What is an ATA Carnet in Shipping?
In French, the word ‘carnet’ simply means a notebook. Later on, this word came to be commonly used for ticket books or a bunch of tickets bound in the form of a simple booklet from which it can be torn off and used.
Today, if you were to check the dictionary for the word ‘carnet’ you will find that it means ‘a permit, license, or document issued by a customs authority for the movement of an item from one country to another for a short period after which it has to be brought back to the country from where it was sent’.
Global business operations these days may require the movement of goods or equipment from one country to another for a short period. In such cases, it is not taken for sale or consumption.
To take an example, business organizations often display their products at international exhibitions, trade fairs, etc. A product for display has to be first exported to the country where the exhibition or trade fair is being held. It may have to pass through several countries, enroute.
Once the event is over, the product has to be taken back to its country of origin. Such temporary transfer of goods between countries without having to pay customs duties or following the normal customs formalities is facilitated through an easy customs arrangement called the ATA Carnet.
It allows goods into a country on a temporary basis while guaranteeing payment of customs duty in the event of a default. That is, if the goods are not taken back to their country of origin within the specified period, customs duty becomes payable.
An ATA Carnet can be availed by any legally registered business organization. It is more popular among exhibitors, motion picture filming crews, sports teams, etc.
What is an ATA Carnet?
The acronym ATA stands for ‘temporary admission’ or ‘admission temporaire’ in French. It is an international agreement between customs authorities of certain countries that allows for the movement of goods between these countries without having to pay customs duty or having to move the goods through a bond.
Currently, there are about 80 member countries to the Customs Convention on ATA Carnet that is administered by the World Customs Organization (WCO). A council working closely with the WCO called the World ATA Carnet Council (WATAC) is in charge of managing the system. Representatives of the member countries make up the WATAC.
The ATA Carnet does away with the need to pay customs duty at a port of entry, keep the imported goods in bond, furnish sureties and guarantees, or fulfill other customs formalities normally associated with the import of goods. It is a system of quid pro quo where the appointed bodies of the member countries guarantee each other on the agreements.
Member countries usually have a single body that would guarantee such transactions, but a few leading countries have several bodies that are authorized to issue guarantees.
What does the ATA Carnet issuer guarantee?
The basic guarantee states that duties and taxes will be paid by the guaranteeing body in case the arrangement is found to have been misused. As such, an exporting organization cannot sell or transfer the goods once it reaches their destination. It has to ensure that the goods are taken back to the country of origin within a specified time frame.
Most guaranteeing bodies take security from the exporting organization to cover claims that may come up in case of any default. Such securities are usually in the form of bank checks or surety bonds.
Benefits of ATA Carnets
The popularity of ATA Carnets stems from the fact that it can be prepared easily by any legally registered organization wishing to export their product and bring it back within a certain period. This document is then checked and verified by the customs. As we can see here, it does away with cumbersome processes that are otherwise involved in exporting and later re-importing an item under a duty-exempt agreement.
There are considerable savings in time and money when an ATA Carnet is used. It benefits both the organization sending the goods as well as the customs departments as there is much less administrative work to cover.
In the event of an exporter defaulting on taking back the goods within the specified period, customs duty is automatically charged and becomes payable immediately by the guaranteeing body. A penalty is also usually charged when such goods exceed their validity of stay in the foreign country. Most of the ATA Carnets are valid for one year making it convenient for professional exhibitors and those who travel frequently with goods or equipment.
The validity may be extended in certain cases. Some countries accept extended carnets, also known as ‘replacement carnets’. But they have to be extended well before their original expiration date.
What are the goods that are normally covered under the ATA Carnet?
This list can be quite exhaustive however, it can be generalized as follows:
- Items used in exhibitions and fairs
- Professional or sports equipment
ATA Carnets are mostly used for the temporary movement of goods such as exhibition materials, sports equipment, race cars, race horses, camera and filming equipment, musical instruments, etc.
Items that are generally not covered under the system of ATA Carnet are goods that are consumed or disposed of at the destination. Examples are, samples that are meant for visitors or clients, printed brochures, oil, lubricants, cleaning materials, etc. Items that will be sold to customers do not come under ATA Carnet. Food and beverages, tobacco, fuels, etc. are some of the other items that normally cannot be taken abroad using the ATA Carnet.
Since different countries have different specific rules and regulations regarding the import and export of goods to and from their territories, exporters are advised to check with the respective customs authorities before making any arrangements to move their goods under the ATA Carnet agreement.
Who issues and guarantees an ATA Carnet?
In India, the Federation of Indian Chamber of Commerce and Industry (FICCI) is the appointed authority for issuing and guaranteeing ATA Carnets. In the US, it is the United States Council for International Business (USCIB). The USCIB has two appointed service providers under them (Roanoke ATA Carnet and Boomerang Carnets). The London Chamber of Commerce and Industry and the Paris Chamber of Commerce issue ATA Carnets from the UK and France respectively.
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Hari Menon is a Freelance writer with close to 20 years of professional experience in Logistics, Warehousing, Supply chain, and Contracts administration. An avid fitness freak, and bibliophile, he loves travelling too.