If you’ve ever dealt with shipping internationally, chances are you’ve at least heard of the word carnet. Chances are even greater that you’ve actually used a carnet if you’ve ever needed to temporarily ship something (or many things) out of the country but required it to be returned eventually.
Let’s take a closer look at carnets and how they could potentially benefit your business.
What is a carnet?
A Carnet (pronounced kar-nay) or ATA Carnet is an international customs and temporary export-import document used to clear customs in 87 countries and territories without paying duties and import taxes on merchandise that will be re-exported within 12 months. Think of carnets as a passport for goods.
What merchandise is (and is not) covered under a carnet?
Most goods and equipment are accepted under an ATA Carnet, including:
- Commercial Samples
- Professional Equipment (Tools of the Trade)
- Goods for Fairs & Exhibitions (limited to only 6 months)
Consumable items (such as agricultural products like food, seeds, and pesticides), explosives, disposables, and postal traffic cannot travel under an ATA Carnet. Goods that are intended for repairs, modifications or further manufacturing are also prohibited. The intention of the carnet is for the goods to be re-exported in the same (or nearly the same) condition as when they were imported.
What are the benefits of utilizing a carnet?
There are many benefits to using ATA Carnets, including:
- Eliminating duties and value-added taxes (VAT);
- Simplifying customs processes allowing a temporary exporter to use a single document for all customs transactions, as well as make arrangement in advance;
- Accepting unlimited entries and departures for up to one year;
- Facilitating re-entry into the U.S. by eliminating the need to register the goods with U.S. Customs and Border Protection (CBP) at the time of departure;
- Removing the need to file an Electronic Export Information form (former Shipper’s Export Declaration), except for those exports that require an export license;
- Eliminating the need for Temporary Importation Under Bond (TIB).
What are your obligations of an ATA Carnet as an importer?
As a holder of an ATA Carnet, you must present the goods and carnet to U.S. Customs and Border Protection upon exportation from the United States, importation and re-exportation in and out of the foreign country, and re-importation back to the United States. If you fail to comply or complete any of these operations with a carnet, you may end up responsible for paying 110% of the duty and import tax.
What happens if your carnet expires?
If your carnet expires and is a U.S.-issued carnet, there will be no penalties or duties assessed, unless the carnet expires before the U.S. merchandise was exported from a foreign country. If that is the case, penalties may be assessed by that foreign country’s government.
If it’s a foreign-issued carnet, then liquidated damages will be assessed by CBP due to the carnet expiring before the merchandise could be exported from the United States.
If you’d like to learn more about ATA Carnets and how you could take advantage of this document, please reach out to your local ICAT office! We’re always here to help answer any questions you may have when it comes to your logistics and transportation needs.
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