In October 2024, the Canada Border Services Agency (CBSA) made CARM—the CBSA Assessment and Revenue Management system—the official platform for managing duties and taxes on commercial goods imported into Canada. Designed to modernize Canada’s customs process, CARM gives importers and trade partners a more centralized way to manage accounting, payments, and compliance through the CARM Client Portal.
For US merchants, this shift represents an important step toward a more digital and transparent importing experience. While CARM introduces new requirements for businesses shipping B2B orders into Canada, it also creates an opportunity to strengthen cross-border operations, improve visibility into duty and tax obligations, and build a more scalable process for serving Canadian customers.
In this article, we’ll outline what US merchants need to know about CARM, how it impacts B2B shipments into Canada, and how businesses can prepare to take advantage of the opportunities in the Canadian market.
Key Highlights:
- Importers are now required to pay duties and taxes through the client portal.
- Commercial shipments where the merchant is designated as the Importer of Record (IOR) are primarily affected.
- DTC and B2C imports into Canada are unaffected unless the merchant registers as an NRI and lists themselves as the IOR.
- Customs brokers no longer have Release Before Payment (RPP) privileges for shippers.
- Importers need to purchase their own customs bond, pay duties and taxes up front, or make a cash deposit with CBSA to clear commercial shipments.
- All commercial businesses should already be registered, as CARM became mandatory in October 2024.
CARM Overview
The implementation of CARM has been structured through a phased rollout. Release 1 introduced the CARM Client Portal, an online self-service tool designed to simplify accounting and revenue management for Canada’s importing community. Through the portal, importers and trade chain partners can manage their accounts, delegate access to service providers, make secure online payments, and submit and track rulings requests. CBSA also notes that users can view statements of account, access transaction history, and make payments through the portal.
CBSA later phased in the broader CARM launch, first launching Release 2 internally for CBSA use in May 2024 and then making CARM available externally to importers and other trade chain partners on October 21, 2024. As of that date, CARM became the official system for importers and trade chain partners to account for commercial goods and pay applicable duties and taxes owed to the CBSA. Commercial importers are expected to register their business in the CARM Client Portal to manage their accounts and access CBSA online services.
While CBSA has referenced further enhancements as part of CARM’s phased implementation, official guidance does not currently confirm a defined Phase 3 impact on B2C shipments. Merchants should continue monitoring CBSA updates for future changes that may affect different import models.
What’s Changing With CARM?
With CARM now fully enforced, importers are required to pay duties and taxes through the client portal. This means to clear commercial or B2B shipments in Canada you’ll need to:
- Register for an import/export program account to receive a Non-Resident Importer (NRI) number.
- Create an account in the CARM Client Portal (CCP).
- Purchase a D120 Customs Bond in order to participate in the Release Prior to Payment (RPP) privilege – this allows you to obtain the release of goods from the CBSA before paying duties and taxes, deferring accounting – or pay duties and taxes on the spot each time a shipment crosses the border.
- Authorize your customs broker to access your CARM data. While brokers will still submit customs entries, payment must be made in the client portal.
- Reconcile shipments and pay duties and taxes through your CCP account.
The most significant change here is that customs brokers can no longer secure RPP for shippers. Prior to CARM, customs brokers were allowed to extend the use of their own customs bond to any importer. While it’s not mandatory to purchase a D120 bond, it’s the only way to release commercial shipments without paying duties and taxes upfront or making a cash deposit with CBSA.
Who will CARM Impact?
Put simply, CARM applies to all commercial shipments and affects any merchant listed as the Importer of Record (IOR). This means that most direct-to-consumer (DTC) imports or B2C shipments into Canada are not currently impacted by CARM requirements, as they are classified as “casual” entries and not commercial shipments. However, when a US business registers as an NRI and lists itself as the IOR, these shipments become “commercial” or B2B customs entries, even if they are ultimately being delivered to customers.
More examples of those affected by CARM include US merchants who are:
- Registered for and reporting GST/HST – Once registered, businesses must collect and report GST/HST on all shipments. Some brands choose to do this by shipping under their GST/HST number, thereby becoming the IOR.
- Selling through marketplaces that require the US merchant to register for GST/HST – Some Canadian retailers require US merchants to register for a Canadian tax ID to clear shipments through customs.
- Registered for GST/HST due to regulatory reasons – Companies with regulated products may need to name themselves as the IOR because they hold an import license for specific commodities.
- Shipping to Canadian warehouses for fulfillment – When merchants ship to Canadian fulfillment centers or utilize services like Fulfillment by Amazon (FBA), they must clear customs under their own business number and act as the IOR.
- Shipping to small Canadian retailers – Certain brands supply smaller Canadian retailers who may lack the expertise to navigate the new CARM regulations. To avoid potential delays and returned shipments, the US merchant may need to assume the role of the IOR.
Other parties that may face challenges under the new CARM regulations are Canadian retailers who are unfamiliar with import requirements. Previously, customs brokers could handle clearance by simply obtaining the retailer’s GST/HST ID and power of authority. Now retailers must be registered for CARM, grant access to all of their carriers and brokers, post-financial security themselves to ensure shipments are released, and pay duties and taxes directly through the client portal.
How Passport Can Help
As a US merchant shipping to Canada, it’s important to understand how CARM impacts your brand and whether you’re required to register. Familiarizing yourself with these new regulations is crucial for ensuring your brand is able to clear shipments efficiently and avoid costly delays due to customs holds. As the landscape of international trade continues to evolve, staying ahead of these changes is imperative for maintaining access to the Canadian market. Passport’s team of customs compliance experts is available to answer any additional questions you have about CARM and its effects on your business. Simply reach out to us here.
For the latest updates on CARM, refer to the CBSA website.
Authored by Thomas Taggart
Head of Global Trade | Passport
Thomas Taggart is a cross-border commerce leader with more than 20 years of experience in international shipping and regulatory affairs. As the Head of Global Trade, Thomas helps ecommerce brands go global by simplifying international trade, tax, and product compliance issues. Prior to Passport, he brought international shipping solutions to market through multiple roles in UPS’s product development organization.
Frequently asked questions
What is CARM?
CARM stands for CBSA Assessment and Revenue Management. It is the Canada Border Services Agency’s digital system for assessing and collecting duties and taxes on commercial goods imported into Canada. As of October 21, 2024, CARM is the official system of record for commercial import accounting and duty/tax payments. (Canada Border Services Agency)
Does CARM apply to US merchants?
CARM may apply to US merchants if they are importing goods into Canada as the Importer of Record (IOR). This is most common for merchants shipping B2B orders, shipping inventory to a Canadian warehouse or fulfillment center, selling to Canadian retailers, or operating as a Non-Resident Importer (NRI).
For standard DTC or B2C shipments where the consumer is treated as the importer, CARM generally does not change the merchant’s process.
Do all US merchants need to register in the CARM Client Portal?
Not necessarily. US merchants typically need to register if they are acting as the Importer of Record for commercial shipments into Canada. If your business is not the IOR and you are only shipping direct-to-consumer orders where the buyer is treated as the importer, CARM registration may not be required.
However, if your business has a Canadian business number, GST/HST registration, an import/export program account, or uses a customs broker to clear commercial shipments, you should confirm whether CARM registration applies to your setup.
What changed for customs brokers under CARM?
Customs brokers can still help submit entries and support the customs process, but importers can no longer rely on a broker’s Release Prior to Payment security to release goods before duties and taxes are paid. Importers that want Release Prior to Payment privileges must post their own financial security through the CARM Client Portal. (Canada Border Services Agency)
What is Release Prior to Payment?
Release Prior to Payment, or RPP, allows approved importers to have goods released by CBSA before final duty and tax payment is made. This can help keep commercial shipments moving without requiring payment at the border for every shipment.
Under CARM, importers must enroll in RPP and post their own financial security in the CARM Client Portal to use this privilege. (Canada Border Services Agency)
Do I need a customs bond to ship commercial goods to Canada?
A customs bond, commonly referred to as a D120 Customs Bond, is one way to meet CBSA’s financial security requirements for Release Prior to Payment. Importers can also post a security deposit in the CARM Client Portal. CBSA states that financial security can be posted electronically through either a security deposit or a security agreement. (Canada Border Services Agency)
A bond is not required for every shipment, but without RPP financial security, importers may need to pay duties and taxes before goods are released.
What happens if I do not register for CARM?
If your business is required to use CARM and has not registered, your commercial shipments may face delays because you may not be able to properly account for imported goods, manage payments, or authorize your customs broker through the portal. CBSA states that importers and trade chain partners registered in the CARM Client Portal can manage accounts and access CBSA online services. (Canada Border Services Agency)
Are DTC and B2C shipments affected by CARM?
Most standard DTC and B2C shipments are not directly affected by CARM if the shipment is treated as a casual import and the end customer is the importer. However, if a US merchant chooses to act as the Importer of Record, registers as a Non-Resident Importer, or clears shipments under its own business number, those shipments may fall under CARM’s commercial import requirements.
Why would a US merchant choose to become the Importer of Record?
Some US merchants choose to become the Importer of Record to create a smoother experience for Canadian customers, support B2B sales, ship inventory to Canadian warehouses, sell through retailers or marketplaces, or manage GST/HST obligations more directly.
Becoming the IOR can give merchants more control over the import process, but it also brings additional compliance responsibilities under CARM.
Can Passport help with CARM?
Yes. Passport can help US merchants understand whether CARM applies to their shipping model, evaluate whether they are acting as the Importer of Record, and identify the operational steps needed to keep shipments moving into Canada.
For merchants looking to grow in the Canadian market, CARM is not just a compliance change. It is also an opportunity to build a more transparent, scalable, and reliable cross-border fulfillment strategy.