Temporary Entry Made Easy
Temporary entry of your product or equipment into a foreign country can take
many forms:
The purpose of this article is discuss each topic, provide the alternatives
available and give you the easiest alternative (although not the least
expensive).
In addition, we've added an analysis of most of the major world's markets:
Demonstration and Evaluation
typically happens when you are either doing product demonstrations which may or
may not allow for an extended evaluation period by your prospective customer.
Alternatives:
- If you are demonstrating equipment in country on a regular basis, the
easiest alternative may be for you to either ship a complete set of
equipment (duty paid) to your subsidiary or distributor asking that they
store it for future use. You'll find that the cost of a Carnet and/or
temporary import bonds will quickly make this alternative the most cost
effective. Plus if you need to service the equipment you've already
sold, you may be able to swap out the equipment thus saving your customer.
- The Carnet is an alternative. Make sure that you list all items by
serial number and that you take only those items covered by a specific
Carnet. You may find that you need multiple Carnets, especially if
you're also using the product for service work. Remember, the Carnet
is valid for one year for as many entries as are necessary. The down
side is that Carnets are not valid in all countries.
- The last alternative is to post a temporary import bond with local customs
authorities. You'll either need to carry a lot of cash or utilize a
customs house broker located in the city of your in country arrival.
Your freight forwarder or customer may be able to help arrange for a
broker. They will then post the necessary bond and documentation to
facilitate your equipments entry.
Loaners happen when you either loan, lease, lend
your equipment to a foreign firm for a short period of time. The
alternatives are identical to those found in Demonstration
or Evaluation.
Merchandise Samples happen a lot in
sales. They can be product specific, sales promotional items, color
swatches or whatever. The general rule of thumb is that if there is
perceived value by customs in whatever country you're shipping to, then duty and
taxes will be charged. If there is no commercial value and you're not
invoicing your customer. Generally speaking, merchandise samples are not
returned. As such, they need top be entered as consumption entries and as
such are not considered to be a temporary entry.
Short
Term Use or Incorporation Into a Different Product. Short term use
is prevalent in the contract manufacturing industry where you're having product
manufactured in a third country. Incorporation occurs when your product is
physically incorporated into a different product usually causing a tariff shift
from one product description to another.
Alternatives
Short term use alternatives are identical to those in Demonstration
or Evaluation. Incorporation alternatives are slightly different
depending upon whether there is a physical change in your equipment or
not. If your product is incorporated into a different product, a
consumption entry will have to be filed unless the incorporation is happening in
a bonded customs warehouse or foreign trade zone. Drawback may then be
filed depending upon the customs regulations of whatever country the equipment
is exported from. If your product still looks the same way it did prior to
incorporation, you may be able to use the alternatives found in Demonstration
and Evaluation.
Tools of the Trade are commonly
referred to as tools used for installation and or repair of capital
equipment. They may take the form of sophisticated meters and electronics
or your tool box full of all those favorite tools that you can't do without.
Alternatives:
- If you are servicing equipment in country on a regular basis, the easiest
alternative may be for you to either ship a complete set of equipment (duty
paid) to your subsidiary or distributor asking that they store it for future
use. You'll find that the cost of a Carnet and/or temporary import
bonds will quickly make this alternative the most cost effective. Plus
if you need to demonstrate the equipment to a new customer, you're ready to
go at a moment's notice.
- The Carnet is an alternative. Make sure that you list all items by
serial number and that you take only those items covered by a specific
Carnet. You may find that you need multiple Carnets if you have more
than one service technician. Remember, the Carnet is valid for one
year for as many entries as are necessary. The down side is that
Carnets are not valid in all countries.
- The last alternative is to post a temporary import bond with local customs
authorities. You'll either need to carry a lot of cash or utilize a
customs house broker located in the city of your in country arrival.
Your freight forwarder or customer may be able to help arrange for a
broker. They will then post the necessary bond and documentation to
facilitate your equipments entry.
Trade Shows are unique in the temporary
entry category. Most major trade shows enjoy special customs treatment as
either a "Bonded Customs Warehouse" or in some instances, a
"Foreign Trade Zone". Note: your promotional materials
given away during the show will have to be entered as indicated in Merchandise
Samples.
Alternatives:
- In both situations, they are considered "outside" the county in
which they're being held. Generally, the show will designate a
specific Customs House Broker whose job it is to make sure that the
necessary documentation and bonds are made to facilitate your product's
arrival an departure. If the show allows for on-floor sales, it will
be necessary for your temporary entry to be converted to a consumption entry
with payment of all appropriate duties and taxes. Costs associated
with their service can be either included with your exhibit space or
invoiced directly by the Customs House Broker.
- If the show doesn't have a Customs House Broker, or you prefer to not use
one (maybe you have some demos planned after the show), then the
alternatives outlined in Demonstration
and Evaluation will work.
Please see our companion guides:
Selecting and Participating in an International Trade Show
and
How to Select a Forwarder for Exhibits
Date
Updated: March 27, 2007
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