Importers/exporters face ‘big regulatory change’ May 28, 2021
By: Martin Cash | Winnipeg Free Press
WITH travel and other border security issues caused by the pandemic, importers and exporters have had more things to worry about than strictly domestic enterprises and this week they’ve had to become familiar with a new regulatory platform that the Canadian Border Services Agency (CBSA) has had in the works for a few years.
Registration has started this week for the CBSA’s Assessment and Revenue Management (CARM) system.
All 235,000 importers will have to register on the online client service portal in order to do business with the CBSA in what is the biggest change in the border services regulatory regime for many years.
An online conference on Thursday morning put on by the World Trade Centre Winnipeg called Canada/US Border Open for Business: What You Need to Know determined at least one thing — importers need to know an awful lot.
Then again, they have relied on customs brokers in the past and that won’t change with the implementation of CARM, although theoretically they will be able to have greater access and clarity when it comes to the accounting side of the importing and exporting process.
Referring to CARM, Mackenzie West, the marketing director and business development manager at the large Winnipeg customs broker GHY International, said during the conference, “It is a big regulatory change.”
When it comes to staying compliant with international trade rules, West said the big issues are understanding the tariffs, correctly valuing the cost of the goods or services being imported and correctly noting the origin of the products being imported.
After an auditor general audit a few years ago that found that CBSA was not doing a good enough job collecting tariffs and taxes, the CARM system is designed to be the answer to that.
In an interview, Chris Bachinski, the president of GHY, said, “It is a very different environment in the U.S. than in Canada. It think the CBSA is trying to go in that direction (towards the American regulatory style). It is all about increasing compliance.”
For a few years, the World Trade Centre Winnipeg has done this kind of conference on the road, taking a bus load of local exporters and importers to the U.S. border who would meet personally with border agents from both sides.
“We miss the networking, but by doing it online we are able to get more people involved,” said Mariette Mulaire, CEO of World Trade Centre Winnipeg.
“We really want to see more trading happen and we also want to de-mystify the process.”
De-mystifying the process is what customs brokers do for a living.
The initial phase of the CARM rollout that started this week requires importers to register and delegate authority to a service provider, typically a customs broker.
The next big change, that won’t happen until the spring of 2022, is requiring importers to get their own security.
“Most importers use our security,” Bachinski said in reference to customs brokers in general.
“We have a $10 million bond with the government. When the goods cross the border we promise to pay on behalf of the importer. Now importers will have to go out and get their
own insurance policies.”
He said there is still some uncertainty as to how that will work and how the surety industry is planning to handle that, so Bachinski says they needn’t worry just yet.
“Right now most of our clients rely on us to have products released at the border and to reconcile the accounting with the government,” he said.
CARM will mean the importer will have more visibility on the financial clearance, but it’s likely that many smaller companies will still look to the custom brokers for help.
“Lots of our importers that we are talking to these days wonder why they have to do this,” he said. “They like it that we look after everything for them.”