March 29, 2021 | Industry Insights, Surety Bonds
Are You CARM Ready?
What Is CARM?
CARM is a multi-year initiative implemented by Canada Border Services Agency (CBSA). CARM stands for CBSA Assessment and Revenue Management and is intended to modernize and streamline the process of imports into Canada.
Under CARM, importers will need to secure and post their own import bond in order to participate in the Release Prior to Payment Privilege (RPP). This is a significant change that impacts importers and customs brokers. Prior to CARM, customs brokers were allowed to extend use of their own customs bond to any importer.
CARM Customs Bond Requirement Details
CARM Phase 0 went into effect in January of 2021. Release 1 is scheduled to launch Spring 2021 and Release 2 in the Spring of 2022.
As of Release 2, an importer must post security using one of the following two options to be eligible for RPP:
- A surety bond for 50% of their highest monthly accounts receivable with a minimum bond of $25,000
- – OR – a cash security for 100% of their highest monthly accounts receivable
The RPP Bond will allow the importer to:
- Obtain the release of goods from the CBSA before paying duties and taxes
- Defer accounting for goods
- Defer payment of duties and taxes (including GST)
What Can You Do To Be CARM Ready?
Although CARM Release 2 is scheduled for Spring of 2022, customs brokers and their import clients should begin discussions now with their surety bond provider.
We recommend that brokers take the following steps now to prepare:
- Confirm accurate information (importer address, business number)
- Review all importer clients to determine bond amount
- For bonds greater than $25,000 – underwriting may be required and should be sent to Roanoke or your surety partner for review
- Work out a schedule to ensure an orderly process to obtain bonds for your clients
- Visit CBSA’s website to learn more about CARM. CBSA provides information specific to importers, customs brokers, trade consultants, surety companies and other trade partners in an effort to assist all parties in preparing for Release 1 and 2.
Roanoke and their surety partners are already working closely with CBSA on the business requirements they need to enhance their online customs bond issuance system FastBond™ for the upcoming bond changes. Once these negotiations are finalized, the digital platform will be updated to provide a convenient and fully compliant application for customs brokers.
While the bond is not required immediately, Canadian importers may choose to obtain it prior to Release 2. To speak to one our representatives about CARM Customs bonds for your clients, please provide us your contact information using the link below. Or, you can email us at email@example.com.
Sources: Canada Border Services Agency, PCB Customs Brokers
December 23, 2021No ATA Carnets to Brazil in the New Year
December 02, 2021Fraud and Cyber Crime – Emerging Cargo Theft Trends
November 10, 2021Roanoke Insurance Group Launches New Website!