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The Ins and Outs of Carnets

Carnets (pronounced car-nays), or in other words merchandise passports, are Customs documents that aid in simplifying and reducing costs for temporary importation and subsequent exportation of goods. In this article, we will discuss the benefits of using a carnet, where to use a carnet, and what could cause a claim against a carnet.

The benefits of using a carnet outweigh the disadvantages. Benefits include time, effort, and costs. Using a carnet will save time due to the “simplified Customs procedures for the temporary importation of various goods” listed on the carnet (www.uscib.org). Using the simplified Customs procedures may also save effort when trying to clear the good through Customs and will save on cost at Customs due to the reduced detention times. A carnet will also save cost because it will decrease or eliminate the need to pay any duty, tax or temporary import bonds that that the country imposes on temporary imports.

The use of carnets is currently accepted in over 80 countries and more are being added every year. Some of the most difficult countries to ship to accept carnets, such as Taiwan, who is accepting to carnets however they are issued on a TECRO carnet and not the typical ATA carnet, and it is only used between the U.S. and Taiwan.  Soon carnets will be accepted by Qatar and Saudi Arabia as well.

There are two main disadvantages of using a carnet. The first being that if the country using the items wants to keep them you will need to completely export and re-import on a permanent basis, with payment of any applicable duties and taxes. The second disadvantage is that while the carnet process may help with imports and cost reduction, it increases the administrational burden on the carnet holder. Carnets must be tracked closely to ensure that they are exported within the correct time period.

The length of a carnet is always 12 months, however, the length that the cargo and carnet are allowed in a country can vary. There are a few countries that allow only a maximum of six months. For example, Algeria will only allow a carnet and its contents to be in the country for six months at a time, if the items are left in the country for more than the six months there will be fines due to the violation.

The penalty for a carnet not being processed correctly is dependent on what the value of the carnet is, with the penalty usually running between 10% and 40% of the value of the carnet (in addition to any due duties and taxes). A claim usually occurs if goods are not exported prior to the expiration of the carnet. You can try to mitigate some of the claims by submitting a certificate of disposition. This will tell Customs when it arrived in the country and why the carnet was not stamped and signed by the Customs entity of that country. If you have any further questions about carnets and if they are right for your business please contact sales@allynintl.com. Our experts are fully capable to help you throughout the carnet process. 

Heather Oskvarek

Sources: www.uscib.org


About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance.  Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, FL U.S.A, Shanghai, P.R. China and Prague, Czech Republic. For more information, log on to www.allynintl.com.

 

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