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The art of customs clearance.

SECURITY PROFESSIONALS ARE often called on to travel to foreign countries on business. But the problems that accompany carrying commercial equipment abroad can make the journey more of an adventure than a business trip.

Business travelers must declare all commercial equipment. This includes equipment that will be used for demonstrations or for a one-time application and then immediately brought back to the United States. A temporary customs deposit is required to assure customs that the equipment will be reexported; and when the equipment is brought back to the United States, US customs normally insists on proof that the equipment was manufactured domestically or that import duties were paid previously.

Different procedures can be used to make the commercial traveler's life easier. Business travelers can choose one of three ways to get equipment through customs.

* Post a customs bond. This can be done through a customs broker or by leaving a cash deposit using a bank draft or the local foreign currency.

* Obtain a carnet (pronounced karnay). A carnet is a special customs document issued by the US Council for International Business (USCIB) that enables travelers to carry or send most kinds of goods temporarily into participating foreign countries without paying duties, posting bonds, or wasting time with customs red tape.

* Try to slip through, and if caught, plead ignorance.

The last alternative may prove to be the most challenging and will certainly make an exciting try for the folks back home--that is, if the local authorities allow postcards to be sent from the calaboose.

The first alternative, customs bonds, can be expensive. If the traveler leaves a cash deposit at the border, it can take six months for the money to be refunded. Normally, a deposit equal to 35 percent of the value of the equipment plus any sales tax is required.

Some business travelers hire a customs broker to handle the customs bond paperwork and save them time and money. If the individual arranges for this service in advance, the broker will meet him or her in the baggage area and have most of the papers ready for processing. The broker will put up a bond guaranteeing payment to customs of 35 percent of the equipment's value if it is left in the foreign country.

The cost of the broker's charge for services is the bond fee, which is considerably less than the cash deposit, plus a service fee of $100 to $200, depending on the difficulty of the procedure. Exhibit 1 gives some examples of the relative costs of customs bonds and customs broker.

The second option, a carnet, may be the best. Anyone with reason to take equipment or sample overseas--engineers, technicians, exporters, salespeople, executive, filmmakers, musicians--can benefit from a carnet.
Customs Deposit Versus Brokers' Fees
Country Value Deposit Broker's Charge
Ecuador $9,000.00 $3,150.00 $240.00
Canada $12,590.00 $3,978.00 $213.00

Carnets are as easy to use as traveler's checks. More than 200,000 were issued worldwide in 1989.

When exiting the United States, travelers using carnets should make sure that the customs agents put the return stamps in the proper places and fill out the appropriate papers. Carrying a copy of the original invoice or proof of payment showing when the equipment was purchased is always helpful. This seems to impress customs agents, especially when returning to the United States.

At present, the following countries honor carnets: Australia, Austria, Belgium, Bulgaria, Canada, Canary Islands, Cyprus, Czechoslovakia, Denmark, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Hungary, Iceland, India, Ireland, Italy, Japan, Malaysia, Malta, Mauritius, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Senegal, Singapore, Spain, South Africa, Sri Lanka, Sweden, Switzerland, Turkey, the United Kingdom, and the former Yugoslavia.

Countries are always being added to the carnet system, so travelers should check with the USCIB if the country they wish to visit is included in this list.

Carnets are generally issued and administered by chambers of commerce in the participating countries through the International Chamber of Commerce (ICC) in Paris. Congress passed legislation implementing the carnet program in October 1968. The USCIB was then appointed by the Treasury Department to govern and administer the Admission Temporaire/Temporary Admission (ATA) carnet system in the United States.

The ATA carnet convention allows for two broad categories of goods to be covered by the carnet:

* Commercial samples. All items that are temporarily imported solely for the purpose of being shown or demonstrated in the territory of importation for soliciting orders for those items.

* Professional equipment. A category including but not limited to equipment for the press or for television broadcasting; cinematographic equipment; equipment for construction, for testing, or for repairing machinery; tools and sporting goods; and topographical, engineering, surgical, electrical, archaeological, musical, and entertainment equipment.

Items such as paints, cleaning materials, food, leaflets, and other consumable items that are either given away, disposed of, or used abroad are excluded from the carnet system. Also excluded are those items that are already sold or offered for sale. The USCIB provides additional information about what items can be covered by a carnet.

A carnet is valid for one year from the date of issuance. Within that year, a carnetholder may visit as many countries in the system as he or she wishes. A traveler may also reenter and leave the United States as many times as he or she wishes. Extensions cannot be granted, and all items that are covered on a carnet must be returned to the United States by the time the carnet expires.

In the event that a carnetholder sells, donates, or otherwise disposes of the goods listed on the carnet, he or she is responsible to the customs authorities for all duties, taxes, and other charges involved in importing such goods into other countries. In addition, he or she is responsible to the USCIB for any costs that the council incurs in meeting its obligation as guarantor.

To secure a carnet, the exporter should request an application form from the USCIB and return the form with a full, itemized list of merchandise; payment of the issuing fee; and either a certified check, an insurance bond, or a bank letter of credit in the amount of 40 percent of the total value of the merchandise listed.

The bond may be arranged through the council. A traveler through the council. A traveler can use any bonding company that is authorized to underwrite this type of coverage. Usually a corporate insurance carrier can advise travelers on this procedure. The current charge for a carnet bond is 1 percent of the value of the equipment, with a minimum charge of $20.

The USCIB reserves the right to decline a carnet and hold any security for a period of up to 30 months from the date the carnet is issued. As a result, any letter of credit or bond should have an expiration date of 30 months. This 30-month guarantee period is essential because the USCIB is liable during that time.

This time frame is broken down into three parts: the carnet validity period of 12 months; a further 12-month period during which any claims against the carnet must be received under international convention; and six-month allowance for finalizing any claims. If the USCIB anticipates no problems or claims, the security posted will be cancelled within two weeks from the time the carnet document is returned to the USCIB.
ATA Carnet Fee Schedule
Value of Merchandise Carnet Fee
$0.00 to $ 4,999.99 $120.00
$5,000.00 to $14.999.99 $150.00
$15,000.00 to $49.999.99 $175.00
$50,000.00 to $199,999.99 $200.00
$200,000.00 to $499,999.99 $225.00
$5,000,000.00 or more $250.00

To apply for a carnet, write to USCIB, 1212 Avenue of the Americas, New York, NY 10036; phone: 212/354-4480; or fax: 212/575-0327. Ask for other locations throughout the United States.

Samuel W. Daskam, CPP is president of Information Security Associates Inc., in Stamford, Ct, a manufacturer of equipment used to locate eavesdropping devices. He is a member of ASIS.
COPYRIGHT 1992 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Daskam, Samuel W.
Publication:Security Management
Date:Oct 1, 1992
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