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Avoid Foreign Duties With Carnets: Your Merchandise Passport

Published on Thursday, June 01, 2000

Each year, goods valued at more than $1.5 billion depart the United States and enter many foreign countries duty-free. And it’s all legal, thanks to ATA Carnets or “The Merchandise Passport.”

There is one catch, however. Goods traveling on a Carnet must return to the United States, or the exporter forfeits a surety bond.

Carnets Facilitate Global Business

The Carnet (car-nay) is an international customs document that facilitates global business by avoiding extensive customs procedures, and eliminating payment of duties, value-added taxes, and the purchase of temporary import bonds.

A Carnet, a set of legal-size documents with a blue cover, involves only goods returning to the United States within 12 months. Basic processing fees for a Carnet range from $120 to $250.

Carnets Are for Big and Small Companies

Though Carnets are used mostly by large corporations, increasingly, U.S. executives from small and medium-sized businesses are finding them highly useful when traveling overseas in quest of new markets.

Goods may pass from one Carnet country to another on a temporary basis, without lodging an import bond with each country’s customs authority. Since many industries have trade shows that run consecutively in different market centers, displays tend to travel quite a bit. This service makes coordinating overseas show participation much easier.

Globe Trotters Avoid Headaches

Without a Carnet, goods carried by a traveler or stored in an aircraft’s cargo hold can sit for days or weeks as customs agents sort through papers and inspect equipment.

Carnets help globe trotters avoid headaches and hassles with foreign custom inspectors by quickly clearing such products as computers, repair tools, scientific and medical equipment, cameras, fine arts, jewelry and wearing apparel, automobiles, live animals, video equipment, and industrial machinery.

Extraordinary items also can travel on Carnets. From circus tigers, elephants, and Cessna jets to World Cup-class yachts, satellites, human skulls, and the New York Philharmonic, the ease Carnets provide is almost endless. However, they do not cover consumable goods (food and agriculture products) or disposable items.

Seventy-five Destinations Honor Carnets

Currently, 75 countries and territories in Europe, Asia and Africa, plus the U.S. and Canada, participate in the system. China and Taiwan became the most recent participants. None of the Latin American countries, including Mexico, participate in the Carnet system.

Some 13,500 Carnets (nearly 200,000 worldwide) are issued each year to 3,000 exporters in the United States.

Who Issues Carnets?

Carnets are issued by the New York-based U.S. Council for International Business (USCIB), an affiliate of the Paris-based International Chamber of Commerce.

The USCIB has authorized two service organizations to issue Carnets — Roanoke Trade Services, Inc. and the Corporation for International Business. The former has eight offices and the latter has one office in the United States.

Carnet insurance can be purchased separately from Roanoke Trade Services, Inc. It will cover merchandise while in transit and abroad. The premium is usually about 1% of the value of the exports with a minimum premium of $50. If the exporter prefers, he or she can purchase the insurance elsewhere.

Security Must Be Posted

All Carnet applicants must furnish the USCIB with security. This acts as collateral and will be drawn upon to reimburse the USCIB in the event it incurs a liability or loss in connection with the Carnet or its use.

The amount of the security deposit is based on the total value of the items to be exported and the country(ies) to be visited. The minimum security is 40% of the value of the goods exported; 100% is required for goods destined for Israel or South Korea.

Most companies post a surety bond that may be obtained from any of the 200 companies admitted in the State of New York. Surety bonds are terminated once the original Carnet has been returned and no claims are anticipated by the USCIB. A certified check also can be used for security. When the exports are returned to the United States, the check is returned if there are no claims to be paid.

Need More Information?

For more information about the Carnet system, you can reach your nearest Carnet issuing office at 1-800-CARNETS, or log onto www.roanoketrade.com or www.uscib.org.

Passing PNTR for China Will Benefit Western New York

Published on Friday, May 19, 2000

What is the single most important act that our government can perform this year to assure the continuation of the record economic prosperity we've enjoyed throughout most of the past decade and into the new century?

You might say tweak the prime rate or cut taxes. However, there is one thing upon which we can all agree to further open the world's largest markets to American goods and services. This is an effort vital to our economic and national interests.

Congress can help achieve this important objective by passing Permanent Normal Trade Relations (PNTR) status with China. This would complete a process that started with the negotiation and signing of a landmark market access agreement with China last November.

The pact gave China the U.S. "thumbs-up" to join the World Trade Organization (WTO). However, for us to realize the benefits of this historic accord, Congress must pass PNTR legislation. WTO rules specify that member nations must grant each other PNTR status.

This deal is a win/win for the United States and New York State. And today, China, including Hong Kong, is New York State’s sixth largest export destination — bigger than Germany or France. Greater access to the Chinese market will result in increased exports and revenues for Western New York, a place where economic growth has not always kept pace with the rest of the nation.

The Buffalo-Niagara Falls metropolitan area employs more workers in the transportation equipment industry than any other manufacturing sector. Not surprisingly, transportation equipment is New York’s second highest export to China. And other major employers, which include the industrial machinery, food product, chemical, fabricated metal, electronic, and scientific instrument sectors, also are among New York’s top exports to China.

If Western New York is to catch up and enjoy the levels of growth achieved nationally, we must look beyond our borders to a greater extent. And, since 96 percent of the world’s customers live outside the United States, we need to focus on exports to maintain and create jobs here.

China already has access to our markets; supporting PNTR will not change U.S. tariff rates. It will, however, open the door to China's marketplace. With a population of more than 1.3 billion, we cannot afford to be locked out. The agreement will provide enormous opportunities for our goods. For example, the agreement will:

• Cut average tariffs from 24% to 9% by 2005;
• Further cut tariffs on U.S. priority to 7% by 2003;
• Eliminate tariffs on high-technology goods by 2005;
• Cut average agricultural tariffs by half; and
• Remove China's distribution monopoly, allowing U.S. firms to freely distribute their goods in China.

If our Members of Congress fail to vote in favor of PNTR, we will hand over this opportunity to our European, Japanese and other competitors.

But this agreement involves more than just trade; it is an exchange of ideas, beliefs, and values that changes and enriches all who participate. For a quarter-century, U.S. trade has helped change China for the better by supporting economic freedom, human rights, access to information, higher living standards, and the rule of law for the Chinese people.

Successfully integrating China into the global economy also would advance security in the Asia-Pacific region. In fact, Taiwanese president elect Chen Shui-bian said he hopes to see China join the World Trade Organization.

On behalf of Western New York companies, workers, and farmers, I urge Congress to expeditiously approve PNTR with China. Through exports, we can help grow our local economy. In turn, this will create higher-paying jobs locally so our children can live, work, and raise their families in Western New York.

John Manzella

Published on Sunday, May 14, 2000

Agreement Encourages Growth in Africa and Caribbean Nations

Published on Saturday, April 01, 2000

Economic growth and prosperity in much of Africa and the Caribbean have not kept pace with the rest of the world. Recognizing this fact, the United States recently passed legislation that could improve the situation — and benefit your business.

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