Licensed Customs Brokers with USA Customs Clearance can help you better understand CARM, how to register for an account, and how to take advantage of its many features.

Call us today at (855) 912-0406 to see how we can help, or complete a services request for customs brokerage needs online now. 

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