Important Notice to Importers: CBSA Implementing New Procedures on Payments of Approved Customs Refunds

Date: August, 01, 2016.
Important Notice to Importers:
Subject: CBSA Implementing New Procedures on Payments of Approved Customs Refunds
Delmar International would like to inform our customers that the Canada Border Services Agency (CBSA) is introducing changes to their accounting system effective August 2nd, 2016, that will impact custom brokers and importers. Most importantly, the CBSA will no longer issue customs refund checks, instead credits will be issued and an account off-setting process will be used to credit importers and brokers duty accounts accordingly..

As a result, customers that are on their own “direct security” will receive CBSA statements with the refunds showing as credits, and those importers that rely on their customs broker to remit their duty and taxes will receive Delmar statements with the refunds credited accordingly.

Customs will continue to issue (DAS) Detailed Adjustment statements indicating refunds are approved followed by the credits appearing at a subsequent date on CBSA summary statements should refunds exceed amounts owing checks will be issued for any surplus funds owing to importers after the offset process is completed.

Delmar continues to monitor all North American trade modernization initiaves such as CBSA’s Assessment and Revenue Management (CARM) to ensure its customers are kept up to date on these changes and how if may affect their business.

For additional information please see the the following information or contact your local Delmar customer service representative

Below you can find more detailed information on the program.

Date: August, 01, 2016.
Important Notice to Importers:
Subject: CBSA Implementing New Procedures on Payments of Approved Customs Refunds
CARM – CBSA’s Assessment and Revenue Management Project

CARM is a large, multi-year project to transform how the CBSA assesses, collects, manages and reports on import revenue and trade information.
The first phase of the CARM project, the Accounts Receivable Ledger (ARL), will bring changes to daily and monthly statements for importers and brokers. ARL will improve, simplify and streamline the assessment and collection of revenue from the commercial trade community.

ARL – Accounts Receivable Ledger

On January 26, 2016, the CBSA introduced ARL, a fully integrated and centralized accounting system that allows for the off-setting of account credits (refunds) against debits (amounts payable), and offers importers and customs brokers more comprehensive accounting statements and new electronic payment options.

STATEMENTS – Daily Notices and Statement of Accounts

With the implementation of ARL, the current K84 – Importer/Broker Account Statements (K84s) will be replaced with electronic Daily Notices (DN) and Monthly Statement of Accounts (SOA), providing importers and customs brokers with additional transaction information in a comprehensive statement. The importer statements will be issued using the 15 digit business number (e.g., 123456789RM0000); the statements for customs brokers will be issued using the 9-digit business number (e.g., 123456789).

CBSA previously communicated that it would continue providing, for information purposes only, reference K84s to importers and customs brokers for one full accounting period following the ARL implementation date.

The new DNs will be electronically produced daily, unless there has been no activity for that day, and will include transaction details relating to accounting documents such as the Form B3, B2-1 Detailed Adjustment Statements, K32 Drawback, *Notice of Penalty Assessment (NPA), *K9 Ascertained Forfeiture, K23 Miscellaneous Invoice, *Non-sufficient Funds (NSF) Fees and transactions currently under appeal. (*Importer DN only).

The new SOAs will now be consistently produced on the 25th day of the month, as opposed to the current monthly K84, which is generated on the second to last business day of the month.
This new statement will include additional transaction details relating to accounting documents such as the Form B3, B2-1 Detailed Adjustment Statements, K32 Drawback, * Notice of Penalty Assessment (NPA), *K9 Ascertained Forfeiture, K23 Miscellaneous Invoice, * Non-sufficient Funds (NSF) Fees and transactions currently under appeal.(*Importer SOA only).

With ARL, the customs broker’s SOA will only include broker transactions, i.e., where the customs broker is the importer and the transactions that they have secured on behalf of their clients under their broker’s ASEC. In cases where a B3 is filed by a customs broker on behalf of an importer who is a GST Direct Payment or Importer Direct Security client, i.e., where a G or I indicator has been included in field 6 of the B3, the amount owing will be shown on the custom broker’s DN with the respective G or I indicator. These items will not be included in the daily summary row or in the total payable on the customs broker’s SOA.

Importers and customs brokers who have registered with the CBSA will be able to receive DNs and monthly SOAs electronically. For additional information on how to register to receive electronic ARL statements, please contact the CBSA’s Technical Commercial Client Unit (TCCU) at: tccu-ustcc.

Importers and customs brokers will be able to receive statements through Electronic Data Interchange (EDI) and therefore, the CBSA will not be batch printing the new DNs and SOAs.

Importers and customs brokers requiring a paper copy will be able to make a request in person at a CBSA office that offers this service.

The CBSA will only provide, upon request, printed ARL statements for clients that are not certified * to receive electronic statements, or for clients, certified to receive electronic statements, in extenuating circumstances only, e.g., client system outage. (* The CBSA officer will provide the client with the contact information for the Technical Commercial Client Unit (TCCU) and recommend that they consider options to receive their statements electronically).

A customs broker requesting printed account information for an importer must be able to demonstrate that they hold proper representative authority as granted by their client. The CBSA will accept any form of written authority that indicates that the broker/agent has been authorized to transact business on behalf of the importer; Memorandum D1-6-1, Authority to Act as an Agent, provides additional guidance on the required information.

Date: August, 01, 2016.
Important Notice to Importers:
Subject: CBSA Implementing New Procedures on Payments of Approved Customs Refunds
OFF-SETTING

Effective August 2, 2016, account off-setting will begin and as of this date, the CBSA will no longer issue refund checks to the importers but will issue credits that will automatically be applied to the importer’s or customs broker’s account to reduce the balance owing.

When a credit is issued it will appear on the Daily Notices (DN). The off-setting process will occur at the end of the month before the Statement of Account (SOA) is issued.

The fundamental principle of off-setting relies on financial management best practice where a disbursement is not issued to a recipient who has outstanding debt.

RESIDUAL CREDITS AFTER OFF-SETTING

If, after off-setting has occurred, an importer’s account shows a credit balance, and there is no outstanding debt associated to the account, a disbursement will be issued directly to the importer if:

  • The credit balance is greater than or equal to $1,000.00;
    or,
  • There has been a credit balance of less than $1,000.00 for two consecutive months

If an importer’s account is in default and formal collection has begun, any importer credit may be applied against any of the importer’s debt.

CBSA has decided that cheques will be sent to the legal entity mailing address – this is the BN9 mailing address that is in the CRA’s BN system. Reasoning was that in moving towards client based accounting, this address would represent the legal entity address and would be a one to one relationship for the client – each legal entity can have only one BN so therefore only one mailing address – whereas there may be a separate mailing addresses for each individual program account (i.e. different ones for each RM, ASEC, Carrier Code, etc…).

Information for businesses on how to verify/change their Business Number addresses is available at the following link: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/lf-vnts/chngddrss-eng.html.

Importers are advised to verify their mailing address information in their CRA records.

PAYMENT

With the introduction of ARL, the payment dates and the rules for the application of late payment penalties and interest charges do not change. All CBSA commercial offices will continue to accept payments, issue receipts and make deposits, within posted business hours.

Any payments, including interim payments, will be posted against the client’s account, and will no longer need to be applied to a specific transaction or DN.

Unless specifically requested by the importer, the payment will be applied to unpaid transactions on the account using the CBSA’s payment allocation rules.

With ARL implementation, the CBSA, in partnership with participating Canadian Financial Institutions, is introducing two electronic payment methods:

  • Electronic Data Interchange (EDI) Payment Service;
    and,
  • Internet banking

As directed by the Receiver General of Canada, the CBSA will be encouraging importers to move to direct deposit for this residual credit.

For more information regarding the implementation of the ARL, visit the CARM page on the CBSA Web site, or within Canada, call the Border Information Service at 1-800-461-9999. From outside Canada call 204-983-3500 or 506-636-5064. Long distance charges will apply. Agents are available Monday to Friday (08:00 – 16:00 local time / except holidays). TTY is also available within Canada at: 1-866-335-3237.

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