What do these situations have in common?

• It’s trade show season, and a business is gearing up to hit the road on a whirlwind tour, showing off its goods directly to its clients, customers, and other businesses. 

• A manager is planning the details of a traveling circus, including the movements of tents, stages, and stands. 

• An indie band is going on a road trip across North America, and their van carries all their guitars, drums, and electronic equipment.  

If you said that all of these situations involve the international travel of non-consumable items intended for re-export, then that is a very specific answer, but it is correct. We would also have accepted that each case, under normal circumstances, involves a mountain of paperwork, reams of forms and documents, and a host of often laborious regulations to work through. The good news is that they will all also benefit greatly from the use of an ATA Carnet, also known as a "Merchandise Passport". 

ATA Carnets, or just ‘Carnets’ for short, when appropriately applied for and used, can serve as a significant shortcut when managing the importation of temporary goods across multiple countries. Effectively, giving your goods what they need to move through countries quickly and easily, but the process involved in acquiring one is thorough, and the rules around their use are strict, so the more you know about what you’re getting into, the better. 

What is an ATA Carnet? 

A Carnet is a document first founded by the World Customs Organization (WCO) in 1961. It is an internationally recognized piece of Customs documentation that allows for duty-free and tax-free movement through ports of entry in over 80 countries. 

Functionally, it serves as a cross-border facilitator for the temporary importation of goods intended for re-export. To be clear, goods benefiting from a Carnet still need to meet any participating or partnering government agency requirements needed to import the goods - even temporarily, but for organizations or enterprises that intend to travel through multiple countries in a short period of time, it is a way to move a pre-approved list of goods across borders relatively headache-free.

The best examples of organizations that benefit from Carnets are companies that need to move trade show gear, media or production companies, or traveling performers like circuses or traveling bands.  

What Can and Cannot Travel on a Carnet

Carnets are highly specific in their use case, and Customs is very careful to make sure that every ‘i’ is dotted and every ‘t’ crossed when it comes to their use. Eligible goods for ATA Carnet coverage are those that are intended to come back exactly as they left and without having entered the commerce of the country you are visiting. 

The unofficial ‘big three’ of what can be covered by a Carnet include: 

1. Commercial Samples - these include prototypes, machinery, clothing samples, jewelry, etc. Fundamentally, anything you want to show off and then bring back with you. 
2. Professional Equipment - These are goods that are used as part of a job in the country you are visiting. The classic examples are TV equipment, musical instruments, testing equipment, etc.
3. Exhibition Goods - These are your tents, chairs, table cloths, stage dressings, or other goods that are necessary background items for exhibitions, trade shows, conferences, or concerts. 

By the same token, ineligible goods include anything that is consumable, disposable, or intended for sale, repair, or distribution while abroad. These goods have their own processes and must be imported through standard channels. 

The best way to ensure you have what you need is to work closely with your broker or connect with our Trade Advisory Team.  

How do I get a Carnet? 

Carnets are issued through what is referred to as your country’s ‘National Guaranteeing Association.’ In Canada, this is the Canadian Chamber of Commerce, and in the US, it is run through the United States Council for International Business (USCIB). 

Of course, there are very specific processes required and minute differences between the two organizations, and you are encouraged to check out the website for the Canadian Chamber of Commerce and the USCIB for specific application requirements, but in general, you will need the following information at the ready: 

1. A brief description of the nature of your trip and what purpose your temporarily imported goods will be serving. Often, the modes of transportation are a required step for this part as well.
2. A precise, detailed list of the goods that will be traveling under the Carnet. This includes descriptions, serial numbers, quantities, values, weights, and countries of origin for the goods. 
3. Information on the ‘authorized representatives’ of your Carnet, or in other words, those who will be handling the goods and the physical document.
4. An itinerary of the countries you intend to travel to with the goods. 
5. An established security bond set at, typically, 40% of the value of the goods. 

ATA Carnet Validity Period and Extension Rules

In general, Carnets are valid for 12 months from the date of their issuance. In a very technical sense, they are not extended, but instead are replaced by what is referred to as a ‘replacement Carnet.’ The replacement extends the 12-month limit, must be applied for before the old one expires, and isn’t always accepted in every country. 

What to Do if Carnet Goods are Lost or Stolen Internationally

One of the more common questions we receive about Carnets is what happens if the goods are lost, stolen, or otherwise not exported while abroad, and the short answer is - it’s not great news.

Generally speaking, if the goods are not returned, the national guaranteeing association must pay 110% of the import duties and taxes imposed by the country’s Customs. Then, they will, in turn, come to you to collect the money owed. 

It’s important to note that a Carnet is a customs document, not insurance, and it simply does not protect you from lost or stolen goods, nor the duties owed after what is, effectively, a permanent importation. 

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‍PCB can help set you on the right track when applying for a Carnet, and contacting a broker should always be your first step when moving goods internationally. For guidance on this process, do not hesitate to get in touch with our team at any point in the process.