What Happens When You Do Not Post Financial Security?

April 19th, 2025, marks an imperative date for Canadian Commercial Importers - the end of the 180-day grace period of Release Prior to Payment Privileges (RPP) for those importers without a form of financial security posted in their CARM Client Portal. For those importers, this blog is for you, as failure to do so will result in the CBSA rejecting your shipments at the border, and as a result, a lengthy in-term release process with increased costs.

In today's blog, we've interviewed Brandon Smith, a member of our CARM help desk team, on what the end of this grace period will look like. 

Q: What happens if an importer fails to post financial security before the end of the transition period?

If financial security is not provided within the 180-day transition period, the importer will be removed from the RPP program on day 181 (April 20th, 2025).

Q: What happens when you do not have RPP?

Firstly, the next shipment your company tries to import into Canada will be rejected by CBSA when submitted electronically by your Customs broker. At this point, your only options are to post a form of financial security in the CARM Client Portal or submit a paper release package. This requires you to meet the carrier at the port to both pay for the duties and taxes for that shipment as well as submit a paper release known as the C-Type CAD process.

Q: How does the C-Type CAD process work?

The shipment details will need to be entered into the CARM Client Portal to create the C-type CAD. Once approved in CARM, the CAD needs to be printed, and the entry package needs to be put together. The entry package consists of the C-type CAD, Invoices, bills of lading, and any other permits, licences, or documents needed to obtain release into Canada, such as Canadian Food Inspection Agency (CFIA) approved release documents. 

As stated in the previous question, you then need to coordinate with the carrier, meet them at the port of entry, and present the release package to the CBSA. Once they approve it, they'll send you to the CBSA cashier to make a payment against the entry. This cannot be done electronically at this time, and currently, the CBSA requires this to be done at the relevant port of crossing. Once payment is made, your goods will be released into Canada. 

It's a very manual and incredibly time-consuming process that is subject to change as CARM evolves.

Q: How are carriers affected by importers with no RPP?

While the time-consuming C-Type CAD process is unfolding, the carrier may be stuck at the border waiting for the release of the goods. This will likely result in carrier wait time charges and disruption in their deliveries (if other shipments are on the truck) and/or pickups. Carriers do have the option of taking the unreleased goods to a bonded warehouse if they are bonded carriers. Generally, the carrier charges to do so, and in many cases, importers with revoked RPP will see higher costs from the carrier.

Q: Will my carrier ask for proof that I have enrolled in RPP and have posted financial security before they pick up my goods?

Yes, we are already hearing and seeing this happen.

Q: How are bonded warehouses affected by importers with no RPP?

If unreleased goods are delivered to a bonded warehouse, the warehouse operator charges for placing those goods in their facility. They may also charge per day and per weight fees for goods that are in their possession for an extended period of time. These are known as storage charges, and as you might imagine, this results in higher costs for the importer. 

Bonded warehouses have limited space, and come April 20th, warehouse operators might have to refuse unreleased goods if their warehouses reach capacity. After a specified period, if the goods are still not released from CBSA, the warehouse operator can transfer the goods to a King’s Warehouse, which is operated by the CBSA to store seized, forfeited, detained, abandoned, or unclaimed goods. 

The CBSA imposes storage charges on unreleased goods put into a King’s Warehouse. After a specified amount of time, these unreleased goods are forfeited to the Crown. Once forfeited, goods are subject to disposal and can no longer be claimed by the importer or owner.

As you can see, there is no longer any time to wait to post a form of financial security in your portal. This is the end of the RPP grace period, and a failure to act now and get your financial security in place could end in significant monetary consequences for your business. 

Now is the time to get in touch with PCB for the support and guidance you need through this process. Not only can we help you post your financial security in the portal, but we can even help you acquire your bond. If you are a regular importer of any size, it has never been more important that you take this step and resolve this issue immediately. 

If you have any questions about your bond or the establishment and management of your financial security, please download our free Financial Security Guide below or get in contact with our CARM team today.

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