The Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) system is a critical component of Canada’s import regulations. Designed to streamline the import process, CARM aims to improve compliance and enhance the overall efficiency of trade-related transactions.
For importers, understanding CARM regulations is essential as they impact various aspects of business operations, including duties, taxes, and advance rulings. By familiarizing themselves with the CARM system, importers can better navigate the complexities of importing into Canada, ensuring a smoother and more efficient process.
The CARM regulations apply to all imports and, therefore, will impact all Canadian importers and customs brokers, as well as US exporters to Canada, regardless of the size or scale of their business. The intent is to simplify the import process and provide a user-friendly Single Window system for importers, besides optimizing how CBSA assesses and collects duties and taxes.
The third phase of the CBSA’s CARM initiative was released in October 2024. Some of the major requirements include:
· Obtaining a Canadian Business Number and Import-Export program account (RM)
· Creating a CARM Client Portal (CCP) Business Account
· Authorizing customs brokers to handle their imports
· Posting financial security to obtain Release Prior to Payment (RPP)
In this process, customers face various hurdles, right from registration to setting up their financial security or bonding requirements. While approaching the CARM Help Desk for support is common, working with customs clearance providers like KlearNow.AI can come in handy.
Understanding CARM Regulations
The CARM system comprises several key components that importers must be familiar with to ensure compliance and avoid potential issues. These include:
- Advance Ruling (Tariff Classification and Origin) Program: This program provides binding rulings on tariff classification and origin, helping importers determine the correct classification and origin of their goods. By obtaining an advance ruling, importers can ensure they are applying the correct tariff codes, which aids in accurate duty assessments and compliance with Canadian regulations.
- National Customs Ruling Program: Unlike the advance ruling program, the national customs ruling program offers non-binding rulings on tariff classification and origin. While these rulings are not legally binding, they provide valuable guidance to importers on the classification and origin of their goods, helping them make informed decisions and avoid potential issues.
- Duties and Taxes: The CARM system is used to assess and collect duties and taxes on imported commercial goods. Importers must understand their obligations regarding duties and taxes to avoid any penalties or delays. By staying informed about the duties and taxes applicable to their imports, businesses can ensure compliance and avoid unexpected costs.
What are CARM APIs?
To facilitate seamless integration with existing business systems, the CARM API offers several useful functionalities, such as:
Commercial Accounting Declarations (CADs): The API enables the electronic submission of CADs, streamlining the post-release accounting process for imported goods.
Duty and Tax Calculations: It provides functionalities to calculate duties and taxes accurately, ensuring compliance with Canadian regulations.
Tariff Code Classification: The API assists in classifying goods under the correct tariff codes, aiding in precise duty assessments.
KlearNow.AI has integrated these APIs on its customs clearance platforms, to streamline the clearance process and make it smoother and faster.
Embedding these APIs helps automate submissions, reduce errors, and accelerate customs clearance. With data flowing directly from the client systems, errors are minimized and delays avoided, helping importers be customs compliant.
Ensuring Data Accuracy
With Intelligent Document Processing (IDP) capabilities, KlearNow’s platforms can process information and auto-populate documents accurately and swiftly.
As part of client onboarding, KlearNow.AI sets up a product library, wherein all relevant information about the commodity is stored. Thereafter, as each shipment is handled, IDP is used to extract information from the documents, which can then be reviewed and compared with the product library to help ensure it aligns with predefined parameters.
Multiple checkpoints exist throughout the process to validate the data. Ensuring data accuracy also involves obtaining the applicant’s consent for the use of their information in various customs processes.
For example, if an invalid HS code is detected, the system alerts the customs broker, so they can rectify the gap before filing the customs entry with the CBSA.
This multi-layered approach helps maintain data integrity, while the reduction in manual effort enables the customs broker to focus on compliance.
Surety Bonds for Non-Resident Importers
While KlearNow.AI doesn’t obtain surety bonds for non-resident importers, it has an experienced partner to whom customers are referred, for professional guidance on surety bonds. Compliance with CARM regulations often involves adhering to the guidelines provided in ruling letters, which offer clarity on tariff classifications and origins.
Mitigate Risks of Non-Compliance
Once the existing grace period for the Release Prior to Payment (RPP) program expires, from April 2025 onwards, surety bonds will be mandatory before goods can be imported.
In today’s interconnected world, compliance with CARM regulations is crucial for maintaining smooth international trade operations. CBSA has also provided a grace period of approximately 60 days for CARM registration, during which time importers need to grant customs brokers access to their CARM portal, so the broker can complete relevant formalities. Once the grace period is over, failing to file the Commercial Accounting Document (CAD) on time will attract a penalty of $100/ shipment.
We recommend that importers negate these risks by:
- Obtaining a Surety Bond before the deadline
- Grant customs broker access to the CARM portal
Tips for US Exporters
The process remains the same for American exporters, except for issues related to payment options, as CARM only accepts payments in Canadian dollars and works with two banks.
American exporters can reach out to KlearNow.AI, and our team of experts will assist in finding a viable solution.
Overall Impact of CARM Client Portal
While the implementation of CARM has compelled importers and customs brokers to adapt to the new regulations, the initiative is advantageous for users in several ways.
Some advantages include importers being able to view CAD documents and directly accessing their statement of accounts with CBSA, besides which they can also rectify errors within the portal itself.
Overall, this makes it easier and more efficient for importers to manage their documentation.
How KlearNow Can Ease Compliance With CARM Regulations
Apart from being a leading vendor of customs clearance software in the US and Canada, KlearNow.AI is licensed to customs clear in the US and Canada with considerable expertise in customs processes.
KlearNow.AI is focused on helping importers and customs brokers navigate the transition to CARM. In addition to the technological aspect, KlearNow aims to be a trusted advisor and long-term partner to importers looking for guidance.
Our platforms are scalable and useful for businesses of all sizes — whether small importers unfamiliar with digital customs systems or large enterprises seeking to streamline operations, reduce errors, and enhance compliance.
KlearNow’s robust reporting capabilities complement the enhanced visibility provided by the CARM portal, by delivering advanced analytics. Platforms such as KlearEngine and KlearCustoms permit importers to analyze data at the most granular level possible, providing detailed operational insights and facilitating better decision-making.
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