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What is an ATA Carnet Bond?
What is an ATA Carnet Bond?
An ATA Carnet Bond is designed to offer a simple way to provide a security deposit to the USCIB (The United States Council for International Business) that doesn’t tie up funds for an extended period of time. This type of bond is a written agreement that guarantees payment of import duties, taxes, and any other potential penalties in an ATA Carnet holder fails to meet the obligations of the carnet. An ATA Carnet Bond in conjunction with the carnet also assures compliance with all laws and regulations concerning the entry of merchandise to a foreign country.
An ATA Carnet is an internationally accepted document to aid in the temporarily exportation of commercial samples, professional equipment, and goods for exhibitions and fairs. In order to explicitly follow the obligations of an ATA Carnet, the items must be re-imported back into the U.S. within 12 months and must be re-imported in the same condition in which they left the country.
How are ATA Carnets Used?
ATA Carnets are used to export and re-import items to over 100 different countries within Europe, North America, South America, Asia, Africa, and Oceania. They can be used to move a vast array of merchandise including vehicles, live animals, medical equipment, promotional materials (not handouts), video equipment and more
So what is an ATA Carnet Bond used for? The ATA Carnet Bond is not insurance. What it does is assures that an ATA Carnet is financially secured and guarantees the payment of any duties, taxes or penalties for not following the initial agreement of an ATA Carnet. Payment is required if the Carnet Holder and principal on the bond is not able to fulfill the obligations under the terms of the Carnet. It is imperative that a Carnet Holder understands their responsibilities.
To calculate an estimated premium for a Carnet bond you can find various calculators online or multiply the value of the merchandise being exported by 40%. The result is then multiplied by $10.00 per thousand.
Example:
$100,000 general list value x 40% = $40,000
$40,000 / 1000 x $10.00 = $400.00 premium
If you choose to provide a cash deposit rather than an ATA Carnet Bond to the USCIB as your financial guarantee, business funds could be tied up for as long as 30 months. This is why it is important for businesses to fully understand the obligations and restrictions placed on an ATA Carnet in order to prevent any further costs or penalties.
Related Content You Might Have Interest In
- What Qualifies as an ATA Carnet Shipment?
- Why Would One Choose to Use an ATA Carnet Over the Other Options?
- Who are the Parties to the ATA Carnet?
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