If you’re involved in business that requires temporarily moving goods across borders for exhibitions, trade shows, or professional purposes, you’ve probably heard of the ATA Carnet. It’s a vital document that simplifies the process of taking goods abroad for a short time and then bringing them back without having to pay taxes or customs duties.
Let’s break down the concept of an ATA Carnet and how it works, in simple terms.
What is an ATA Carnet?
An ATA Carnet, also called a Merchandise Passport or Passport for Goods, is an international customs document that allows businesses and travelers to temporarily export or import goods without paying customs duties or value-added taxes (VAT). It’s like a temporary passport for the items you’re taking abroad for a short period.
This document is especially useful for companies or individuals who need to send goods overseas for commercial reasons, such as:
- Exhibiting at trade shows
- Carrying professional equipment
- Displaying samples to potential customers
By using an ATA Carnet, you’re given permission to bring goods into participating countries without needing to pay import taxes, as long as you re-export the goods within the given time.
Meaning of ATA
The term “ATA” is a combination of two phrases, one in French and one in English:
- Admission Temporaire (French)
- Temporary Admission (English)
It refers to the temporary admission of goods into a foreign country.
How Does an ATA Carnet Work?
The ATA Carnet is designed to make the process of temporarily moving goods into foreign countries simpler and smoother. With this document, the importer (or the person traveling with the goods) can show it at customs and get a duty-free and tax-free entry of their goods into the country.
Once the goods enter the country, they must be re-exported before the Carnet expires. If the goods aren’t returned, the owner has to pay the necessary duties and taxes. The standard ATA Carnet is valid for 12 months from the date of issue, allowing multiple entries and exits from different countries during that time.
Sections of the ATA Carnet
An ATA Carnet is divided into color-coded sections, with each section used for different parts of the customs process. Here’s a simple breakdown:
- Green section: Contains information about the Carnet holder and the list of countries where it’s valid.
- Yellow section: For goods returning to their original country (e.g., the U.S. if you’re exporting from there).
- White section: Used by foreign customs when the goods are imported and then re-exported from another country.
- Blue section: Used for tracking goods in transit between countries.
This segmentation helps keep the customs process organized and efficient.
What Goods Are Covered by an ATA Carnet?
The ATA Carnet can cover almost all types of goods, from ordinary commodities to specialized equipment. Here are some examples of goods commonly covered by an ATA Carnet:
- Computers
- Industrial machinery
- Cameras and video equipment
- Musical instruments
- Automobiles
- Jewelry and gems
- Apparel (clothing)
These goods fall under three main categories, as defined by international conventions:
- Commercial Samples: Goods that are used as samples for marketing or sale (according to the General Agreement on Tariffs and Trade, GATT).
- Professional Equipment: Equipment used by professionals in their field (as per the Customs Cooperation Council’s Convention).
- Exhibition and Trade Fair Goods: Goods used for exhibitions, trade shows, or similar events.
Goods Not Covered by an ATA Carnet
It’s important to note that not all goods can be moved under an ATA Carnet. Items such as:
- Consumable goods (like food and agricultural products)
- Explosives
- Disposables (items that will be used up)
- Postal traffic
are not eligible under this system.
How Do You Get an ATA Carnet?
Getting an ATA Carnet is a straightforward process, but there are some important steps to follow:
- Identify Your Country’s Issuing Authority: Each country has an authorized body that issues ATA Carnets. In the United States, for example, the United States Council for International Business (USCIB) issues ATA Carnets. Other countries have their own respective organizations.
- Create an Account: First-time users will need to set up an online account with the issuing body. After that, users can log in and submit an application.
- Prepare Required Information: When applying for an ATA Carnet, you’ll need to provide the following details:
- The purpose for importing the goods temporarily
- Information about your company (e.g., tax ID or EIN)
- Details of the goods being exported, including model numbers, values, serial numbers, and quantity
- Information on the countries the goods will be sent to
- The modes of transportation (how the goods will travel)
- Submit the Application: After gathering all necessary information, submit the application for review. If everything is accurate, you can receive your ATA Carnet in as little as 24 hours.
How Much Does an ATA Carnet Cost?
The cost of obtaining an ATA Carnet can vary depending on several factors. Generally, there are two main fees:
- Base Fee: This is calculated based on the total value of the goods listed in the ATA Carnet.
- Additional Fees: You may need to pay extra for services such as expedited processing.
In addition to these fees, the issuing body may require a security deposit. This acts as a guarantee that the goods will be re-exported, or you will be liable for paying customs duties. The deposit is typically 40% of the total value of the goods. For some items, like vehicles, this deposit can be as high as 100-150%.
How Long Does an ATA Carnet Last?
An ATA Carnet is valid for one year from the date it is issued. During this time, you can use the document for multiple trips in and out of participating countries. This means you can export and re-import the goods as many times as needed, provided it’s within the 12-month period.
If, for some reason, you need to keep the goods abroad for longer than the ATA Carnet allows, you can apply for a replacement ATA Carnet. However, this process varies depending on the country, and not all countries accept replacement carnets.
What Countries Accept an ATA Carnet?
The ATA Carnet is accepted in 87 countries and territories, including major trading nations in Europe, North America, South America, Asia, and Africa. Some countries that are soon expected to join the ATA Carnet system include Trinidad and Tobago, Saudi Arabia, and the Philippines.
Benefits of Using an ATA Carnet
Here are some key benefits of using an ATA Carnet for your business:
- Simplifies Customs Process: Using a single document eliminates the need to deal with complex customs procedures in different countries.
- Saves Money: You avoid paying customs duties and VAT, making it a cost-effective way to temporarily move goods across borders.
- Unlimited Entries: You can use the ATA Carnet for multiple trips within the validity period without needing a new document.
- Prearranged Costs: Businesses know the fees and costs associated with their goods upfront, reducing surprises.
ATA Carnet vs. Temporary Importation Bond (TIB)
Sometimes, businesses might wonder whether to use an ATA Carnet or a Temporary Importation Bond (TIB). While both documents are useful for temporarily importing goods, they have some differences:
- ATA Carnet:
- Valid for one year.
- Covers a wide range of goods like professional equipment and trade show materials.
- Issued in the country where the goods originate.
- TIB:
- Valid for 12 months, with the possibility of extensions.
- Issued in the destination country.
- Requires a deposit, but allows a refund when the goods are re-exported.
Also Read: Choosing the Right Trade Finance Instrument for Your Business
Conclusion
In summary, an ATA Carnet is a valuable tool for businesses and individuals who need to temporarily move goods across international borders. It simplifies the customs process, saves money, and provides a flexible solution for companies participating in trade shows or transporting professional equipment.
FAQs on ATA Carnet
- How long does it take to get an ATA Carnet?
- It usually takes about one day if all information is correct. Same-day services are available for an extra fee.
- Can an ATA Carnet be extended?
- No, but you can apply for a replacement carnet before the original expires.
- What happens if goods are not re-exported?
- If goods aren’t re-exported, the owner has to pay 110% of customs duties and possibly face additional penalties.
Also Read: Types Of Trade Finance Products: Financing Foreign Trade
