The third and final phase of the Canada Border Services Agency’s (“CBSA”) Assessment and Revenue Management (“CARM”) project (i.e., “CARM R2”) now has a clear target date for release – October 2023! The exact implementation date will depend on when draft regulations, released on November 26, 2022, will be finalized. Importers, brokers, freight-forwarders, and anyone else interested in CARM has until January 10, 2023 to provide feedback on the regulations!

The draft regulations will tweak existing regulations to bring them in-line with how the CBSA envisages CARM applying in practice. Hopefully, this will take Canadian customs into the digital age more smoothly than some other recent Federal IT projects!

Background

CARM has been a long time coming, with origins going back to 2014. The program is primarily meant to address administrative burdens on CBSA, resulting from a heavily paper-based system and increased volumes of cross-border shipments.

CARM will allow trade chain partners (“TCPs” – CBSA’s catch-all term for parties involved in customs transactions) to communicate with CBSA electronically, including submitting documents, receiving account and transaction history, requesting rulings, and responding to CBSA inquiries. It will also allow for payments and security to be provided through the online self-service CARM Client Portal (“CCP”).

The first two phases of CARM were released in 2021 and provided a limited version of the CCP for importers and customs brokers. CARM R2 will expand CARM to all TCPs, as well as making broader changes (discussed in more detail below).

Broker’s Security Not Enough!

At the front-end, perhaps the single most important change coming with CARM R2 is that importers will no longer be able to use their customs broker’s security to clear shipments before paying duties or taxes – instead, importers will have to post their own security!

Billing and Payment Changes

Another big change coming in CARM R2 is the change to billing periods. A billing period will now run from the 18^th of a month until the 17^th of the next month. Courier low value shipments (“CLVS”) and continuous transmission commodities (“CTC”, such oil and gas sent by pipeline) will remain on the current billing period – which runs from the first day to the last day of the month – while customs self-assessment (“CSA”) program participants will be able to choose between the two billing periods.

However, despite the change to billing cycles, all TCPs have the same payment due date. Statements of accounts will be released on the 25^th of the month, and all TCPs need to make payment by 10 weekdays after the 17^th of the same month in which the statement of account is issued.

On-the-Fly Corrections

Crucially, CARM R2 will also impact how corrections are made. TCPs will now be able to make penalty-free corrections to Commercial Accounting Declarations (“CADs”) from the time of submission up to the payment due date without having to submit adjustment requests.

Other Regulatory Changes

Lastly, as part of implementing CARM R2, several existing regulations are being updated to allow information and documentation to be submitted to the CBSA more generally – rather than the current requirements, which sometimes require documentation to be submitted to a specific person at a specific place (e.g., at the customs office physically closest to the port of entry).

Commentary

October 2023 will be here faster than you know it – if you have questions about how the transition might impact you and your business, now is the time to think about pro-active legal guidance!

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