Clearit.ca's Blog on Customs Brokerage and News Updates
As a business owner looking to do temporary imports, if you’re wondering about ATA Carnets, rest assured that you are on the right track. When we chat about imports on the blog, we don’t often talk about the businesses that have a specific need for a temporary set up.
Examples of this kind of need would be if you need to bring in prototypes or product samples without being slapped with hefty duties. These imports are exempt because they do not count towards the ecosystem of American business/commerce from a legal perspective.
As of today, eighty-six countries participate in the ATA Carnet program. It is important to note here that the Carnet is issued by the exporting country/country of origin. In the context of U.S.-based Carnets, you’ll need an official American residence and proof of being a taxpayer to move forward with the program.
So, how is an ATA Carnet defined exactly?
Simply put: it’s an internal customs document used by businesses/individuals that want to be exempt from paying duties upon a temporary importation. It can be used to enter and then re-enter the U.S. with your goods an unlimited number of times — within the set time period. But be careful! The Carnet expires in one year from the date of issuance (not the date of use).
U.S. Customs and Border Protection (CBP) have an extensive FAQ about ATA Carnets on their website that you may refer to if you run into any difficulties determining if this Carnet is right for your importing/exporting needs.
Here is how they frame the importance of using this Carnet for temporary imports/exports:
“The ATA Carnet simplifies CBP formalities involved in temporarily importing goods into the U.S. and other countries. Without a carnet, it would be necessary to go through customs procedures in each country for the temporary admission of goods.”
How does this compare to a Temporary Importation Bond (TIB)?
In a piece we previously published, we put the ATA Carnet and the TIB in a head-to-head matchup. To boil it down, we explained that obtaining a Carnet is a simpler process and can be beneficial as long as you use it within a year. There are no options for an extension here. A TIB can be extended for up to 3 years, which can be advantageous. However, more documentation is required upon arrival at the destination in order to clear the delivery (like CBPF 3461 or 7501). Whereas there is no additional documentation required with an ATA Carnet.
Read our blog post: ATA Carnet versus Temporary Importation Bond.
What is the downside to using a Carnet, then?
Beyond not being able to extend the validity of the carnet beyond a year, there should be a big, blaring, yellow caution sign here.
There are 2 things you need to look out for:
1- If a U.S. ATA Carnet does expire, there will be no fines to be paid to CBP. But the Country of Origin may apply some sort of penalty. If the Carnet is issued by another country, damages will be evaluated by CBP — so be careful!
2- If the goods imported through an ATA Carnet does not re-export the goods; by way of selling, donating, or throwing away, 110% of the import duties and taxes will need to be paid to customs. This is considered to be a terms violation!
While aiming to educate you about ATA Carnets, we feel obliged to warn you of any costly mistakes that could be made during the process. We certainly only scratched the surface, but we hope that we’ve given you an understanding of the use and application of ATA Carnets.
If you are still unsure whether or not it’s right for you, please feel free to drop us a line here to discuss. We also have live agent chat on our home page!