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What should importers expect with CARM R2 and the CN24-14 blackout period announcement?

What should importers expect with CARM R2 and the CN24-14 blackout period announcement?

Synopsis
5 Minute Read

Businesses that import goods into Canada need to be aware of the upcoming changes at the Canada Border Services Agency (CBSA), including:

  • Release 2 of CBSA Assessment and Revenue Management (CARM R2)
  • The anticipated blackout period announced in Customs Notice 24-14 (CN24-14)

Update: On April 19, 2024, the CBSA announced that the launch of CARM R2 for importers and other TCPs will be rescheduled to October 2024. The previously announced blackout period scheduled for April 26 to May 13 will not occur as planned. The CBSA is maintaining the legacy environment for accounting and payment, and current state processes will remain in effect.

On May 13, 2024, the Canada Border Services Agency (CBSA) Assessment and Revenue Management (CARM) system will become the official system of record for import duties and taxes.

However, the CBSA announced the anticipated blackout period for customs accounting systems in its Customs Notice 24-14 (CN24-14) on April 4, 2024. This anticipated blackout period will begin on April 26, 2024, at 4:00 p.m. EDT and end on May 13, 2024, at 3:00 a.m. EDT.

The announced blackouts also result in a new effective deadline of April 26, 2024, for importers to comply with the requirement to be registered in CARM. Failure to register by this date can result in costly border delays for shipments. It can also result in a loss of the 180-day grace period for meeting the new Release Prior to Payment (RPP) security deposit requirement — which also comes into effect on May 13, 2024.

Background

Release 2 of CARM (CARM R2) is set to be a truly transformative moment. It will see importers and other trade chain partners (TCPs) such as trade consultants, accountants, and customs brokers increasingly conduct customs business with the CBSA in a digital space.

Importers may be familiar with the U.S. Customs and Border Protection’s implementation of the mandatory use of the Automated Commercial Environment (ACE) by importers in 2017. CARM R2 merely scratches the surface of what can be accomplished by both customs authorities and importers with the evolution of customs business in a digital space. 

The CARM Client Portal (CCP) was launched in May 2021 (Release 1) and is currently available to importers and TCPs. All commercial importers (non-residents and Canadians) importing product into Canada will need to be set up on the CCP.

CN24-14 blackout period

Prior to May 13, 2024, the CBSA’s existing systems will go offline at 4:00 p.m. EDT on April 26, 2024. Importers who have not registered in the CCP by April 26, 2024, may experience the following temporary effects:

  • Inability to clear goods through customs — Shipments could be held at the border or require costly alternative clearance processes (paper Form B3 submissions, in-person interventions by customs brokers, etc.).
  • Inability to create new importer accounts — It will not be possible to create a new RM account with the Canada Revenue Agency (CRA) or CBSA systems between May 10 and May 13, 2024. The CRA will no longer register import accounts as of May 10, 2024, at 7:00 p.m. EDT. New requests must be made in CARM starting on May 13, 2024, at 3:00 a.m. EDT.

Importers, both those registered and not registered in CARM by this time, are also advised that no electronic customs accounting filings will be possible during the blackout period. While shipments will continue to be electronically released throughout the period, it will only be possible to account for such shipments electronically from May 13, 2024, onwards.

The CBSA is not expected to entertain an increase in paper accounting submissions barring exceptional circumstances. However, it is expected to limit or waive any late accounting consequences for importers accounting up to two weeks late due to the blackout.

Customs business process changes

Once registered, the CCP will be a resource to track all your shipments, payments, and other useful information. Importers will also need to consider and grant varying levels of CCP access to relevant employees and TCPs to be fully operational in CARM.

CARM R2 will introduce the following changes:

  • Electronic management of virtually all customs business — Customs accounting, scenario planning (e.g., using the duties and taxes calculator), making payments on the CCP, ruling requests, and post-importation corrections and refunds, will all be part of CARM. Trade verifications will be conducted via documents communicated to and from the importer via the CCP, and applications for various special programs (such as the Duty Relief Program) will also be filed in the CCP.
  • Electronic commercial accounting declarations (CAD) — A new commercial accounting declaration will replace the current B3 (customs coding) and B2 (request for adjustment) processes.
  • New harmonized monthly billing cycles — The CARM R2 Statement of Account period starts on the 18th of the previous month and ends on the 17th of the month. The account must be settled within 10 weekdays (with no deferral due to holidays) of the statement date.
  • Changes to the RPP program — Commercial importers are required to post their own security bond. Previously, goods released prior to payment of duties and taxes were normally secured by the customs broker’s bond.

CARM does not impact exporters and export transactions, which are managed through the NEXCOL system. It is also expected to provide full continuity for interdependencies with the functioning of import/export licensing and permitting systems such as MyCFIA and NEICS.

Accessing the CCP

A business number and an import account are required to create a user account in the CCP. Each user will need to set up a GC Key or use the online Sign-In Partner.

Existing importers with a history of import transactions need to be prepared to answer affinity questions respecting their past transactions, payments, and statements of account in order to complete.

Contact us

Speak to an MNP Indirect Tax advisor for more information.

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