When CARM became the official system of record, obtaining the release of imported goods prior to accounting and payment of duties significantly changed for importers. Importers are no longer able to use their customs broker’s security to clear shipments before paying duties and taxes.
CARM requires all importers to post security with CBSA to guarantee the payment of duties and taxes before goods will be customs released (Release Prior to Payment – RPP). The Release Prior to Payment (RPP) Program allows participants to obtain the release of goods from the CBSA before the final accounting and payment of duties and taxes.
The Release Prior to Payment (RPP) 180-day transition period, which extends from October 21, 2024, to April 19, 2025, allows importers up to 180 calendar days to make their own financial security arrangements to meet the RPP program requirements.
IMPORTANT: Without the required bond, importers will be required to pay CBSA in advance for all duties/taxes prior to gaining release of imported shipments after the 180-day transition period.
All importers must post security using one of the following two options to be eligible for RPP:
- Option 1:a financial security instrument for 50% of their highest monthly accounts receivable (inclusive of GST) with a minimum financial security of $5,000 per import program (RM)
- Option 2:cash security deposit for 100% of their highest monthly accounts receivable (inclusive of GST)
Recommendation – obtain a bond for a higher amount than required to avoid costly revisions
Frequently asked questions from CBSA:
What happens if an importer fails to post financial security before the end of the transition period?
If financial security is not provided within the 180-day transition period, the trade chain partner will be removed from the RPP program (at day 181).
Will CARM calculate the financial security requirement?
The CARM system will automatically calculate the financial security requirement an importer must post, based on the last 12 months of historical payments to the CBSA at the time of enrolment. An importer that posts the system calculated amount will be automatically accepted. However, if the importer submits a security amount that is lower than what is recommended by the system, a case would be generated for officer review. It would be at that time that the importer would provide clarification for the posting of a lower amount (i.e. lower account receivable expected going forward). Upon officer approval, the amount would be accepted, and system monitoring would begin.
In the CARM Client Portal, the importer will land automatically on their Financial Security Dashboard. They will then know the amount of financial security they have to post by looking at the Security Requirement field.
How will financial Security be monitored, and when will the nudging begin?
The CARM system uses a nudging framework to encourage real-time compliance with financial security requirements. The nudging framework is used for RPP importers only. When an RPP importer’s financial security utilization is approaching (for example, greater than 75%) or over capacity (greater than 100%), the CARM system will nudge the importer to either increase the financial security posted or post-payment to reduce the account balance.
During the current 180-day RPP transition period, these ‘nudges’ or financial security notifications are for information purposes only, reminding importers to post the applicable financial security before the end of the 180-day transition period to continue benefiting from the RPP privilege.
To determine your security requirements, log into the CARM Portal and select “Financial Security” (note, only you can see these screens in CARM; your service providers cannot):
You will then see the following screen advising your current security details. If your Total Security Required exceeds your Current Security Coverage, then an increase to your RPP Bond is required:
With over 250,000 importers requiring bonds, surety companies will be faced with an influx of bond requests within a relatively short period of time – to avoid being caught without a bond after the transition period, we recommend obtaining the required bond now.
Universal has secured very competitive RPP Bond rates with our Surety. To take advantage of these rates please feel free to contact your Client Care representative or Mark Glionna, Vice President—Client Relations & Business Development.
