Supply Chain News / Risk & Compliance / Economic Development

Rules are Changing for CARNETS; Public Comment Needed

ATA Carnets serve as passports for freight that enters and then quickly leaves a country. The Carnet document, established by the World Customs Organization, serves as a "passport for freight" that is not applicable to traded or exported goods but rather is used to facilitate temporary shipments that are intended to be removed from the country they have recently entered --- typical examples of this are trade show goods, conference supplies, museum displays and equipment for film, TV, sports and musical tours.

A recent change to the U.S. Census Bureau's Foreign Trade Regulations revokes an exemption for ATA Carnets from having an Electronic Export Information (EEI) filing when leaving the United States. This means that shipments traveling under ATA Carnets will now require a "line-by-line" classification filing for each and every good being shipped. This requirement will could cause a significant burden to shippers and forwarders who will incur substantial labor costs and liability to meet the requirement. In fact, one AfA forwarder member estimates that his company will require 7-8 additional staffers at an annual cost of $455,000 once the change's 180 day informed compliance period ends and the mandate begins on Oct. 2, 2014.

The Airforwarders Association accepts that EEI classification filing information makes sense for exported products, as the exporting country wants accurate trade statistics and the importing requires an accurate description of imports for revenue and security purposes. But unlike goods being exported, freight under a Carnet either returns to the United States or proceeds to another Carnet-signatory country for another temporary stay before eventually returning to the United States. There is no need for export data collection and the importing country does not need to worry about the security risk since CBP looks at each individual Carnet before the cargo departs the United States, all of the cargo is physically screened as per TSA regulations before loading onto the aircraft and the principal on the Carnet is a legitimate entity that has a bond guaranteeing the Carnet in advance of its issuance.

The Carnet changes were included with others made with regard to the filing of export documentation under the Automated Export System, all of which will be subject to vigorous enforcement by U.S. Customs and Border Protection. Prior exemptions will no longer be recognized.

This was an oversight and have requested that Census and CBP reinstate the Carnet exemption. In addition, we have made inquiries to relevant committees both in the House and Senate on Capitol Hill.

If you feel that the movement of trade show goods, conference supplies, museum displays and equipment for film, TV, sports and musical tours will be severely disrupted by this regulatory change, we need to hear from you by Friday July 18th. Importantly, we are pulling together evidence of the impact this will have on forwarders and the customers they serve, so we would greatly appreciate your estimate of the cost and labor impact on your organization. This information will help us demonstrate the need to reinstate the exemption.

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