If you're reading this, there's a reasonable chance you just logged into the CARM Client Portal and saw something you didn't expect — a Late Accounting Penalty on your Statement of Account, or a Daily Notice flagging an overdue Commercial Accounting Declaration. You're not alone. CBSA began actively enforcing Late Accounting Penalties (LAPs) again on January 19, 2025 after the CARM transition grace period ended, and enforcement has tightened further since January 2026 when the last remaining transition measures expired.
The penalty itself is relatively small — $100 per overdue CAD. But for an importer doing 100 shipments a month, a systemic issue that causes multiple LAPs before anyone notices can quickly become a five-figure problem. And missed LAPs don't just cost money: they signal poor compliance to CBSA, compound with interest, and in the worst case can result in your account being sent to CRA for collection.
This article covers what a LAP actually is, what triggers it, the exact deadline and how it's calculated, how to avoid them systematically, how to request a waiver if you got hit, and how to dispute a penalty you believe was issued in error.
What a Late Accounting Penalty is
A Late Accounting Penalty is the consequence of failing to submit a Commercial Accounting Declaration (CAD) within the five-business-day prescribed window after your goods were released by CBSA.
The legal foundation is Section 32(3) and paragraphs 32(5)(a) and (b) of the Customs Act, combined with the CARM system's automated enforcement under Memorandum D17-1-5 (Registration, Accounting and Payment for Commercial Goods). The specific contravention code is C288 — the version used for goods valued greater than $3,300 — or C292 for lower-value shipments filed on Form B3 under the pre-CARM system (mostly historical now).
Under contravention C288, CBSA assesses $100 per overdue CAD. The penalty is automatically generated by the CARM system when a CAD passes the five-business-day deadline without being submitted. At non-automated ports, a border services officer can issue the penalty manually on a K23 invoice for the same $100 amount.
Important: CBSA does not issue a separate Notice of Penalty Assessment (NPA) for LAPs generated in CARM. The penalty appears on your account directly — typically on your Daily Notice first, then consolidated onto your monthly Statement of Account.
The five-business-day clock — exactly how it works
The clock that determines whether your CAD is "late" runs on specific rules that trip up importers who haven't read the regulations carefully.
Day 0 is the day of release. The day the CBSA releases your goods is not counted as day 1 — it's counted as day 0. The clock starts on the next business day.
Only business days count. Saturdays, Sundays, and statutory holidays don't count toward the five days.
Release on a weekend or holiday. If your goods are released on a Saturday, Sunday, or holiday, the accounting period starts on the first business day after release.
The deadline is end-of-business on day 5. The CAD must be submitted and accepted by the CARM system by the end of the fifth business day following release.
Worked example: Your goods are released at 2:00 PM on a Wednesday, April 2. That's day 0. The five-business-day clock runs:
- Thursday April 3 (day 1)
- Friday April 4 (day 2)
- Monday April 7 (day 3)
- Tuesday April 8 (day 4)
- Wednesday April 9 (day 5)
The CAD must be submitted and accepted by end of business on Wednesday April 9. If it isn't, CARM automatically generates a $100 LAP on day 6.
Important caveat: "Submitted and accepted" is not the same as "submitted." If your broker transmits a CAD on day 5 and CARM rejects it for a validation error (missing field, invalid HS code, incorrect business number), the CAD is not considered filed until it's resubmitted and accepted. You can submit on time and still get a LAP if the filing fails validation and the corrected resubmission comes in on day 6.
This is one of the quieter traps in the CARM system. A CAD that looks filed might be sitting in rejection, and neither you nor your broker may realize until the penalty hits.
What triggers a LAP — the six common causes
In CBSA's own analysis of why CADs aren't being submitted on time, six causes come up repeatedly. Any of them can generate a LAP.
1. Importer not registered in the CARM Client Portal. As of January 1, 2026, a customs broker's BN can no longer be used to release or account for commercial goods on an importer's behalf in most scenarios. If the importer hasn't registered in CARM, the broker can't file a valid CAD — and the release sits in overdue status generating LAPs until registration is complete.
2. Missing delegation of authority. Even if the importer is registered in CARM, the broker needs to be delegated authority in the portal to file CADs on their behalf. A delegation request that sits pending without the importer approving it blocks the broker from filing. LAPs accumulate while the delegation is stuck.
3. No financial security posted (RPP). Without a posted bond or cash deposit, importers can't use Release Prior to Payment (RPP) and are required to file C-Type CADs with duties paid upfront. If an importer without RPP has shipments released under contingency and doesn't follow through with the C-Type CAD within the prescribed time, LAPs are triggered.
4. CAD rejected by CARM validation. As mentioned above, a submitted but rejected CAD is not an accepted CAD. Common rejection reasons include wrong HS format, expired permits, missing PGA (Participating Government Agency) data, incorrect conveyance reference, or valuation fields that don't match release records.
5. Broker workflow issues. Brokers process hundreds or thousands of shipments per day. A shipment can fall through the cracks — misfiled, assigned to the wrong account, or held pending a client question that wasn't responded to. Without systematic tracking, the first time the importer hears about the problem is when the LAP appears.
6. System or connectivity issues. CARM itself occasionally has outages, slow response times, or rejects CADs due to CBSA-side errors. In theory these trigger the waiver path (covered below); in practice, importers still have to actively request the waiver — the penalty doesn't cancel itself.
How to find LAPs on your account
LAPs show up in three places in the CARM Client Portal, and it's worth checking all three monthly.
Daily Notice (DN). If you're signed up to receive Daily Notices via EDI, LAPs will appear on the DN the day after they're assessed. Non-EDI users can see the same information in real time under the "Transaction History" page in the portal. Each LAP shows as a separate transaction line with the contravention code and amount.
Statement of Account (SOA). On the 25th of each month, your monthly SOA will consolidate all transactions from the billing period, including any LAPs assessed during that period. The SOA shows the total LAP amount as part of your total payable.
Invoices section. Under Financial Information → Invoices in the portal, LAPs are posted as K23 miscellaneous invoices. Each invoice lists the specific CAD that triggered it and the date.
Most importers miss LAPs entirely because they don't review their DNs, don't drill into the SOA transaction history, and treat the monthly payable as a single number. If you want to know what's happening on your account, you have to actually look.
How to avoid LAPs systematically
The best outcome is never getting a LAP in the first place. That requires operational discipline, not just good intentions.
1. Confirm registration and delegation before any goods are released. If you're a new importer, complete your CARM portal registration and delegate authority to your broker before the first shipment ships — not after. Delegation requests can take days to process if the broker is slow to initiate or the importer is slow to approve.
2. Post financial security well before you need RPP. The financial security posting process involves either a surety bond (which can take 2-3 weeks to establish) or a cash deposit (which can be done quickly but ties up working capital). Don't wait until your first shipment is at the border to start this process.
3. Track every release and its CAD deadline. Every time goods are released under your business number, the five-business-day clock starts. Whoever is responsible for CARM oversight (usually the BAM) should have a list of active shipments, their release dates, and their CAD deadlines. If you don't have this list, you can't catch a problem before the deadline.
4. Monitor CARM rejections in near-real-time. Your broker should flag any CADs that fail CARM validation immediately. If they're not telling you, ask them to. Rejected CADs typically have a path to resolution within hours if the problem is identified quickly — but that only works if someone's watching.
5. Review your Daily Notice daily, or Transaction History weekly. The earliest warning of a missing CAD is the absence of it on your DN during the days it should be filed. If a shipment was released April 2 and by April 9 no CAD appears on any DN, something is wrong. A daily five-minute review catches this.
6. Build a monthly reconciliation between releases and CADs. At the end of each billing period, match every release against its corresponding CAD. Any release without a CAD, or any CAD filed after its deadline, is a LAP candidate. Catching them at the end of the month lets you request waivers while the evidence is fresh.
7. Maintain the broker relationship at a working level. If your broker has 200 clients and you don't have a direct contact who responds to your emails within hours, you're behind every other client who does. Ask your broker for named contacts, escalation paths, and SLA expectations. Hold them to those expectations.
8. Be careful with shipments near weekends and holidays. A release on Friday of a long weekend can compress the five-business-day window more than you expect. If you have high-volume or complex shipments, schedule them for Tuesday or Wednesday releases when possible, to give maximum time inside the window.
What to do if you get a LAP
If you've already been assessed a Late Accounting Penalty, there are three paths forward depending on the circumstances.
Path 1: Pay and move on
If the LAP was legitimately triggered (your broker missed the deadline, a CAD was late for reasons within your control, the rejection that caused the delay was preventable), the cleanest path is often to pay the $100 and improve your processes going forward. Disputing legitimate penalties wastes time you won't recover.
The LAP appears on your SOA as part of your total payable for the billing period. Pay it with your regular monthly payment. That's the end of it.
Path 2: Request a waiver (before the penalty is assessed on the SOA)
If the cause of the late filing was genuinely outside your control — and specifically falls into one of the categories CBSA will accept — you can request a waiver before the penalty is assessed on your monthly SOA.
Waiver eligibility (from CBSA's published guidance):
- CBSA errors, such as system programming or keying errors
- CBSA delays, such as manual or automated processing delays
- Natural or human-made disasters (floods, ice storms, fires)
- Death or incapacity of a key employee responsible for reporting to CBSA
- Unanticipated civil disturbances or service disruptions (demonstrations, terrorism)
- Extraordinary circumstances not otherwise covered (such as your automated system being down for extended periods)
Waiver eligibility does NOT include:
- Neglect, oversight, or lack of awareness on the part of the importer or broker
- "We forgot" or "our broker missed it"
- Staffing shortages that don't rise to incapacity
- General busyness
The waiver process:
- Complete Form E571 (Late Accounting Penalties — Application for Waiver, Cancellation)
- Attach supporting documentation for the cause (system outage records, medical documentation, disaster news coverage, whatever proves the circumstances)
- Submit to the releasing office or to CBSA headquarters (Brokers Licensing)
- Wait for review
The waiver must be requested before the penalty is formally assessed on the monthly K84 or SOA. Once it's on the monthly statement, you move to Path 3 (cancellation) instead.
Path 3: Request a cancellation (after the penalty is assessed)
If the penalty has already been assessed on your monthly statement, you can request cancellation rather than waiver. The evidentiary bar is similar, but the process shifts.
Cancellation deadlines:
- 90 days from the date the penalty was assessed
- Extensions under Section 129.1 of the Customs Act are possible but require separate application
- Applications received outside 90 days without an approved extension are denied
The cancellation process:
- Pay the penalty amount first (this is required — you cannot dispute while unpaid)
- Keep proof of payment
- Complete Form E571 with cause, circumstances, and supporting documentation
- Submit to: Recourse Directorate, Canada Border Services Agency, 333 North River Rd, Tower A, 11th Floor, Ottawa, ON K1A 0L8 (fax: 343-291-7239)
- Include proof of payment with the submission
- Wait for review — typical response time is 60-120 days
If cancellation is approved, the penalty is refunded to your account (CARM automatically applies the credit in real time or during the nightly program run).
If cancellation is denied, you can appeal under Section 129.1 of the Customs Act by filing a request for a Minister's decision within 90 days of the denial. This can be submitted through the CARM Client Portal's appeal mechanism.
When CBSA will likely deny a waiver or cancellation
From the published guidance and practical experience, waivers and cancellations are denied when:
The cause was neglect or oversight. "We had a lot of shipments that month" is not a waiver reason. "We didn't know about the deadline" is not a waiver reason. "Our broker missed it" is not a waiver reason — CBSA considers the broker to be your agent, and their errors are your errors for penalty purposes.
The importer had sufficient time to apply for a waiver but didn't. If the LAP was on your Daily Notice for three weeks before the monthly statement was issued and you didn't apply for a waiver during that window, a cancellation request after the fact is unlikely to succeed.
Insufficient documentation is provided. Waiver and cancellation decisions depend on evidence. A letter saying "there was a system outage" without any supporting documentation from the system provider, CBSA notice, or independent record is not enough.
The penalty was the result of a broker's business failure. If your broker went out of business, lost staff, or had internal workflow problems that caused missed filings, those are not considered circumstances beyond your control. You chose the broker. You delegated authority to them. The penalties are still yours.
The bigger compliance picture
A single $100 LAP isn't a disaster. But LAPs are a leading indicator of broader compliance problems, and CBSA treats them that way.
Repeat LAPs can affect your RPP privileges. The Release Prior to Payment program requires importers to demonstrate compliance. Patterns of late filing can result in RPP being suspended, which means every future shipment must pay duties at the border before release — massively disrupting your supply chain.
LAPs feed into AMPS escalation. While the $100 LAP under C288 is a fixed amount, patterns of non-compliance flagged by LAPs can lead CBSA to prioritize your account for trade compliance verification. That verification can surface AMPS penalties under C080 (origin), C082 (tariff classification), or C150 (value for duty) at $500-$1,500 per occurrence, up to $400,000 for the reassessment period.
Unpaid LAPs trigger collection action. Under CBSA guidance, a CAD accounted more than 31 days after the date of release can result in the importer's account being sent to CRA for collection. Once at CRA, the account is subject to CRA's own collection powers, which can include garnishing payments from suppliers, placing liens on assets, and affecting credit ratings.
LAPs are visible to CBSA verification officers. When trade compliance officers are deciding which importers to audit, compliance history — including LAP frequency — is one of the signals they look at. A clean LAP record looks like a well-run operation. A pattern of LAPs looks like a target.
Special scenarios worth knowing about
A few edge cases deserve specific attention because they affect different importer segments.
Courier Low Value Shipments (CLVS). For commercial goods imported under the CLVS program, LAPs apply to the Type F consolidated CAD that CLVS participants file monthly. The deadline structure is similar but follows the CLVS-specific filing cycle.
Non-resident importers (NRIs). NRIs are subject to the same LAP framework as resident importers. The fact that the NRI is foreign doesn't reduce exposure. An NRI whose broker files late gets a $100 LAP on the NRI's Canadian account.
Warehouse entries. For goods entering customs bonded warehouses, LAP rules apply differently depending on whether the warehouse entry is reported on a Type AB CAD or through other mechanisms. Your broker should be specifically aware of warehouse LAP rules if you use bonded warehousing.
Corrections and adjustments. A LAP is assessed on the original CAD filing, not on corrections or adjustments filed later. If you correct a CAD within the correction window, the correction doesn't create a new LAP exposure — but the original late filing penalty stays on your account unless waived.
Post-clearance amendments. If a CAD is withdrawn and refiled (under the process described in Memorandum D17-2-3), the LAP calculation can get complex. CBSA generally treats the accepted CAD as the date of record for LAP purposes, but edge cases exist where withdrawal and refiling can trigger additional LAPs if the refiling window is missed.
How to avoid ever seeing another LAP
The operational discipline described above works, but it requires consistent attention from someone in your organization. For high-volume importers, that's often impractical with manual processes.
This is where systematic oversight tools — including ClearBorder — are built to help. A monthly report that automatically shows every release, its corresponding CAD, the filing date relative to the five-business-day deadline, and any LAPs already assessed is the cleanest way to catch these issues before they compound.
The goal isn't just to avoid the $100 penalty on a single CAD. It's to ensure that in three years, when CBSA runs a trade compliance verification, your account shows zero or near-zero LAPs, demonstrating that you run a compliant operation. That compliance history becomes part of your defense in any future reassessment.
The bottom line
LAPs are a $100-per-CAD penalty assessed automatically by the CARM system when a CAD is filed more than five business days after release. They're small individually but can compound quickly, they're harder to get waived than most importers expect, and they signal broader compliance issues to CBSA.
To avoid them:
- Complete CARM registration and broker delegation before shipments release
- Post financial security well in advance of need
- Track every release and its five-business-day deadline
- Monitor CAD rejections in near-real-time
- Review your Daily Notice or Transaction History regularly
- Reconcile releases against CADs at month-end
To handle them if they appear:
- Review the cause honestly — was it within your control or not?
- If outside your control and fresh, file Form E571 for a waiver before the penalty is assessed on the monthly SOA
- If already on the SOA, pay the penalty, file Form E571 for cancellation within 90 days
- Document everything
- Use the outcome to improve your process
A clean LAP record isn't just about avoiding the small penalties. It's a compliance signal that affects everything from RPP privileges to CBSA verification priority to your Section 17 defense file. Treating LAP prevention as a priority — not a minor nuisance — is what separates well-run import operations from the ones that end up on CBSA's watch list.
Sources and references:
- Customs Act, Section 32(3) and paragraphs 32(5)(a) and (b)
- Customs Act, Section 3.3 (waiver authority)
- Customs Act, Section 129.1 (appeal extensions)
- CBSA Memorandum D17-1-5: Registration, Accounting and Payment for Commercial Goods
- CBSA Memorandum D22-1-1: Implementing the Administrative Monetary Penalty System (AMPS)
- AMPS Contravention C288: Failure to account for imported goods within prescribed time
- AMPS Contravention C292: Failure to account under pre-CARM B3
- CBSA Customs Notice 25-08: Overdue Releases/Missing Final Accounting
- CBSA Customs Notice 25-16: Late Accounting Penalties – Registration and Delegation of Authority
- Form E571: Late Accounting Penalties Application for Waiver, Cancellation
This article is not legal advice. For specific situations, consult a licensed Canadian customs broker or customs lawyer.
Try ClearBorder
Catch late filings before they become penalties. ClearBorder tracks every release against its 5-business-day CAD deadline and alerts you before time runs out.