CARMS Importer Bonds Montreal
Montreal is one of Canada’s largest port cities, moving over 35 million metric tons of goods in 2023. Approximately 10% of Canada’s total imports move through this city of 1.7 million. Many of Canada’s 130,000+ importers need to manage CARMS importer bonds in Montreal.
In terms of total tonnage, the Port of Montreal typically ranks in third or fourth position. It leads in containerized shipments by far, averaging 2,000 vessels a year and 7 million metric tons of container imports.
Between its port and the headquarters of the Canadian National Railway, Montreal is an ideal location for importers, exporters, manufacturers, wholesalers and distribution businesses. Machinery, consumer goods, petrochemical products, automobiles and textiles are some of the region’s main imports.
Are CARMS Surety Bonds a Requirement for Importers in Montreal?
CARMS applies to all commercial importers in Canada, regardless of how large your business is or how many commercial goods you import. CARMS regulations require importers who want to participate in the Release Prior to Payment Program to post financial security.
There are a few acceptable types of RPP guarantees, such as security cash deposits or letters of credit from lenders. Importers often use surety bonds as written security agreements for CARMS. Importer bonds act as a guarantee of payment to the CBSA, allowing you to get goods through customs immediately but pay duties at the end of the billing period.
If you don’t use the RPP Program for importing, your only other option is to pay the CBSA immediately with each order, such as with a company credit card or by setting up a pre-authorized debit agreement. Unfortunately, this type of arrangement can hurt your organization’s working capital, add high-interest debt or make it harder to manage your finances.
What Is the Difference Between CARMS Importer Bonds in Montreal and Past Import Agreements?
In the past, Montreal’s import rules allowed customs brokers to cover RPP bond requirements on behalf of their clients. For example, if you used FedEx for importing goods, your business didn’t need to worry about guaranteeing payment personally. Instead, the broker secured the bond and included fees as part of the service.
Now, CARMS requires each importer to create a CARMS account, apply for surety bonds and manage payments to the CBSA individually. This has its benefits, such as giving you greater control over your business’s import expenses and preventing excessive broker costs. At the same time, CARMS changes make your company responsible for providing a security guarantee, which isn’t easy for cash-strapped businesses.
Sources:
https://www.fedex.com/en-ca/shipping-services/international/regulatory/carm.html
https://www144.statcan.gc.ca/nats-stna/tables-tableaux/tbl11-4a/tbl11-4a-CAN-eng.htm
https://www150.statcan.gc.ca/n1/daily-quotidien/240516/dq240516a-eng.htm
https://www.port-montreal.com/en/the-port-of-montreal/about-the-port/at-a-glance/statistics
https://en.wikipedia.org/wiki/Montreal
https://www.shipafreight.com/knowledge-series/largest-ports-canada/
https://www.ibisworld.com/canada/industry-trends/biggest-importing-industries/