RPP Bond (Release Prior to Payment) — Canada Customs Bond

If you import commercial goods into Canada, you almost certainly need an RPP bond. It is the most common type of customs bond in the country, and it is the mechanism that allows importers to take possession of their goods before paying duties and taxes to the Canada Border Services Agency (CBSA).

Without one, your shipments sit at the border until every dollar of duty and GST is paid in full. With one, your goods are released immediately and you settle your account on the CBSA’s standard payment terms.

This guide covers exactly what an RPP bond is, how the bond amount is calculated, what it costs, and how to get one set up on your CARM account.

What Is an RPP Bond?

RPP stands for Release Prior to Payment. An RPP bond is a type of surety bond — a three-party agreement between the importer (the principal), the CBSA (the obligee), and a surety company (the guarantor). The surety company issues the bond on behalf of the importer, guaranteeing the CBSA that all duties, taxes, and fees owed on imported goods will be paid according to the terms of the Customs Act.

In practical terms, the RPP bond functions as a line of credit backed by a surety. When goods arrive at the Canadian border, CBSA releases them to the importer on the strength of the bond. The importer then has until the standard payment due date — typically the 25th of the month following the month of accounting — to remit duties and GST.

The bond itself is documented on the D120 form, which is the standard CBSA security instrument. Since the launch of the CARM (CBSA Assessment and Revenue Management) portal, D120 bonds are filed and managed electronically rather than on paper.

RPP bonds are continuous bonds, meaning they do not expire on a fixed date. They renew automatically each year and remain in effect until either the importer or the surety cancels them with 30 days’ written notice.

Who Needs an RPP Bond?

Any business that imports commercial goods into Canada and wants to defer payment of duties and taxes needs an RPP bond. This includes:

• Direct importers who bring goods into the country under their own business number
• Customs brokers who clear goods on behalf of their clients (brokers post their own bonds to cover client accounts)
• Businesses with an RM (importer) account registered with the CBSA

If you import even occasionally, an RPP bond is effectively mandatory for normal commercial operations. The alternative — paying duties in full before your goods are released — is operationally impractical for most businesses.

There are limited exceptions. Casual importers bringing in one-off personal shipments do not need an RPP bond. And businesses that choose to post a cash deposit with the CBSA instead of a surety bond can technically avoid getting one, though this approach ties up significantly more working capital (more on that below).

For the vast majority of Canadian importers, the RPP bond is a baseline requirement for doing business. If you are registering for CARM, posting financial security in the form of an RPP bond is one of the first steps you will need to complete.

How RPP Bonds Work with CARM

The CBSA Assessment and Revenue Management (CARM) system is the digital portal that handles all importer accounts, duty assessments, and financial security requirements. Since CARM’s full launch, the RPP bond process is entirely electronic.

Here is how the process works:

1. Register for a CARM account. You need a CARM Client Portal (CCP) account linked to your business number (BN9). This is your gateway to managing your import program. See our CARM registration guide for step-by-step instructions.

2. Check your security requirement. Once your account is active, the CARM portal displays your calculated financial security requirement. This is the minimum bond amount the CBSA requires based on your import history.

3. Obtain a surety bond. You apply for an RPP bond through a surety provider. The surety company underwrites your application, issues the bond, and files the D120 form electronically with the CBSA through the CARM portal.

4. Bond is registered. Once the D120 is filed and accepted, your bond is active. Your goods can now be released prior to payment at any Canadian port of entry.

5. Pay duties on schedule. You continue importing and paying your monthly duty statements by the 25th of the following month. As long as you pay on time, the bond simply sits in the background as your guarantee to the CBSA.

The CARM financial security guide covers the portal-side details in depth, including how to monitor your security status and handle adjustments.

RPP Bond Amount Calculation

The CBSA does not pick an arbitrary number for your bond amount. There is a specific formula, and your CARM account shows you the calculated result.

The 50% Rule

Your RPP bond amount must be at least 50% of your highest monthly accounts receivable (duties + GST) with the CBSA over the past 12 months.

Accounts receivable in this context means the total duties, taxes, and fees assessed on your imports in a given calendar month. The CBSA looks at the past 12 months of data and identifies your peak month. Your bond must cover at least half of that peak.

Minimum and Maximum

• Minimum bond amount: $5,000 per RM (importer program) account
• Maximum bond amount: $10,000,000

Even if your import volume is very low, you cannot post a bond for less than $5,000. On the other end, the CBSA caps the requirement at $10 million — though very few importers reach that threshold.

Calculation Examples

Here are three scenarios to illustrate how the formula works in practice:

Small importer. Your highest monthly duty assessment over the past year was $6,000. The 50% calculation gives you $3,000, but the $5,000 minimum applies. Your required bond amount is $5,000.

Mid-size importer. Your peak month saw $180,000 in duties and GST. Fifty percent of that is $90,000. Your required bond amount is $90,000.

High-volume importer. Your busiest month generated $1,200,000 in assessed duties and taxes. Fifty percent is $600,000. Your required bond amount is $600,000.

Where to Find Your Amount

Log into the CARM Client Portal and navigate to your financial security section. The portal displays your calculated security requirement based on your actual import data. If you are a new importer with no history, you will need to estimate your expected monthly duty volume and work with your surety provider to determine an appropriate starting bond amount.

You can use our duty calculator to estimate your monthly duty obligations and get a sense of what bond amount you will need.

How Much Does an RPP Bond Cost?

The cost of an RPP bond is the annual premium you pay to the surety company. This is not the bond amount itself — it is the fee the surety charges for guaranteeing your obligations.

Premium Rate Ranges

RPP bond premiums typically range from 0.5% to 1.5% of the bond amount per year, depending on the size of the bond and the financial strength of the applicant. Most importers with reasonable credit pay between 1.0% and 1.5%.

There is also a minimum annual premium, which typically falls between $350 and $450 depending on the surety company.

Cost Examples

Bond Amount	Estimated Annual Premium
$5,000	$350 - $450 (minimum premium applies)
$25,000	$350 - $450 (minimum premium applies)
$50,000	$500 - $750
$100,000	$1,000 - $1,500
$200,000	$2,000 - $3,000
$500,000	$3,500 - $5,000+

For most small and mid-size importers, the annual premium is a few hundred to a few thousand dollars — a fraction of the working capital you would otherwise need to lock up in a cash deposit.

What Affects Your Premium Rate

Several factors influence where you fall within the rate range:

• Bond amount: Larger bonds sometimes qualify for lower percentage rates
• Credit history: Applicants with strong credit scores get better rates
• Financial statements: Companies that can demonstrate solid financials may qualify for preferred pricing
• Industry and import type: Some product categories carry higher perceived risk
• Claims history: A clean track record with no prior bond claims helps

What You Need to Apply

The documentation required for an RPP bond depends primarily on the bond amount.

For Bonds Under $50,000

The underwriting process is straightforward. You typically need:

• Business name and legal entity type (corporation, partnership, sole proprietorship)
• Business Number (BN9) as registered with CRA
• CARM account details including your RM account number
• Personal information for the business owner(s) — name, date of birth, address
• Credit check authorization — the surety will run a personal credit check on the principal owner(s)

That is it. For smaller bonds, no financial statements are required. Approval is based primarily on the personal credit of the business principals. Many applications in this range are approved within 24 to 48 hours.

For Bonds Between $50,000 and $100,000

In addition to the above, surety companies may request:

• Business financial statements — at a minimum, internally prepared year-end statements
• Personal net worth statement for the principal owner(s)

For Bonds Over $100,000

Larger bonds require more thorough underwriting:

• Reviewed or audited financial statements (CPA-prepared)
• Interim financial statements if the year-end is more than six months old
• Personal financial statements for all owners with significant equity
• Business plan or import projections in some cases

The general principle: the larger the bond, the more the surety needs to verify that you can actually pay your duty obligations. For the majority of importers — those needing bonds in the $5,000 to $50,000 range — the process is fast and documentation-light.

RPP Bond vs. Cash Deposit

The CBSA allows two forms of financial security: a surety bond or a cash deposit. Here is why the surety bond is almost always the better choice.

The Working Capital Math

A cash deposit requires you to post 100% of your highest monthly accounts receivable with the CBSA. A surety bond covers the same obligation at 50% of that amount, and you only pay a small annual premium rather than locking up the full sum.

Consider a mid-size importer with a peak monthly duty bill of $200,000:

Option	Amount Required	Annual Cost	Capital Tied Up
Cash deposit	$200,000	$0 (but opportunity cost)	$200,000
Surety bond ($100K)	$100,000 bond amount	$1,000 - $1,500 premium	$0

With the cash deposit, $200,000 of your working capital is sitting in a CBSA account earning nothing. With the surety bond, you pay roughly $1,000 to $1,500 per year and keep that $200,000 available for inventory, payroll, equipment, or any other business purpose.

Other Advantages of a Surety Bond

• Cash flow preservation. Your money stays in your business instead of sitting with the government.
• Faster setup for new importers. You do not need $200,000 in liquid cash to start importing.
• Professional relationship. A surety provider becomes a resource for managing your import compliance and bond requirements over time.
• Scalability. Increasing your bond amount as your business grows is straightforward. Increasing a cash deposit requires finding and locking up additional capital.

The only scenario where a cash deposit might make sense is if you cannot qualify for a surety bond at all — for example, due to very poor personal credit or recent bankruptcy. Even then, it is usually worth working with a surety provider to explore options.

The Application Process

Getting an RPP bond is a straightforward process. Here is what to expect from start to finish.

Step 1: Gather Your Information

Before you start, have the following ready:

• Your Business Number (BN9)
• Your CARM Client Portal login credentials
• Your CARM-calculated security requirement (or an estimate of your expected monthly duties)
• Personal identification for the business owner(s)

Step 2: Apply with a Surety Provider

Submit your application to a surety provider. You will provide your business details, authorize a credit check, and specify the bond amount you need. For bonds under $50,000, this step can often be completed in minutes.

You can get a quote from Bondrail to start the process.

Step 3: Underwriting Review

The surety company reviews your application. For smaller bonds, this is primarily a credit check and takes 24 to 48 hours. For larger bonds requiring financial statement review, expect three to five business days.

Step 4: Bond Issuance

Once approved, the surety company issues the bond and files the D120 form electronically with the CBSA through the CARM system. You will receive a copy of the bond for your records.

Step 5: CBSA Registration

The CBSA processes the electronic D120 filing and registers the bond against your RM account. Once registered, your financial security requirement is satisfied, and your goods can be released prior to payment at any port of entry.

Step 6: Confirmation

Log into your CARM Client Portal to verify that your bond is reflected in your financial security status. Your account should show the bond amount and confirm that your security requirement is met.

The entire process — from application to active bond — typically takes two to five business days for standard applications. Urgent requests can sometimes be accommodated faster.

Annual Review and Adjustments

Your RPP bond is not a set-and-forget arrangement. The CBSA reviews security requirements annually, and your bond amount may need to change as your import volume fluctuates.

The October 20 Recalculation

Each year on October 20, the CBSA recalculates the required financial security for all importer accounts. This recalculation is based on your import activity over the preceding 12 months, applying the same 50% formula described above.

If your import volume has increased, the CBSA may notify you that your current bond amount is insufficient. You will need to work with your surety provider to increase the bond.

If your import volume has decreased, you may be over-bonded. You can request a reduction, which may lower your annual premium.

How to Increase Your Bond

Increasing an RPP bond is a standard process:

1. Contact your surety provider with the new required amount
2. The surety reviews the increase (additional underwriting may be required for significant jumps)
3. An amended D120 is filed electronically
4. The CARM portal reflects the updated bond amount

For modest increases that stay within your existing underwriting approval, this can be done in one to two business days.

How to Decrease Your Bond

If your import volume drops and you want to reduce your bond (and your premium), work with your surety provider to file an amended D120 reflecting the lower amount. The new amount must still meet the CBSA’s minimum calculated requirement.

Cancellation

If you stop importing and no longer need the bond, either you or the surety company can cancel with 30 days’ written notice to the CBSA. The bond remains in force during the notice period to cover any outstanding duty obligations. After the notice period expires, the bond is terminated and you are no longer liable for the annual premium going forward.

What Happens in a Bond Claim

Understanding the claim process is important, even though claims on RPP bonds are relatively uncommon for importers who pay their duties on time.

When Does a Claim Occur?

A bond claim is triggered when an importer fails to pay assessed duties and taxes by the due date and does not resolve the outstanding balance after CBSA’s standard collection efforts.

The Claim Process

1. Importer defaults on payment. The monthly duty statement goes unpaid past the due date.
2. CBSA collection efforts. The CBSA attempts to collect directly from the importer through standard notices and follow-up.
3. Formal demand on the surety. If the importer remains in default, the CBSA issues a formal demand to the surety company for payment under the bond.
4. Surety has 60 days to pay. Once the formal demand is received, the surety company has 60 days to remit payment to the CBSA for the outstanding amount, up to the bond limit.
5. Surety pays the CBSA. The surety company fulfills its obligation under the bond.
6. Indemnity recovery. The surety then turns to the importer (and any personal indemnitors who signed the indemnity agreement) to recover the amount paid. The importer is legally obligated to reimburse the surety in full.

Consequences for the Importer

A bond claim is a serious event:

• The surety will seek full repayment from you and any personal guarantors under the indemnity agreement
• Your surety bond may be cancelled, leaving you without the ability to import until a new bond is arranged
• Your ability to get future bonds will be severely compromised — claims are reported within the surety industry
• CBSA may impose additional requirements on your account, including increased security or cash-only terms

The best way to avoid a claim is straightforward: pay your duty statements on time, every time. If you anticipate cash flow difficulties, communicate with the CBSA proactively — payment arrangements are often possible before the situation escalates to a bond claim.

Get Your RPP Bond

An RPP bond is a foundational requirement for importing goods into Canada. It keeps your goods moving, preserves your working capital, and satisfies the CBSA’s financial security requirements at a fraction of the cost of a cash deposit.

Whether you are a new importer setting up your first CARM account or an established business looking to switch surety providers, we can help you get the right bond in place quickly.

Get a quote for your RPP bond — most bonds are issued within two business days.

For more on customs bonds in Canada, see our complete customs bond guide.