NFR CHALLENGES UNDER CARM
CBSA'S NEW CARM PROGRAM CREATING BIG PROBLEMS FOR NFR STRUCTURES
Canada Customs’s new electronic portal, implemented in October 2024 as part of the Canada Border Services Agency (“CBSA”) Assessment and Revenue Management (“CARM”) system, is throwing up significant challenges for direct sellers trying to ship products into Canada under a personal importation basis.
Specifically, CARM is now effectively requiring all non-resident direct sellers to register as importers and denying their access to easy courier shipments.
The focal point for any of these direct sellers will now be (1) becoming entrenched in the Canadian marketplace, and (2) having all of their dietary supplement products formally registered as Natural Health Products (“NHPs”) with Health Canada.
What is CARM and Why Does It Matter?
CARM is a new electronic portal designed to modernize how duties and taxes are assessed and paid on imported goods. Following its national rollout in October 2024, all commercial importers, whether resident or non-resident, are required to register in the CARM Client Portal to continue importing goods into Canada. Failure to register may result in goods being held at the border and not released into Canada.
How Did Direct Sellers Import NHPs? - In the Old Days
Before CARM, direct sellers relied on Health Canada’s Personal Use Importation Policy (“PUIP”) to import unlicensed NHPs into Canada. This approach, colloquially known in the industry as “Not for Resale” (“NFR”), was based on a long‑standing Health Canada policy that allows Canadian residents to self-import unlicensed NHPs for personal use.
Direct sellers typically structured their sales so that the products were sold on an FOB basis at an overseas warehouse and then shipped via courier into Canada. The courier handled customs clearance, and the CBSA generally permitted importation under the PUIP, provided there was no commercial intent.
Challenges of Using the PUIP in the CARM Era
While the PUIP framework remains in place, its practical application has become more complicated under CARM. We are increasingly seeing couriers require non-resident direct sellers operating under the PUIP to register as importers before processing shipments.
This signals a significant shift from how these transactions were handled in the past, and it remains uncertain whether the PUIP framework will remain viable in the future.
Direct sellers relying on the PUIP framework now face growing uncertainty in the shipping process, as couriers adopt a more cautious stance toward shipments from non-resident direct sellers. What had long been a stable, predictable pathway for moving products into Canada has become increasingly difficult to navigate.
The CBSA's new CARM program has created unexpected friction for direct sellers on NFR structures.
Affected businesses should consult experienced trade professionals!
Takeaways
With the rollout of CARM, direct sellers who rely on the traditional PUIP framework to move NHPs into Canada are facing uncertainty. As couriers now require non-resident direct sellers to register as importers, the courier channel, once the easiest route for personal-use importations, has become increasingly constrained.
Direct sellers looking to take advantage of the PUIP — or now simply remain operational in the CARM era — will need sound legal advice before continuing to rely on these models.
For help with PUIP or NFR structures, please click here.
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