by Michael Sherbo, Director of Appeals, Dominion Customs Consultants Inc.
In January 2016, the CBSA (Canada Border Services Agency) introduced their ARL (Accounts Receivable Ledger) system. It is designed to offset an importer’s refunds by posting credits to the importer’s account and replaces the previous system of issuing refund cheques.
Prior to ARL, importers paid the duties owed. Later, if applicable, the importer would file for a refund. If the CBSA agreed, they would generate a DAS (Detailed Adjustment Statement) to show they had granted a refund to the importer. This process could take anywhere between one to two months. Importers might then wait an additional three weeks to actually receive their cheque. This meant importers were usually looking at up to three months to actually receive their cheque.
ARL streamlined this entire process. Now, credits to an importer’s account usually show up by the next day. Because the refund comes in the form of a credit against the duties owed by the importer – it is not a cash payment – importers can access the use of the money sooner, offering them a quick improvement to their cash flow.
The CBSA will make an exception in cases where an importer has a large credit, usually if the credit is more than two months of duties payable. If the importer requests a cheque, the CBSA can send one to the importer to shorten the time needed to level out the duties owed.
One of the challenges of ARL is visibility to an importer’s account. Currently, the only visibility to an account is shared between the importer and the CBSA. If the importer uses a service provider such as a customs broker or a consultant, those third-parties will have visibility only to the parts they’ve worked on. If the importer also uses a second service provider, they will see only the information they’ve worked on. No-one has any visibility into the other’s activity.
Add a savvy importer to the mix, one who is filing their own refunds, and none of the service providers will have any visibility to any credits that may be in the account.
The CBSA is working on remedying this. They are looking to implement different upgrades to ARL. One of the next improvements will be for service providers to have increased visibility into their clients’ account and balance.
In the meantime, importers need to work closely with their service providers. They need to make sure they receive accurate and prompt statements in order to track that all their credits are accounted for as quickly as possible. This is because the account can quickly become overpaid if brokers constantly pay their client’s statements only to leave refunds and credits in the account, never to come off.
Service providers automatically receive their own daily notice and statement of account on behalf of their clients.
Importers can make sure they see the previous month’s refund processed as quickly as possible by setting themselves up to receive their own daily notice and statement. There are two ways to do this. One – they can set themselves up directly with the CBSA. Although more practical, this is the more costly route. Two – they can engage a third-party service provider to obtain daily notice or statement of account information. This is the less expensive route and can be put into place with only nominal fees attached.
To find out how you can lower your landed costs, contact Howard Rosenberg, Account Executive, Dominion Customs Consultants Inc.; at email@example.com; or 1-888-888-3443 x 239.