TEMPORARY IMPORTS, ATA CARNET
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. In general, companies have three options when considering temporary importation: ATA Carnet, Temporary Importation Under Bond (TIB) and a consumption entry with duty drawback. The ATA Carnet system is the most user-friendly and structured 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.
What Is An ATA Carnet?
A Carnet (a. k. a. "Merchandise Passport") is a document that facilitates the temporary importation of products into foreign countries by eliminating tariffs and value-added taxes (VAT) or the posting of a security deposit normally required at the time of importation. 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 carnet also serves as the registration of goods for the U.S. and eliminates the need for a U.S. Customs form 4455. Carnets cover most personal and professional goods, including commercial samples, professional equipment and goods intended for use at trade shows and exhibitions. They do not cover consumable or disposable items.
To encourage world trade and reduce trade barriers created by different national customs regulations, the World Customs Organization adopted the "Customs Convention on the ATA Carnet for the Temporary Admission of Goods" in December 1961. The initials "ATA" are from the French and English words "Admission Temporaire/ Temporary Admission."
The U. S. Council for International Business (USCIB) was appointed by the U. S. Treasury Department to be the sole guarantor of ATA Carnets in the United States. The USCIB's ATA Carnet Internet home page contains information on how to apply for and receive a carnet. The USCIB has two officially appointed Carnet Service Providers: Corporation for International Business and Roanoke Trade Services. Both Service Providers have online applications as well.
What Are The Benefits Of A Carnet?
With an ATA Carnet, U. S. exporters enjoy the following benefits:
 | no duties and taxes during import or re- entry into the United States; |
| no temporary import bonds; no need to register the goods when departing the United States; |
| unlimited reuse for all products listed on the carnet for up to one year; |
| coverage of most business-related items; and recognized by 65 countries. |
Where Can I Use A Carnet?
The ATA Carnet is accepted by sixty-five countries and twenty-seven territories worldwide. For a complete list of countries and territories that accept carnets, contact the USCIB at (866) 7UNLOCK.
How Do I Apply For A Carnet?
Application forms consist of a general list of products to be shipped and the ATA Carnet application - both are available on the USCIB's website or by contacting a carnet Service Provider: or Roanoke Trade Services.
To apply for an ATA Carnet, follow these three basic steps:
| Prepare a general list of shipment products; |
| Complete the ATA Carnet applications; and |
| Provide a security deposit. |
Please see the checklist for preparing to apply for a Carnet for more information.
All carnet applicants must furnish the USCIB with a security deposit in the form of cash or bond. 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. Claims prevention information can be downloaded from the Carnet Information Kiosk.
The amount of the security deposit is based on the total value of the general list, with a typical security amount of 40 percent of the value of the General List. Goods traveling to Israel and the Republic of Korea require a 100 percent security.
How Much Does A Carnet Cost?
The value of the shipment determines carnet processing fees. Basic processing fees range from $200 to $330. Additional charges of between $50 and $150 can be added for expedited service.
Electronic applications received before 4:00 PM central time will be processed within 24 hours at no additional charge. A $50 fee is charged on 24-hour service for applications received after 4:00 PM central time. Contact a carnet consultant at (800) ATA-2900 for more details and advice on the most cost-effective option for your business.
How Long Does It Take To Process A Carnet?
It can take 2-3 business days to process a carnet application. Same-day pick-up and delivery is available for an extra charge. Most electronic applications, however, can be processed by the following day for no additional charge if they are received by 4:00 PM central time.
What If I Lose My Carnet Documents?
The USCIB offers warranty coverage for lost, stolen, or destroyed carnet forms for a fee of $15.00. 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. This insurance is only available by applying online. Additional details can be found on the ATA Carnet website.
If A Country Does Not Accept Carnets, What Are My Alternatives?
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. A partial list of countries that do not accept carnets can be found in USCIB's website.
What Are My Options For Temporary Importation Under NAFTA?
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 not accepted in Mexico. In order to facilitate and expedite temporary importation into Mexico, it is helpful to plan ahead. Most temporary imports require the services of a Mexican customs broker and may involve the posting of temporary import bonds (TIBs). The 15 percent Value Added Tax (IVA) for Mexico does not apply to temporary imports.
ATA Carnets are accepted in Canada. However, most goods are already traded duty- free between the United States and Canada, which makes carnets less important than in other countries. There are 57 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 57 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.