CARM Bonds & RPP Surety Bonds
What is a Canada customs surety bond or financial security?
Surety bonds, or financial securities, are a type of guarantee that acts like a credit extension, in which a surety provider agrees to take on future liabilities in the form of a bond, in exchange for a business paying them a policy premium. A customs surety bond guarantees the Canada Broker Services Agency (CBSA) receives payment on importing fees and duties when commercial goods enter the country.
What is a Release Prior to Payment (RPP) bond?
A release prior to payment bond is a type of surety bond (also known as a customs bond) required by importers to ensure the CBSA is paid any duties or import taxes owed. Essentially, an RPP bond is a form of low-cost surety insurance that allows importers to protect their operations while remaining compliant with the current Customs and Transportation Act and CARM. This is now known as a financial security by CARM.
CARM and The Importance of Release Prior to Payment (RPP Bonds/Financial Securities)
In recent years, the CBSA has been working on implementing a multi-year initiative that was designed to improve the process of importing and redefine its interaction with importers (resident and non-residents). Under the CBSA Assessment and Revenue Management (CARM) project, importers will be required to post their own security bonds/financial securities or cash to maintain their RPP privileges.
Why is CBSA implementing new CARM requirements?
CBSA has implemented CARM to help modernize and make the importation of goods more efficient. With the new CARM Client Portal, self service is now an option for importers who will be able to digitally manage their own accounts, delegate authority/access, register for a business number, make payments and so much more.
How do the new CARM requirements impact individual importers?
The new CARM system is intended to act as the immediate bridge between CBSA and you as the Importer on Record (IOR).
To support this initiative, CBSA has facilitated the creation of a new CARM Client portal.
All clients must have an account in the CARM Client Portal, link a user to their business account and delegate authority respectively. (TIP: the first individual who links their account to the business becomes the Business Account Manager or ‘BAM’). Getting aligned with CARM now will help you avoid interruptions and delays later.
The biggest change for importers is that they are required to obtain a bond (or post cash) for their own duties/GST rather than use their Broker’s Bond. Importers will be required to pay their own duties/GST to CBSA each month by going into the CARM Portal, downloading their statement and arranging for payment.
Next Steps for Importers | How to Meet New CARM Requirements
- Sign-up with the new CARM client portal.
- Log in to your CCP account and set up a Business Account Manager (BAM) or delegate authority to your customs broker, if applicable.
- Use our online application for to apply and pay for a RPP bond.
- Once we process your online application, the bond will be automatically uploaded to your CARM Client Portal by Western Surety. It may take 1-2 business days to appear.
How to Get a Customs Bond/Financial Security ($5,000-$50,000)
Obtaining a customs bond (now known as a financial security according to CARM) has never been easier with our new digital application process. To get your customs bond online, simply click on the application link and follow the steps below.
If you require a customs bond requirement greater than $50,000, please email carmbonds@acera.ca.
- Complete our online application for your business.
- Indicate the bond requirement you are applying for ($5,000 – $50,000).
- Select your preferred term (length) for the bond.
- Pay for the bond using a credit card.
- Once the application has been processed, the bond will be automatically uploaded to your CARM Client Portal by Western Surety. It may take 1-2 business days to appear.
Are you a broking company or do you need assistance with another type of bond?
If you require another type of bond or a higher limit, please contact us at carmbonds@acera.ca and a Surety Specialist assist you. We are here to help!
RPP and Customs Bond FAQs
Failure to register may lead to shipments not being released by CBSA. Apart from financial losses incurred from disrupting your business operations, you could end up facing additional costs for storage, demurrage, moving in bond and driver waiting changes. Register online with CARM today. Once you are registered, we can help you secure your RPP bond.
The amount you can expect to pay for your RPP Customs Bond will vary based on your security requirements and the bond value selected. At Acera Insurance, we work with knowledgeable Surety providers to secure exclusive and affordable options for you.
For Bonds valued at $5,000-$25,000:
- 1 yr = $250
- 2 yr = $450
- 3 yr = $600
For Bonds valued at $25,001 – $50,000
- 1 yr = $500
- 2 yr = $750
- 3 yr = $1000
Keep in mind that the bond itself is continuous until either we cancel it for lack of payment or you cancel it if it is no longer needed. We do however sell the bond in “terms” which vary in length and will need to be renewed depending on the term you select.
All premiums are inclusive of taxes and fees and are calculated on the required bond amount.
At Acera Insurance, we do our very best to secure your bonding needs quickly and effortlessly. Our timeline may vary from 1-2 business days depending on the season and the complexity of the bond request. Generally, it’s a very quick process and we do our best to make is as fast and seamless as possible for you.
A continuous customs bond is a self-renewing bond, which is paid annually and guarantees coverage to pay importing duties for ongoing imports to multiple ports of entry. For importing business with plans to operate for several years to come, a continuous customs bond offers a convenient way to ensure you have the protection you need, without the stress of worrying where or when shipments are arriving at any given moment. Continuous bonds will stay in place indefinitely and can be cancelled at any time.
A single-entry bond, also known as SEB, is only applicable if your business needs to cover a single shipment or one import transaction. It is also limited to a specific port of entry. Single-entry bonds do not renew annually, as they are meant for the arrival of one shipment on a set date.