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

If you import commercial goods into Canada and want to participate in RPP, you will generally need a written security agreement or cash deposit. An RPP bond is one way to meet that requirement and allows importers to obtain release before paying duties and taxes to the Canada Border Services Agency (CBSA).

Without RPP security, your shipments must generally be paid before release. With RPP, you follow the CBSA’s harmonized billing cycle and payment due dates.

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 financial guarantee. When goods arrive at the Canadian border, CBSA may release them before payment if the importer is enrolled in RPP and has sufficient security. The importer then follows the standard CARM billing cycle, with statements of account issued on the 25th and payment due 10 weekdays after the 17th of the calendar month.

The bond itself is documented on the D120 form, which is the standard CBSA security instrument. In normal circumstances, new written security agreements are posted electronically in CARM. CBSA may approve non-electronic methods only in limited exceptional circumstances.

Many RPP bonds are continuous bonds, but CBSA also permits financial security agreements for a set duration. If a security agreement is terminated, the security provider must notify the Minister at least 30 days before the termination date.

Who Needs an RPP Bond?

Any business that imports commercial goods into Canada and wants to defer payment of duties and taxes through RPP needs its own financial security. This includes:

• Direct importers who bring goods into the country under their own business number
• Importers with an RM account that want to participate in RPP

If you import even occasionally, RPP security is often operationally preferable to paying duties in full before release.

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 many Canadian importers, RPP security is a baseline operational requirement. If you are registering for CARM, reviewing your RPP financial security options is one of the first steps you should complete.

How RPP Bonds Work with CARM

The CBSA Assessment and Revenue Management (CARM) system is the digital portal that handles importer accounts, duty assessments, and financial security requirements. Since CARM became the official system of record on October 21, 2024, the normal process for posting new RPP security is 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 written security agreement. You apply through a financial security provider. Once approved, the agreement can be posted electronically in CARM.

4. Security is registered. Once the agreement or deposit is accepted and your enrolment is complete, your RPP security is active.

5. Pay duties on schedule. You continue importing and paying according to the CARM billing cycle.

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 written security agreement must correspond to at least 50% of the system-calculated amount based on your highest monthly accounts receivable over the previous 12 months.

CBSA calculates the required amount using your highest monthly accounts receivable with the CBSA over the previous 12 months. For a written security agreement, the agreement must cover at least half of that system-calculated amount.

Minimum and Maximum

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

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 accounts receivable balance 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 produced a highest monthly accounts receivable balance of $180,000. Fifty percent of that is $90,000. Your required bond amount is $90,000.

High-volume importer. Your busiest month produced a highest monthly accounts receivable balance of $1,200,000. 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, review the amount shown in CARM and confirm with your financial security provider what amount needs to be posted.

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 or fee you pay to the financial security provider. This is not the bond amount itself.

Premium Rate Ranges

Pricing varies by provider, bond amount, and the applicant’s financial profile.

Some providers may also charge minimum premiums or fees.

Cost Examples

Bond Amount	Provider pricing
$5,000	Varies by provider
$25,000	Varies by provider
$50,000	Varies by provider
$100,000	Varies by provider
$200,000	Varies by provider
$500,000	Varies by provider

For many importers, the annual premium is materially lower than posting the same amount in cash to the CBSA, but the exact cost depends on the provider and underwriting.

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 on the provider and the amount of security being requested.

Most providers will ask for:

• Business name and legal entity type (corporation, partnership, sole proprietorship)
• Business Number (BN9) as registered with the Canada Revenue Agency (CRA)
• CARM account details including your RM account number
• Owner or signing-officer information needed for underwriting
• Credit check authorization where required by the provider

For larger amounts, providers may also request additional business or personal financial information. Underwriting requirements and timelines vary by provider and applicant profile.

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 the system-calculated amount with the CBSA. A written security agreement must correspond to at least 50% of that amount, and you pay provider pricing rather than posting the full amount in cash.

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
Written security agreement ($100K)	At least $100,000 of security	Provider pricing varies	$0 cash posted to CBSA

With the cash deposit, $200,000 of your working capital is posted to the CBSA. With a written security agreement, you keep that cash available for business use, subject to provider pricing and underwriting.

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.

A cash deposit may make sense if you prefer to post cash directly or cannot obtain a written security agreement on acceptable terms.

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 join the Bondrail waitlist to start the process.

Step 3: Underwriting Review

The financial security provider reviews your application. Underwriting requirements and timelines vary by provider and the amount requested.

Step 4: Bond Issuance

Once approved, the financial security provider issues the agreement and posts or validates it in CARM.

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 total time from application to active security depends on provider underwriting and CBSA processing.

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 based on the review period defined in CARM.

If the revised amount is higher, you need to work with your financial security provider to increase the amount in CARM by January 15 of the next year.

If your revised amount is lower, you may choose to request a reduction.

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

Timing for increases depends on provider underwriting and CBSA processing.

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, work with your provider on termination. Under the Financial Security (Electronic Means) Regulations, the security provider must notify the Minister of the termination date at least 30 days in advance.

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. Security provider has 60 days to respond. Once the demand is received, the security provider has 60 days either to pay the amount demanded or provide information to rebut the demand.
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 obtain future bonding may become more difficult or more expensive
• 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, because available options depend on the circumstances and current CBSA processes.

Related Bond Types

If your business operates bonded facilities or carriers, you may need additional customs bonds alongside your RPP bond:

• Bonded warehouse bond — required if you operate a CBSA-licensed bonded warehouse to store dutiable goods without immediate payment
• Customs bonds overview — a full overview of all bond types required under the Canadian customs regime

Get Your RPP Bond

An RPP bond is a common way to satisfy the CBSA’s financial security requirement for importers that want to participate in RPP.

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.

Join the Bondrail waitlist for RPP bonds to review your options for posting RPP security.

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