Carne Documents - Tariff Rate Exemptions for Temporary Imports

Carnet Documents: Tariff Rate Exemption for Temporary Imports

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In yesterday’s article, we reviewed the concept of duty drawback, which is a way for companies exporting goods to the U.S. for value-added services to get a full refund on the duty or tariff they pay to Customs for the import. This is an option for shippers since the goods are being re-exported from the country and are only here temporarily. However, in the case of value-added services, there is a 5-year window that the goods can be re-exported under in order to claim the duty drawback.

For companies who are importing to the U.S. for more temporary work not associated with re-manufacturing or value-added services (trade show, showcase, lab studies, etc.), something called a Carnet document must be used.

Carnet Document

The Carnet document (kar-nay) is used for temporary imports and exports and is applicable to 87 different countries. It grants permission to a shipper to move their products in and out of a country without having to pay duties. This differs from a duty drawback, in which a shipper must pay the duty and later file a claim to be refunded their tariff payment.

A Carnet is applicable to goods that are being re-exported within 12 months of their entry to the foreign country. This can be viewed similarly to how a Passport works for people traveling abroad. The Carnet is a Passport of sorts for goods going to a different country.

What Goods Can Be Shipped with a Carnet?

The answer is – pretty much all types of goods/merchandise. Commercial samples, equipment, and merchandise/goods for trade shows and exhibitions are a few of the most commonly shipped Carnet items.

The only types of goods that cannot be shipped with a Carnet document are:

  • Agricultural Products
  • Explosives
  • Disposables
  • Postal Traffic

The primary concern here relates to both safety and longevity. Importing perishable items would allow shippers to get away with shipping products that will be consumed in under 12 months without paying the rightful tariff. Food items, explosives, and disposables would all fall under this category. Postal traffic is not allowed to be moved with a Carnet since it is bypassing the international postal services/tracking.

Conclusion

A Carnet document is a rather simple concept. It allows companies to move goods overseas temporarily without having to pay an import tariff. So long as the goods are re-exported from the country within a 12-month period, the shipper will be granted a duty exemption. This differs from duty drawback, in which a product is imported to a country for value-added services and must be re-exported within 5 years. In duty drawback, the shipper must pay the duty rate and then later files for a tariff refund after the goods have been re-exported.

 

If you are planning on moving your goods internationally for trade shows, exhibitions, lab studies, or any other temporary reasons, reach out to one of our team members! We would be happy to get you set up on a Carnet document and assist with the move to keep you from paying unnecessary duty rates.

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