Navigating CARM Compliance: A Step-by-Step Guide for Businesses

The Canada Border Services Agency (CBSA) is introducing the CBSA Assessment and Revenue Management (CARM) program, a significant regulatory change affecting all businesses involved in importing goods into Canada. CARM will fully launch in October 2024, making it mandatory for importers to manage their customs processes through the new CARM Client Portal (CCP). Failure to comply could lead to customs clearance delays, impacting your supply chain.

What is CARM?

CARM is a modernized digital platform designed to streamline the management of duties and taxes on imported goods. The platform will enable businesses to manage their import activities, including assessing duties, submitting payments, and interacting with customs brokers like DHL Express. By transitioning to this centralized system, CBSA aims to enhance efficiency, compliance, and transparency in the importation process.

Key Requirements for Businesses:

1. Registering on the CARM Client Portal (CCP)
   • Account Creation: Businesses must register on the CARM Client Portal by either using a GCKey (a unique government credential) or through a Sign-In Partner (such as your bank login). Multi-factor authentication is required for secure access.
   • Business Registration: After creating an account, you need to register your business by providing your business number (BN), legal entity name, address, and answering two out of three affinity questions related to past import transactions. These questions might include details on past duties and taxes paid, payment amounts, or statement of account balances.
2. Granting Delegation of Authority
   • Customs Broker Authorization: To facilitate smooth customs clearance, importers must delegate authority to their customs brokers, such as DHL Express, via the CCP. This involves reviewing and approving third-party requests from your broker on the CCP dashboard. You can control the level of access your broker has by setting visibility rules that define what information they can view or edit. Failure to delegate authority correctly could result in delays or issues with customs clearance.

Understanding Import Duties

Import duties are taxes levied on goods brought into Canada. The amount of duty owed depends on several factors, including the type of goods, their value, and their country of origin. Duties are calculated based on the Harmonized System (HS) code, which classifies the goods for tariff purposes.

To determine how much duty you owe:

• Step 1: Identify the HS code for your goods using the CBSA’s Tariff Classification page.
• Step 2: Determine the value for duty, which includes the cost of the goods, shipping, and insurance.
• Step 3: Apply the correct duty rate based on the HS code and calculate the total duties using the Duties and Taxes Estimator.

The Importance of Compliance

With the CARM system becoming mandatory in October 2024, businesses that fail to register and complete the necessary steps, including granting the Delegation of Authority, risk facing significant delays in customs clearance. These delays could prevent the timely release and delivery of goods, potentially disrupting business operations and supply chains.

Step-by-Step Instructions

For those needing guidance on registering and delegating authority in the CARM Client Portal, follow these detailed steps provided in the attached instructions:

1. Creating an Account:
   • Access the CARM Client Portal and log in using either GCKey or Sign-In Partner.
   • Complete multi-factor authentication for secure access.
2. Registering Your Business:
   • Enter your business number, legal entity name, and physical or mailing address.
   • Answer the required affinity questions based on previous import transactions.
3. Delegating Authority to DHL Express:
   • From the CCP dashboard, navigate to “Manage pending third-party requests.”
   • Review and approve DHL Express’s request, setting appropriate visibility rules and an expiry date for the business relationship.

Conclusion

Preparing for the CARM rollout is essential for all importers in Canada. By registering on the CARM Client Portal, understanding your import duties, and ensuring that your customs broker has the necessary authority, you can avoid costly delays and ensure your business remains compliant with the new regulations.

Resources:

• CARM Client Portal
• CBSA Tariff Classification
• Duties and Taxes Estimator

By following these steps and staying informed, you can smoothly transition to the new CARM system and continue importing goods without disruption.

This information is for discussion purposes only and should not be considered professional advice. There is no guarantee or warrant of information on this site and it should be noted that rules and laws change regularly. You should consult a professional before considering implementing or taking any action based on information on this site. Call our team for a consultation before taking any action. ©2024 Shajani CPA.

Shajani CPA is a CPA Calgary, Edmonton and Red Deer firm and provides Accountant, Bookkeeping, Tax Advice and Tax Planning service.

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