Temporary importation provisions are an important tool for companies who want to show their products in foreign markets or for professionals bringing tools of the trade into a foreign country for a limited period of time. Companies have several options when considering temporary importation. These include: ATA Carnets, Temporary Importation Bond (TIB) and entry with duty drawback. There is also provision for bringing “tools of trade” allowed for in the North American Free Trade Agreement. The ATA Carnet system is the most user-friendly system of temporary importation; however, there are a number of countries that do not accept carnets. In these countries, companies can post TIBs or apply for a duty drawback as an alternative means to duty free importation.
ATA Carnet (a. k. a. "Merchandise Passport") is an international customs document accepted by 80 countries and territories. ATA Carnet allows temporary entry of goods, duty-free and tax-free, whether shipped or hand-carried. ATA Carnet system was established by international ATA convention and is governed by World Customs Organization and International Chamber of Commerce and its World Chambers Federation to encourage world trade and reduce trade barriers created by different national customs regulations. The initials "ATA" are from the French and English words "Admission Temporaire/ Temporary Admission." U.S. Customs appointed US Council for International Business as National Guaranteeing Association (NGA).
Companies are required to present carnet documentation to U. S. Customs when leaving the country and upon entry into and exit from the foreign country. Upon return, the company must again show the carnet document to U. S. Customs for duty-free entry back into the United States. The ATA carnet also serves as the registration of goods for the U.S. and eliminates the need for a U.S. Customs Certificate of Registration Form 4455. ATA Carnets cover most personal and professional goods, including commercial samples, professional equipment and goods intended for use at trade shows and exhibitions. The ATA Carnets do not cover consumable or disposable items. They are also not recommended for situations where some of the products taken abroad may be sold in a foreign country. However, they are particularly useful when a product may “travel” to several countries prior to being returned to the United States.
Where Can I Use A Carnet?
The ATA Carnet is accepted by many countries and territories worldwide. For a complete list of countries and territories that accept carnets, contact information as well as countries not covered by the ATA carnets contact US Council for International Business:
ATA Carnet Department
1212 Avenue of the Americas
New York, NY 10036
Telephone: (866) 786-5625 or (800) 5DUTYFREE (538-8937);
Fax: (212) 944-0012
Note of caution: ATA Carnets DO NOT exempt the holders from obtaining necessary licenses or permits.)
ATA carnet application is a three-part process.
ATA Carnets may be obtained from the USCIB or from two officially-appointed Carnet Service Providers: Boomerang Freight Solutions and Roanoke Trade Services. In addition to the three Carnet issuing entities, exporters may contact other parties including brokers and freight forwarders who can assist with the preparation of an ATA carnet; however, the carnets will be issued by the designated service providers.
Exporters can obtain ATA Carnets and carnet bonds services via an online application process.
All carnet applicants must be furnished with a security deposit in the form of cash or bond by USCIB or the two service providers. The deposit acts as collateral and will be drawn upon to reimburse the USCIB in the event it incurs a liability or loss in connection with the carnet or its use. Cash deposits are returned in full and bonds are terminated once the original carnet has been returned and no claims are anticipated by the USCIB.
The value of the shipment determines carnet processing fees.
It can take two business days to process a carnet application if the application and security deposit are received by 4:00 pm ET. Applications received after 4:00 pm will be processed the following business day or will incur an expedited service fee.
The USCIB or its two designated service providers offer warranty coverage for lost, stolen, or destroyed carnet forms for a fee. The USCIB will issue an immediate replacement to customers with this warranty. Full terms and conditions of carnet warranties are available when submitting an application electronically, or by contacting an ATA Carnet consultant for details.
Carnets are NOT recommended for goods intended for sale. Should some of the goods be sold, Carnets are subject to a penalty equal to 10% of the amount of the duties and taxes in addition to the payment of duties and taxes for the goods sold off. A USCIB Claims Handling Fee may also apply.
For goods sold off ATA Carnet, a company needs to contact a local customs office to determine the most appropriate procedure. Some countries such as U.K. and Australia tightly control the sale of goods accompanied by carnets. Generally, local customs will request that the goods and ATA Carnets be brought to the local office prior to Carnet expiration so that the Carnet may be properly discharged and duties, taxes, and penalty paid.
Companies are advised to obtain an itemized customs receipt noting the items sold, amount paid, and ATA Carnet number. The original ATA Carnet and a copy of the Customs receipt need to be sent to the USCIB. It is important to retain a clear copy of the Carnet for the record.
If you have questions, contact USCIB Claims Administration at 212.703.5075 or firstname.lastname@example.org.
For countries that do not accept carnets, companies can apply for a Temporary Importation Bond (TIB), documents which can be purchased from a customs broker at the time of entry. TIB deposits and payments are usually made in cash in the currency of the importing country. TIBs must also be posted each time a product is imported. Fees for posting TIBs vary across countries and depend on the type of product being imported. Companies should expect that it might take several months before the cash deposits are refunded.
Another alternative to a carnet is the duty drawback for temporary imports, a process whereby importers register the goods at the time of entry into a foreign country by making a consumption entry and deposit the applicable duties and taxes with the importing country's customs authority. Like TIBs, the deposit and payment are usually made in cash and in the currency of the importing country. At the time of departure, the foreign customs authority will inspect and collect the appropriate paperwork for the product. Companies will receive a partial refund of the duties and taxes posted under the duty drawback in the future.
Companies should contact a customs broker in the importing country to post TIBs or apply for a duty drawback.
Companies that need to send temporary exports can take advantage of special provisions under the North American Free Trade Agreement (NAFTA) and avoid paying duties. NAFTA requires Canada, Mexico and the United States to grant duty- free temporary admission to certain classes of goods imported from another NAFTA country. In addition, under its service provisions, the agreement provides "tools of the trade" arrangements that allow U. S. companies to send their service personnel, along with their tools, to a NAFTA country. The goods do not have to originate in a NAFTA country to qualify for temporary entry provisions.
ATA Carnets are accepted in Canada. However, many goods are already traded duty- free between the United States and Canada, which makes carnets less important than in other countries. In addition, there are many categories of goods for which Canada permits temporary entry under a special schedule if the exporter completes a Temporary Admission Permit, and, where required, a Canada Customs Coding Form. Many temporary imports fall into one of these categories and can be imported duty-free. Temporary imports must also be classified under the Harmonized Tariff System (HTS) number associated with temporary imports into Canada, under Chapter 98.