CARM Update: Financial Security Requirements for Release Prior to Payment (RPP) – What Canadian Importers Need to Know

CARM Update: Financial Security Requirements for Release Prior to Payment (RPP) – What Canadian Importers Need to Know

Effective August 8, 2025, the CBSA has revised its policies for financial security under the Release Prior to Payment (RPP) program as part of CARM Release 3. This update streamlines security processes through automation and the CARM Client Portal (CCP), giving importers more control over managing their financial security online.

What is RPP?

RPP allows importers to:

  • Release goods from CBSA before paying duties and taxes.
  • Defer accounting for goods.
  • Defer payment of duties and taxes.

Enrollment requires financial security in the importer’s legal entity name, tied to their business number in the CARM Client Portal (CCP).

🔗 CBSA Memorandum D17-1-8 – Release Prior to Payment Privilege

Accepted Forms of Financial Security

  1. Written Security Agreement (Non-Cash Bond)
    • Provided by an approved surety or financial institution (see CBSA’s accepted provider list).
    • Covers 2x the debt: Posting 50% of the calculated requirement.
    • Minimum: $5,000 per RM account.

🔗 List of Approved Surety Providers

  1. Deposit (Cash Bond)
    • Posted in CCP, 100% of calculated requirement.
    • No minimum requirement.
  1. Other Forms (exceptional circumstances only)
    • Certified cheque, money order, or paper bond (requires CBSA approval).

🔗 CBSA Contact Form – RPP Financial Security

Security Requirement Calculation

  • Based on highest monthly accounts receivable in the past 12 months per RM account, including duties, GST, interest, and adjustments.
  • Annual review period: Oct 20 – Oct 19 each year.
  • New requirement takes effect Jan 15 – importers must adjust security accordingly.
  • If no history exists, importers must self-assess based on projected imports.

🔗 CBSA Memorandum D17-5-2 – Financial Security for Release Prior to Payment

Updating Security

  • Request changes via CARM Client Portal (CCP).
  • Increases do not require CBSA approval.
  • Decreases require CBSA approval and may need supporting evidence.
  • Security providers can update amounts/validity directly via API or CCP.

Ongoing Monitoring & Notifications

  • Importers must ensure coverage is always maintained above the net open balance at all times.
  • CBSA will notify at 75% and 100% utilization.
  • Exceeding 100% can result in suspension or revocation of RPP.

Expiry & Termination

  • Written Security Agreements have set expiry dates; CBSA notifies 3 months prior.
  • Termination by provider takes effect 30 days after CBSA receives notice.
  • Cash deposits have no expiry.

Demands Against Security

  • CBSA may draw on the posted security if debts are unpaid after reasonable collection efforts, or in case of bankruptcy.
  • Demands can include all debts incurred while the security was active.
  • CBSA can make a claim up to 1 year after a security agreement expires for debts incurred during its validity.

🔗 Financial Security (Electronic Means) Regulations

Key Takeaways for Importers

  • Act Early: Review your highest monthly receivable to anticipate your new security requirement before CBSA’s January 15 deadline.
  • Monitor Regularly: Use CCP’s tracking tools to avoid breaching the 100% utilization limit.
  • Choose Wisely: Cash bonds tie up funds but cover 100%; non-cash bonds require only 50% but have minimums.
  • Stay Compliant: Failing to maintain adequate security risks losing RPP privileges, impacting your ability to clear goods quickly.

Pro Tip for Canadian Importers:

If your business is growing or imports fluctuate seasonally, consider overestimating your security requirement during setup. This avoids urgent top-ups that could delay shipments, especially during peak import seasons.