New Canadian Customs System Could Cause Trade Problems

The expeditious launch of a new customs system in May could spell trouble for Canadian trade, warn brokers and forwarders.

In May, the Canada Border Services Agency (CBSA) is gearing up to introduce the CBSA Assessment and Revenue Management (CARM) system. This system will take over as the primary record-keeping tool for Canada's customs accounting and revenue management processes for imports. The plan entails deactivating the current systems and transitioning directly to the new system on May 13.

Trade groups are expressing concerns about the rapid pace of this transition.

Speedy switch sparks concerns for Canadian trade

According to the National Customs Brokers & Forwarders Association of America (NCBFAA), brokers in the US, Canada and Mexico are urging Canada to rethink its current approach in favor of a phased one — partly because they believe Canadian government and traders aren't prepared for the switch, and partly due to "deficiencies" in the new system that have yet to be resolved.

“CBSA has indicated that these [issues] will not be remedied before CARM [can] go-live in May 2024,” the North American Customs Brokers Alliance said in a March 15 letter provided to NCBFAA. “The system is not sufficiently functional to become the sole system of record for customs accounting and revenue management at this time.”

Additionally, they cite "low levels of importer registration" and "lack of clarity" around the financial security implications as barriers to successful implementation.

The groups cautioned against deploying a customs management system before it is fully ready, recounting how Mexican customs brokers recently faced a "country-wide outage," resulting in a complete border disruption and a 24-hour halt in freight clearance. This disruption led to revenue loss for businesses, particularly in perishables.

To avoid these issues, the NCBFAA recommended that CBSA adopt a "phased approach" for the deployment of the new CARM system. A phased-in strategy was successfully used in the U.S. when the CBP implemented ACE, resulting in fewer trade disruptions during that transition period. 

As it stands, CBSA is still planning for the launch on May 13.  We will be monitoring this situation for further updates. 

How can I prepare?

In the meantime, if you ship to or through Canada, now is the time to begin planning your transition to the new system before the potential go live date of May 13. The first thing you should do is contact your broker.

"Talk to your brokers and ask what steps they are taking to prepare themselves for the change," said Shannon Dillinger, Vice President, Trade Compliance at UWL.

"We recommend having an audit process in place for your entries to be sure you are paying the correct amount of duties and taxes when the new system goes live," Dillinger advised. "That way, any discrepancies can be addressed timely."

Being proactive and preparing for the change can help you minimize disruptions to your business.

If you have any questions or concerns related to this announcement, please contact your UWL Representative or get in touch with us via the button below.