A carnet can provide overseas companies with the freedom to bring their products to the UK on a temporary basis – whether to showcase samples for customers, exhibiting at trade fairs and shows, or transporting equipment – and provides professionals with the ability to temporarily bring their tools of the trade into the UK in a cost effective way.
The following guide for UK importers looks at the carnet as a simple, low-cost solution to avoiding complex customs formalities and charges for private travellers and businesses requiring permission for temporary imports into the UK.
What is a carnet?
A carnet is a merchandise passport for goods used to clear customs in around 80 different countries worldwide, including the UK, without paying any duty and taxes — provided the goods, in their original form, will be re-exported within 12 months. Carnets are essentially international customs documents for any goods or equipment exported temporarily to a destination country for the purposes of work or business, and then subsequently re-imported to their country of origin, unprocessed and unaltered.
Upon presentation in the UK, the carnet will enable a shipment to clear customs without the payment of import duties and import taxes. Payment is not necessary because the carnet acts as a guarantee that the goods or equipment will enter and leave the UK within a year. It can also help to simplify and speed up the customs clearance process, where a single document can be used for clearing goods through customs, as well as facilitating re-entry into the country of origin by eliminating the need to register goods at the time of departure.
Since goods imported to a foreign country under a carnet are never intended to enter the commerce of the host country, they can be treated as duty-free and tax-free for a limited period of time. However, if the goods are not re-exported as required, they will be assumed to have entered the commerce of the host country and will therefore become liable for duties and taxes as a permanent rather than a temporary import.
What are the different types of carnet?
The different types of carnet will depend on the issuing country. In the UK, for example, there are two different types of carnets: the ATA Carnet and the EC/CPD/China-Taiwan Carnet. The ATA Carnet can be used for all carnet-countries with the exception of Taiwan, for which there is the EC/CPD/China-Taiwan Carnet.
The ATA Carnet system originated back in 1961 to encourage world trade, where the Customs Co-Operation Council (CCC), now the World Customs Organization (WCO) adopted the: “Customs Convention on the ATA Carnet for the Temporary Admission of Goods.” Described as a tool for international trade facilitation, the primary purpose of the ATA Carnet was to reduce those obstacles caused by varying national customs regulations, where “ATA” is an acronym of the French/English words “Admission Temporaire/Temporary Admission.” Over the years, the ATA Carnet system has grown from just a few Western European countries to most of the industrialised world, including an increasing number of developing countries and emerging economies.
Hundreds of thousands of carnets are issued each year to private travellers and businesses, and are guaranteed by national bodies which administer the ATA Carnet system under a set of conditions established by the ICC’s (International Chamber of Commerce) World Chambers Federation. The London Chamber of Commerce and Industry (LCCI) manages the system in the UK, where ATA Carnets in the UK are issued by the LCCI and Authorised Chamber Network. However, when applying to import into the UK from overseas, the applicant should apply to the national guaranteeing organisation in their country of origin.
Importantly, the use of a carnet does not exempt the holder from observing the customs regulations of the countries operating the scheme, including import and export prohibitions or restrictions. This means that an export licence or permit, and any import/export licence for both the UK or countries to be visited in transit may still be required. The holder will also be responsible for any customs charges that may become due if they do not use the goods correctly or re-export them from the UK within the time required.
When is an ATA Carnet needed?
An ATA Carnet will be needed when temporarily exporting goods or equipment out of a foreign country (other than Taiwan) and when entering the UK with goods or equipment that will be re-exported within 12 months. The carnet is a paper document that is presented along with the goods to customs at both the point of exportation and importation by either the holder or an authorised representative, at which point the carnet is stamped.
The carnet comprises a front and back cover, vouchers and counterfoils. The cover contains information about the carnet holder, any representative(s), its intended use, the issuer and guarantor, the carnet number, the validity and the general list of goods. The vouchers, differentiated by colours and titles, serve as both a customs declaration and guarantee, where one voucher must be provided to UK customs officials when entering and leaving. This also applies when exiting and entering the country of origin.
The first time the carnet is used, it will need to have the green front cover stamped by a customs official in the country of issue. All relevant sections of the carnet, including box F of the yellow export voucher, will also need to be completed before it is presented, along with the goods or equipment. If the customs officials are satisfied, they will endorse and remove the voucher, and complete and stamp the matching counterfoil.
Goods and equipment can be hand-carried or shipped overseas but, in either case, the carnet must be presented to UK customs alongside the goods at the port or airport of arrival in the UK, having completed box F of the white import voucher. If the customs officials are satisfied, they will again endorse and remove the white import voucher and stamp the matching counterfoil. Importantly, counterfoils can be used as key evidence to discharge any claims should UK customs claim exempted duties and taxes at a later stage. If the ATA Carnet is not presented when leaving the UK, the holder may be asked to pay exempted duties and taxes, or for proof of re-export or the current location of their goods.
Importantly, if goods are imported to the UK and they are included in the passenger’s baggage, the carnet must be shown to customs officials at the red point or red channel. Goods arriving as freight may also need to be included on a ‘Customs Clearance Request’ form (form C21), although the carnet must still be presented to be stamped.
What types of goods can an ATA Carnet cover?
Most types of goods, both personal and professional, can be transported under an ATA Carnet, including commercial samples and advertising material, professional equipment, as well as goods intended for display or use at trade fairs, shows, exhibitions or similar events.
As such, carnets are commonly used by all sorts of travellers and businesses, from small exhibitors and salespeople to artists, athletes, TV crews, technicians and event participants.
Examples of goods and equipment that can be shipped to the UK under a carnet include:
- samples of manufactured goods, including clothing and furniture
- computer equipment for testing or demonstration
- photography, broadcasting and audio-visual equipment
- trucks or trailers equipped with training materials
- aerospace equipment and devices
- research and scientific equipment, devices and materials
- artefacts for display or exhibition, such as antiques and antiquities
- show booths, equipment and merchandise for international trade shows
- vehicles for racing or prototypes for exhibition
- livestock and bloodstock, such as horses for training or shows
- props, costumes, sets and equipment for a live theatre, dance or opera performance
- musical instruments, music stands and accessories for an orchestra tour
- acoustical testing equipment for a performance venue.
However, there are certain exceptions as to what can be transported on a carnet, including perishable and consumable items, such as food, agricultural products, disposable items or explosives, or any goods intended for processing or repair. Any goods which are posted or unaccompanied, rather than hand-carried or shipped, also cannot travel under a carnet.
How to obtain an ATA Carnet
ATA Carnets are issued at national level, where applicants should contact the guaranteeing association in their country or customs territory. A directory of the names and contact details can be found on the ICC website, with further guidance on the individual websites of each guaranteeing association or nominated service provider. They can advise as to whether or not they can issue an ATA Carnet for the temporary export planned.
Provided the goods or equipment are covered, to apply for an ATA Carnet, the applicant will need to gather their shipment information and enter this data online, including:
- the purpose for which their goods or equipment is being temporarily imported to the UK
- the name(s) of any authorised representatives responsible for the Carnet documents while in transit
- the list of destination countries, including the UK, if more than one
- the list of countries the goods or equipment will be transiting en route to the UK
- the outbound and inbound anticipated modes of transportation
- the complete list of goods or equipment that will be travelling. This list should include detailed trade descriptions, plus any model and serial numbers, the quantity of goods, their value in pound sterling, their weight in kilograms and their country of origin.
The applicant must also pay the applicable fees and charges. Once issued, the ATA Carnet will usually be posted out or, in many cases, can be collected from the issuing office.
How much is an ATA Carnet?
The cost of obtaining an ATA Carnet can vary, depending on the guaranteeing association or nominated service provider. There will be a basic processing fee, usually determined with reference to the value of the shipment, together with any security that may need to be given. For example, in the United States, the processing fee will be $235 for a shipment with a value of between $1-$9,999, together with a security deposit equal to 40% of the value of the general list of goods. The security is in place so as to protect the guaranteeing organisation against foreign customs claims in cases where the carnet has been misused and the carnet holder is unable to settle charges due. However, it is always best to contact the issuer first, as they should be able to provide a breakdown of the costs involved.
If a carnet is lost, the holder can obtain a substitute carnet, setting out the same details as the original, but a second fee and security will usually apply. Importantly, once the carnet has been issued, the list of goods or equipment cannot be amended and extra items cannot be added, where the holder will need to apply for another carnet. However, split shipments are possible and the carnet may also be able to be used for countries that were not initially identified at the time of issue. In these circumstances, the issuing body should be contacted.
How long is an ATA Carnet valid for?
An ATA Carnet will be valid for up to 1 year from its date of issue, where the carnet can be used for multiple trips covering more than one country during its period of validity. A UK or foreign customs officer always has the right to limit the validity period on a carnet upon inspection, imposing a time limit for re-exportation of less than 12 months, but this is rare.
Technically, a carnet cannot be extended beyond the expiration date although, in some cases, foreign customs, including UK customs, may allow a replacement carnet to be issued to extend the time the goods are in the carnet country. The LCCI is not only responsible for all carnets issued from the UK, but for dealing with in-bound foreign carnets.
However, if a replacement carnet cannot be issued prior to the expiration of the original carnet, the goods may need to be re-exported. Alternatively, a decision can be made to pay the customs charges due to release the goods into free circulation. In these circumstances, the National ATA Carnet Unit should be notified as soon as possible that the goods will not be re-exported, where the holder should not wait until the carnet is due to expire.
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing & Content Agency for the Professional Services Sector.
