CARM financial security: how much Release Prior to Payment needs, and what happens when it runs short

What is Release Prior to Payment, and who has to post security for it?

Release Prior to Payment (RPP) is the privilege that lets an importer get goods released by the CBSA before paying duties and taxes, account for them afterwards, and pay on a monthly statement. CBSA Memorandum D17-1-8 lists the three things it allows: release before payment, deferred accounting and deferred payment. Posting security for RPP is also what allows a release on minimum documentation.

The legal basis is section 9 of the Accounting for Imported Goods and Payment of Duties Regulations: commercial goods may be released before payment on condition that the importer gives security under section 11, "in an amount determined by the Minister", through the Financial Security (Electronic Means) Regulations. The amount itself is set by CBSA policy in Memorandum D17-5-2, not in the regulations.

Who needs it, under D17-1-8:

• Every commercial importer that wants RPP, resident or non-resident, including importers of Courier Low Value Shipment goods.
• Importers that use a customs broker. The broker transacts, but "it is the importer's security that is to secure duties and taxes in the case of non-payment".
• Brokers and couriers that clear casual goods under their own importer accounts, for those goods.
• Not importers that bring in only goods unconditionally free of duties and taxes. If CARM finds duties or taxes on a transaction, security becomes required.

The CARM transition, which let importers use RPP without security after October 21, 2024, ended at 3:00:01 am EDT on May 20, 2025, according to Customs Notice 25-22. Accounts with dutiable or taxable imports that had not posted security were removed from RPP that day. Without RPP, the notice says, goods are accounted for on a Type C CAD with duties and taxes paid at release.

How does CARM calculate the amount?

D17-5-2 sets the requirement per importer program account (the BN15 RM account), so a company with several RM accounts posts security for each:

CARM computes the requirement and checks that the amount posted matches. An importer can raise it without approval; a reduction below the calculated amount needs CBSA approval and may require projections and evidence.

The annual review. D17-5-2 sets a review period of October 20 of one year to October 19 of the next. The new requirement is notified in the CARM Client Portal and takes effect on January 15, the date by which importers must comply. D17-1-8, which has not been revised since October 2024, still describes a July review window; D17-5-2 is the later text.

Forms. A written security agreement must come from an approved surety or insurer, a payments association member, a deposit-taking institution or a credit union, as listed in section 4 of the Financial Security (Electronic Means) Regulations, and is entered or confirmed electronically by that provider. A cash deposit is created in the portal and has no expiry date. Paper security is accepted only in the exceptional cases the regulations list, with CBSA approval.

What is the difference between the requirement and the coverage test?

There are two numbers, and they are tested at different times.

• The requirement is the minimum security you must have posted, set at enrolment and at each annual review.
• The coverage test runs every day. D17-5-2 says the importer "must ensure that the total security coverage is always higher than their account net open balance", which is debts minus available credits. A bond of CAD 150,000 gives CAD 300,000 of coverage; a cash deposit of CAD 150,000 gives CAD 150,000.

CARM sends a notification when use of the security reaches 75% and again at 100%. Above 100%, the importer must make a payment or increase coverage, and the CBSA can suspend or revoke the privilege for not keeping adequate security.

The billing cycle explains why the open balance can run ahead of one month's charges. Memorandum D17-1-5 sets the billing period from the 18th of one month to the 17th of the next, with payment due 10 weekdays after the 17th, where weekdays are "defined as Monday to Friday, inclusive of holidays", so a statutory holiday does not push the date back. Between the 18th and that due date, the account carries the closed statement, not yet due, and the new period's releases at the same time. An importer that pays on the due date carries roughly a month and a half of charges at the peak. Paying the statement early is the cheapest way to bring that peak down.

How do surtaxes raise the security you need?

Surtaxes are charged on the CAD with the other duties and become part of the account receivable. CBSA Customs Notice 26-23 sets the United States Surtax Order (2026) at 15%, 25% or 50% of the value for duty on listed US-origin goods from September 8, 2026, in addition to any other duty, and charges GST on a value that includes the surtax. A product line that was free of duty under CUSMA can go from owing only GST to owing a 25% surtax plus GST on it.

That reaches the security two ways:

1. Coverage, immediately. The new surtax enters the open balance from the first statement after the order takes effect. A bond sized on last year's balances may be over 100% use within one billing cycle.
2. The requirement, at the next review. Once the higher months fall inside the review period, the highest-month base rises and with it the security CARM requires from January 15.

Corrections do the same. D17-1-8 includes "adjustments, interests, etc." in the balance, and adjustments post to the statement under Memorandum D17-2-1. A large section 32.2 mass correction, for example after a transfer pricing adjustment or a surtax missed on past lines, lands in one statement and can push use over 100% even when imports are flat. Plan the security before filing the correction, not after. How corrections are filed and billed is in correcting a Canadian entry, and how surtax orders apply line by line is in why your CAD shows the wrong surtax.

How do you size security from your broker's accounting export?

You can rebuild CARM's number from the CAD lines your broker sends you:

1. Group the last 12 months of CADs by RM account and billing period (18th to 17th), using the release date for Type AB CADs.
2. Add every charge on each line: customs duty, each surtax, SIMA duties, excise, and GST. Add adjustments and interest posted in the same period.
3. Take the highest period. That is a floor estimate of the base. D17-5-2 measures the "highest monthly account receivable balance", which can include charges from an earlier statement that are still open, so CARM's figure may be higher than yours. Treat the requirement shown in the CARM Client Portal as the number that counts, and use your rebuild to see what drives it and where it is heading. Multiply by 50% for a bond (at least CAD 5,000) or 100% for cash, capped at CAD 10 million per account.
4. Project forward. For each product line affected by a surtax order, apply the order's rate to the expected value for duty and the GST on top, and add any corrections you plan to file.
5. Model the peak. Add the share of the following period that will be posted before the due date, and compare it with your coverage.
6. Act before the alerts. Raise the bond or pay early before the forecast crosses 75%, and diary October 19 and January 15 for the annual review.

How does it work out on one account?

An importer has one RM account. Over the 12 months to August 2026, its highest monthly balance was CAD 300,000 of duty and GST, so it posted a bond of CAD 150,000 (50%), giving CAD 300,000 of coverage. The figures are illustrative.

From September 8, 2026, CAD 400,000 a month of its imports are US-origin goods listed at 25% in Schedule 2 of the United States Surtax Order (2026), with 0% customs duty under CUSMA:

The statement for September 18 to October 17, 2026 is due on October 30, 10 weekdays after the 17th. By then the account also carries the releases of October 18 to 30. Even if the importer paid the earlier statement on time, the open balance passes CAD 300,000 well before October 17, so CARM's 100% alert fires during the first full billing period under the surtax.

The importer has two choices: pay statements early, or raise the bond. A bond of CAD 202,500 (50% of 405,000) covers one full month at the new level. Covering the two-week overlap before the due date takes about CAD 290,000 of bond, or paying early. September and October 2026 fall inside the review period that closes on October 19, 2026, so the requirement notified for January 15, 2027 already reflects at least one surtax month.

The same arithmetic runs in reverse. If a remission order or a section 74 refund brings the monthly balance down, the requirement falls only at the next review, unless the importer asks for a reduction and the CBSA approves it.

What happens when payment or security fails?

• Late payment. D17-1-8 says importers may be suspended after their third late payment. If RPP is revoked for late payment and no claim was made on the security, the importer is ineligible for one year; if a claim was made, for three years. Late payment of duties and taxes is AMPS contravention C336.
• Late accounting. D17-1-5 requires a Type AB CAD within 5 business days of release, and applies a CAD 100 late accounting penalty automatically when it is missed.
• A claim on the bond. Under section 8 of the Financial Security (Electronic Means) Regulations, the Minister may demand payment from the security provider when the importer has not paid by the due date. The demand is for the lesser of the debt and the security amount. Section 9 gives the provider 60 days to pay or rebut, and a provider must pay despite any dispute with the importer. D17-5-2 says a demand follows reasonable attempts to collect from the importer, or a bankruptcy.
• Bond termination. The provider must notify the CBSA at least 30 days before a termination date. The CBSA can still demand payment within one year after termination, for debts incurred before it. CARM sends an expiry notice within three months of a bond's end date.

How is this different from a US continuous bond?

Both countries size the security from your own duty history, but on different measures. CBP looks at a year of duties, taxes and fees, while the CBSA looks at the single highest month of the account's balance, which already includes GST and any corrections. Canada also lets cash count dollar for dollar and has no rounding steps. A surtax or a new tariff layer reaches both, on different timetables. The US side is covered in continuous bond sufficiency when tariffs stack.

What should you do next on your own entries?

Ask your broker for the last 12 months of CAD lines with every charge itemized, rebuild the monthly balance per RM account, and compare the highest month with the security you posted. Then add the surtax and any corrections you plan to file, and check the peak before each statement's due date. TariffSense reads your CAD lines, applies each surtax in force on each line's date, and can project the monthly balance and the security it implies, so the shortfall shows up before CARM's alert does. Confirm the amount and form of security with your licensed customs broker or surety. For the line-by-line checks behind those balances, start with the CAD audit guide, or see the post-entry audit.