What is an ATA Carnet

An ATA Carnet is an excellent regulatory device to enable the duty and tax-free transport of goods that return to their country of export within one year. It is informally known as “the passport for goods”.

An ATA Carnet is an excellent regulatory device to enable the duty and tax-free transport of goods that return to their country of export within one year. It is informally known as “the passport for goods”.

 

 

ATA stands for Admission Temporaire/Temporary Admission and is the name for a treaty between more than 80 countries allowing for its use. Although it is always essential to understand that adherent countries can change over time, a list of ATA treaty signatories can be found here:

 

https://www.uscib.org/member-countries-ud-1582/

 

Advantages of carnets over other forms of duty and tax free importation of dutiable and taxable consignments (most commonly alternatively imported under Temporary Import Bond) include:

 

  • Savings of time, effort and money in administration
  • One document produced in the originating country applies to the entire journey of the consignment, including unlimited import and export among signatory countries
  • Easy exit and easy entry, again among ATA carnet treaty signatory countries

 

ATA carnets cover commercial samples, professional equipment and goods for exhibitions and fairs.

 

In fact, carnets can be extended for one year beyond their one year general limitation, but there is a cost for the extension and there are other conditions, including one where it cannot travel beyond the country it is in when the extension is granted before returning to its origin, whereas for the initial year only one carnet needs to be produced in the country of export and within that year it applies to any country within the ATA carnet treaty.

 

Some additional, yet highly important points:

  • A carnet is a sophisticated, multiple page document created for the specific consignment intended. It contains a number of counterfoils and it cannot be lost or improperly altered without material consequences to the consignment it accompanies.
  • The premise behind duty and tax free entry and exit is that the goods being imported and exported are not being sold, having value added to them, disposed of or otherwise altered when they re-export from an imported country. If they do not complete their journey whole and intact, the premise behind the carnet is being violated and its preferable conditions will be void.
  • There is a bond, which is essentially a premium over full value, that is required to be paid to initial exporting country’s Guaranteeing Association (each country has a specific entity approved to hold the bonds in case of defaults). This bond is held until the consignment returns and the carnet successfully concluded.

 

Essentially, a carnet is an excellent device for samples and prototypes, goods going to exhibitions or shows or other consignments that will be re-exported from where they are imported within a year, particularly when those consignments are of high value that would otherwise be subject to duty and potentially value-added tax.

 

Having said the above, mistakes can be made and the consequences, including the forfeit of the entire bond as well as other legal and financial consequences to the shipper, can and do happen, often unintentionally. The language above is meant to be general and simplistic; using carnets as a tool can result in great success but there it is a highly detailed process to be followed with a number of risks for violation. When choosing a logistics company to assist with your carnet oriented project, it is essential that they be extremely versed in these regulatory devices, including the experience in producing as many as possible with subsequent direction of their accompanying consignment’s entire journey, particularly in shipping situations that closely resemble your own.