CASE $17\mathrm{.}1.$ THE ATA CARNET: UNLOCKING CUSTOMS

FOR TEMPORARY ENTRY OF GOODS

The ATA Carnet is an international customs document used by travelers

to temporarily import certain goods without paying tariffs or going through

customs formalities. The term $$ATA$$ stands for the French words $$admission

temporaire.$$ It is created by an international convention to promote

world trade and can be used in more than ninety countries. Major trading

nations such as EU member countries, Australia, Bulgaria, Canada, China,

Czech Republic, Hong Kong, Hungary, India, Israel, Japan, Malaysia, New Zealand, South Africa, Thailand, and the United States all accept ATA

carnets. The United States acceded to the ATACarnet convention in $1986.$

In the United States, carnets are issued$/$ guaranteed by the U$.$S$.$ Council

for International Business $($USCIB$).$ The USCIB is liable for the payment

of liquidated damages to customs in the event that the carnet holder fails to

comply with customs regulations. The carnet is valid for one year from the

date of issuance.

There are a number of benefits that can be derived by importers from using

the ATA Carnet: $(1)$ avoidance of complicated customs procedures. The

ATACarnet allows the importer to use a single document for clearing goods

through customs in several countries. It also allows for unlimited exits from

and entries into the U$.$S$.$ and participating foreign countries during the oneyear

period of validity, $(2)$ the importer will not be required to pay customs

duty or post a temporary import bond.

ATA Carnets cover virtually all goods except food and agricultural

products $($consumables$),$ disposable, and hazardous items. Merchandise intended

for sale or resalemust be entered as a regular customs entry. The ATA

guaranteeing association $($USCIB in the case of the U$.$S$.)$ requires a security

deposit $($about $40$ percent of the value of goods$)$ to cover any customs claim

that might arise from a misused carnet. The deposit is returned upon the

cancellation of the carnet. Application for a carnet is made online at www

$.$merchandisepassport.org$).$

In the case of certain countries that do not accept ATA carnets, companies

can apply for a temporary import bond $($TIB$),$ a document that can be

purchased from a customs broker at the time of entry. The TIB deposits and

payments are made in the importing country each time a product is imported.

Example: Harley$-$Davidson moved its classic bikes, motorcycle parts, and

artifacts to ten cities around the world including Barcelona, Hamburg, Toronto,

Sydney, and Tokyo, and back to its headquarters in Milwaukee, Wisconsin,

in $2002-2003$ using the ATA Carnet. The tour intended to celebrate

the $100$th anniversary of the company was made easier by the carnet which

eliminated the need to pay duties and taxes, as well as reduced the delays

and costs of physically crossing international borders.

Questions

$1.$ Identify a company in a specific sector and determine how it can take

advantage of the ATA carnet system.

$2.$ Are there any disadvantages in using the ATA Carnet?