A Carnet (specifically the ATA Carnet) is nicknamed the Passport for Goods. It is an international customs document that allows you to temporarily import goods into a country duty-free and tax-free for up to one year. In the heavy equipment industry, this is a vital tool for trade shows, demonstrations, and temporary projects.
Without a Carnet, if you ship a prototype crane to a construction expo in Munich, German Customs would treat it as a permanent import, charging you the full 19% VAT and import duties — cash you might not get back for months, if at all.
When to Use a Carnet
You should use a Carnet if the machinery is coming back to the U.S. in the same condition it left. Common scenarios include:
- Trade shows: Displaying a new harvester at Agritechnica in Germany.
- Professional equipment: Sending a specialized drilling rig to Canada for a 3-month soil testing contract.
- Commercial samples: Shipping a forklift to a potential distributor in Brazil for a two-week trial run.
Boomerang Rule
The golden rule of the Carnet is that what goes out must come back. You cannot sell the equipment while it is abroad under a Carnet. If your prototype crane gets bought by a customer at the trade show, you are in a Carnet violation.
You will have to go through a complex process to convert the temporary import into a permanent one, paying all the deferred duties, taxes, and likely a penalty fee to the local customs authority.
Bonding and Fees
To get a Carnet, you must post a security bond (usually 40% of the value of the goods) with the issuing agency (like the U.S. Council for International Business). This bond ensures that if you disappear or sell the machine illegally, the foreign customs agency still gets its money. For high-value yellow iron, this bond can be substantial, so budget for the surety fee.
Valid Countries List
Not every country accepts ATA Carnets. While most of Europe, Australia, and major Asian economies do, many nations in Latin America and Africa do not. If you ship to a non-Carnet country, you will need to use a different method, such as a Temporary Import Bond (TIB), which is processed directly with the destination customs rather than originating in the U.S.