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guest column
How Merchandise Passports can Unlock Customs
By Cynthia Duncan
Have you ever faced long
delays at customs when going
abroad to make sales calls,
attend a trade fair or
otherwise demonstrate how
terrific your products are?
Have you ever thought:
"There must be a better
way?" There is. It's called the ATA Carnet, or 'merchandise
passport," and it unlocks
customs for a wide variety of
purposes intended for
temporary export.
What is an ATA Carnet?
ATA Carnets enable duty-free and tax-free shipment of
many types of goods entering a
country that are not intended
to be sold. They were created
40 years ago by international
treaty, at the urging of some
farsighted companies and the
International Chamber of
Commerce, to facilitate
international trade.
"ATA" is an
amalgamation of the French and
English terms for
"temporary
admission," while
"Carnet" is French
for "booklet," which
describes the physical
appearance of the document.
The system has grown such that, nowadays, nearly
200,000 Carnets are issued
every year around the world.
Tools of the trade, commercial
samples or items for
exhibitions may travel on
Carnet and are exempt from the
payment of duty and taxes at
the time of entry.
More than 75 countries and territories throughout
Asia, Australia, Europe and
North America accept ATA
Carnets. Most countries in
Latin America and the
Caribbean do not, although
Chile is scheduled to join the
system later this year.
How does it work?
A Carnet allows you to avoid payment of duties as
well as value-added taxes. The
latter can be increasingly
troublesome, with VAT in the
European Union running from 15
to 25 percent of the total
value of the goods, depending
on the country of entry. In
China., VAT is 17 percent,
and in Australia, 10 percent.
When a country agrees to accept Carnets, it designates
a private group, often a
chamber of commerce, to
administer the system and
guarantee payment of any
applicable duties or taxes. My
organization, the United
States Council for International
Business, serves that function
in this country. We issue
Carnets out of our New York
headquarters and a network of
field offices nationwide.
ATA Carnets cover virtually all commercial goods,
including product samples,
professional equipment and
goods for trade shows and
exhibitions. An individual
Carnet can cover different
types of goods traveling
together. They are commonly
used for such things as
computers, photographic and
sound equipment, repair tools,
industrial equipment,
vehicles, apparel and jewelry.
They have also been used for less typical items: large
jetliners, human skulls,
prototype cars., America's
Cup-class yachts, performing
animals and an orchestra's
Stradivarius violins.
Again, nearly anything
taken abroad that is not
intended to be sold is
eligible. Carnets do not cover
food or agricultural products,
disposable items
or postal traffic.
What are the benefits?
An ATA Carnet streamlines the import process.
Complicated customs procedures
are reduced to one document
(although export and import
licenses must still be
obtained, where necessary),
and users avoid paying duty
deposits and securing
temporary import bonds.
There are fewer surprises with Carnets, since customs
arrangements are made in
advance, at a predetermined
cost, in US. dollars. Carnets
may be reused, for unlimited
exits and entries, for up to
12 months, with no need to
resubmit any of the paperwork.
How much does it cost?
The application processing fee ranges from $200 to
$330 per Carnet and is determined
by the value of the goods. The
USCIB requires a security
deposit, usually equal to 40
percent of the total value of
the goods, to cover any
customs claims that might
result from a misused ATA
Carnet.
The security deposit may take the form of a certified
check or a surety bond, the
latter of which is available
through our issuing offices.
Upon cancellation or
expiration of a Carnet, cash
deposits are returned in full,
and surety bonds are
terminated.
For goods valued at $50,000, the processing fees and
bond premium typically
amount to $480, delivered to
the customer in 48 hours. Rush
Carnets are available for an
extra fee.
Are Carnets available online?
The system is fully online
and many established customers
have found it so user-friendly
that the entire application
process can take just minutes.
This is especially important
for those Carnets on a rush or
last-minute basis.
Information on applying for an ATA Carnet, what goods
are covered and which
countries accept (and do not
accept) Carnets are available
at www.merchandisepassportorg.
To register for the online
application, visit www.carnetregistration.org
or call (800) 5-DUTYFREE.
Cynthia Duncan is senior vice president with
the United States Council for
International Business. She
can be reached at cduncan@uscib.org,
or at (212) 703-5079.
JUNE 27, 2005 Shipping Digest
Date
Updated: March 27, 2007
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