ILLUSTRATION: MARK FISHER
What is an ATA Carnet, and how – and why – would I obtain one?
An ATA Carnet is an internationally accepted temporary export/import customs document. Technically speaking, the ATA part stands for a French/English mash-up of Admission Temporaire-Temporary Admission, and "carnet" (pronounced kar-nay) is a French word meaning ticket or passage. Initiated in France (hence the terminology), the document was put into force in 1963 and is jointly administered by the World Customs Organization and the International Chamber of Commerce. It's currently accepted in 87 nations and territories, including North America, most of Europe, and some countries in the Middle East, Asia, and South America.
In a nutshell, once an ATA Carnet is purchased, the holder can temporarily import goods into these 87 destinations without paying import duties and taxes as long as the goods are returned to their countries of origin within 12 months (six months for goods classified for trade fair and exhibition use). However, some countries, including Korea, Malaysia, Mexico, and Singapore, may have shorter validity periods. For goods originating in the United States, the ATA Carnet also serves as the U.S. Certificate of Registration of Goods during re-importation, which means the holder doesn't need to pay U.S. duties and taxes upon return.
ATA Carnets allow exhibitors to move their stands, products, and other freight into and out of international show destinations without paying duties and import taxes in either direction. But there are additional benefits to these useful documents, and there's a lot more to grasp to fully understand them. So here's a basic primer to help you determine if an ATA Carnet is right for you – and just what you'll need to do to secure one.
Applicable Goods and Validity Period
Regulations specify that three general types of goods fall within ATA Carnet guidelines: commercial samples, professional equipment, and goods for fairs and exhibitions. So not only are exhibition-related shipments allowed, but the carnet system was devised in part for this very purpose.
Most items you'd want to ship to a show, from exhibitry to audiovisual components, are fair game as long as you re-export them within six months. Exceptions include consumable and disposable items, agricultural products, explosives, and postal traffic. Therefore, common exhibiting items such as product literature, office and cleaning supplies, food, product samples, branded tchotchkes, etc., can't travel under an ATA carnet.
Once purchased, a carnet can be used multiple times and in multiple countries during the six-month period of validity for trade fairs and expos. In addition, you can split your shipments so that not all of the items listed on the original carnet arrive in the foreign country at the same time.
Before diving into a deeper explanation of carnets, it might be helpful to share a few alternatives to provide some context. Obviously, one option is simply to ante up for the duties and taxes. However, although duties are currently low compared to historical averages, taxes can be as much as 25 percent of the value of your goods. Granted, in some countries you can take various steps to recoup the value-added tax (VAT) – a process that must be initiated well in advance of shipping – but many people prefer to avoid ever paying these taxes or jumping through hoops to recoup them.
Another route is to rent your booth and your most expensive show-related accoutrements in the host country. Given the steadily increasing cost of transportation, this is a viable alternative for many exhibitors.
You can also hand off all of the responsibility for shipping, and thus duties, taxes, VAT recouperation, carnets, and more, to your transportation provider. This, too, is a feasible option as long as you have complete faith in your logistics provider and the willingness to relinquish partial control of your exhibiting budget.
There are other customs alternatives that may eliminate or decrease duties and taxes, such as the Foreign Temporary Importation Under Bond (TIB), the Foreign Customs Broker's Entry Bond, U.S. Customs Form 4455 Certificate of Registration, etc. However, none of them are as easy to obtain as a carnet; plus, few, if any, can be secured prior to the departure of your freight, and each bond is only good one time and in a specific country.
Finally, you could develop a hybrid solution. For example, you could rent a booth in the host country and bring your $10,000 piece of equipment with you, paying duties and taxes only on the equipment. Or, you could secure a carnet only for that equipment. Bottom line: There are other options available, but many international exhibitors turn to ATA Carnets as a cost-effective and relatively hassle-free way to bypass customs duties, taxes, and fees.
Benefits of Using Carnets
So why are carnets such a logical fit for exhibitors? First, they can save you money. Let's say you have a shipment of goods going to London that is valued at $20,000. With an ATA Carnet, you'll likely pay around $460, which includes all processing and related fees. If you opt to pay duties and taxes on this shipment (assuming a 3-percent duty rate and a 20-percent VAT), you'll pay $3,500. So the savings are significant.
Carnets also can save you time and trouble. While they are actually paper documents you or your freight forwarder carry through customs, you can apply for carnets online and usually have them in your hands within 24 hours. As a result, you'll have all of your customs documentation before leaving the country. Also, all associated fees are fixed and payable in U.S. dollars, so you'll have no unexpected customs charges and won't be affected by currency fluctuations.
Finally, as outlined earlier, a carnet procured for exhibiting purposes can be used in multiple countries for up to six months. So using the previous example, if you send your $20,000 shipment to London, Paris, and Berlin within six months, you'll pay $10,500 in duties and taxes. If you use a carnet, you'll still only pay $460.
To obtain a carnet, you'll first need some information, such your EIN or Taxpayer Identification Number, the names of people responsible for carnet documents while in route (i.e., your authorized representatives), a list of destination countries and any countries the goods will pass through en route to the destination, info about the outbound and inbound modes of transportation, and a complete manifest of the goods traveling. This inventory should include detailed descriptions, such as model and serial numbers, quantities, values, weights, and countries of manufacture.
You'll also need to fill out an online application via Boomerang Carnets or Roanoke Trade, a division of Roanoke Insurance Group Inc. These two firms are the appointed service providers to the U.S. National Guaranteeing Association, and all other outlets obtain their carnets from these two providers. While there are help lines you can call to aid you in the process, obtaining a carnet is relatively easy. Although carnets might not be perfect for every situation, they're popular and practical options for the majority of international exhibitors.
— Leslie August, senior vice president, Boomerang Carnets, Barrington, IL