Following on from previous learning modules where we learned about the uses, benefits, and requirements of ATA Carnets, we are dedicating this module to ATA Carnet claims – the process a Carnet goes through when it is used incorrectly and what Carnet Holders must do.

Recapitulating, an ATA Carnet is an international customs document also known as “the passport for goods” that permits the duty- and tax-free temporary importation of non-perishable goods for up to one year. ATA Carnets simplify and expedite customs formalities for traders temporarily importing goods into countries participating in the Carnet system by allowing a single document to be used for clearing goods through customs in multiple destinations and trips throughout its one-year validity.

All Carnets have a Carnet Holder (shown in Box A of the document); this is the person responsible for ensuring that the Carnet is used correctly, and who is liable for any claims or enquiries received for the incorrect use of the document. Whilst Carnet Holders aim to use the Carnet correctly, there may be occasions where this may not be possible, and this learning module has been created as guidance for the Carnet Holder to know what to do in these cases and how to avoid Carnet Claims from Foreign Customs and their consequential charges.

Whilst the active validity of an ATA Carnet is only 12 months, its overall “life span” is 33 months depending on the usage of each Carnet individually and whether it can be discharged by the Issuing Chamber or not. This 33-month period is broken down into the categories below:

First 12 months: 1 Year period of Validity for the Carnet from the date of Issue.

This is the timeframe in which the ATA Carnet can be used to temporarily import and re-export the goods, given that its security has been covered for the same period. During the first 12 months, it is the Carnet Holder’s responsibility to ensure that the Carnet has been stamped correctly by Customs Officers on each of their inward and outward journeys. Below is an example of a Carnet being used correctly and the reasoning behind:

• The Carnet has been stamped by UK Border Force on the initial outbound Journey on the 7 November 2022 (green page).
• Items 1-6 were stamped out (exported) of the UK on 7 November 2022 on the exportation counterfoil on departure from the UK (yellow page). At the same time the endorsement took place, UK Customs retained the corresponding exportation voucher as evidence of the exportation.
• Items 1-6 were stamped into (imported) Switzerland on 9 November 2022 on the importation counterfoil on arrival to Switzerland (white page). Swiss Customs authorities retained the corresponding importation voucher.
• Items 1-6 were stamped out (re-exported) of Switzerland on the corresponding white re-exportation Counterfoil on 3 January 2023. Swiss customs retained the corresponding re-exportation voucher. This re-exportation endorsement confirms that all six items temporarily imported into Switzerland under the ATA Carnet were subsequently re-exported within the validity of the Carnet.
• Items 1-6 were stamped as reimported back into the UK on 4 January 2023 on the corresponding yellow reimportation counterfoil. UK Customs authorities retained the corresponding reimportation voucher. This reimportation endorsement confirms that all six items returned to the UK.

Second 12 months: 1 Year period for Foreign Customs to lodge a claim if they determine that the ATA Carnet has not been used correctly.

Keeping in mind that both local and foreign Customs retain a voucher for every counterfoil they stamp, they will match every voucher with its corresponding counterpart to confirm the goods have departed from the country of temporary importation and returned to the UK. Customs will match export + re-import vouchers (UK Customs) and import + re-export vouchers (Foreign Customs) and verify that the same items were declared at each point and that all goods’ movements were done within the applicable deadlines.

If at this point Foreign Customs determine that a Carnet has not been used correctly, they will lodge a claim with UKNATACO (The UK’s National ATA Carnet Guaranteeing Organisation). UKNATACO will then advise the Issuing Chamber that Foreign Customs have presented a claim against said Carnet and the Issuing Chamber will in turn contact the Carnet Holder to advise them of the claim and provide them with instructions of what needs to be done.

There are multiple reasons as to why a claim may be lodged, and they don’t necessarily mean that a Carnet has been misused.

On this subject, the EU poses a unique situation for Carnets because the goods can be imported into the Community through one country but be re-exported from a different country whilst still being within the EU. For example, goods travelling to the EU through France – Calais on the first import journey and travelling out of the EU through Spain – Algeciras on the export journey. In this particular case, French Customs will only hold evidence of the importation of the goods (via the importer voucher they retained) but will have no evidence of the subsequential exportation of the goods (re-exportation voucher) as this will be in the hands of Spanish Customs authorities; therefore it will be expected that French Customs lodge a claim against that ATA Carnet.

The same principle applies if travelling to the USA, if entering through one state (i.e. flying into LAX) but departing from another one (flying out of Miami). These claims, although not to the Carnet Holder’s fault, still need to be addressed by the involved parties.

The digitalisation of ATA Carnets will reduce most of these “unnecessary claims” as Customs Authorities worldwide will have visibility of the entire journey the Carnet has been through, but whilst the digitalisation continues to develop and until it becomes a formal part of the Carnet process and use, Carnet Holders must be aware of any potential claims.

Another frequent reason for claims to be lodged is that of the goods overstaying in the country of temporary admission. Although ATA Carnets are valid for 12 months, Foreign Customs can still impose a shorter “time-limit” to the period in which the imported goods can remain in a particular Customs territory. In other words, receiving Customs can decide how long the goods will be allowed to remain in their territory. This time-limit will be stated on the export, import and transit counterfoil and Carnet Holders must ensure they don’t exceed this period to avoid the risk of being penalised.

In the below example the time limit imposed on the Carnet was 30/05/2014. However, the goods weren’t re-exported until June 2014. This caused Foreign Customs to lodge a claim for which the Carnet Holder was liable.

Another scenario is where the transit counterfoil is “opened” (stamped in) but is not “closed” (stamped out) on exit from the country of transit, then local Customs will lodge a claim for the misuse of this carnet.

Other common scenarios where a claim against a Carnet can be lodged by Foreign Customs include but are not limited to the below:

• The Carnet Holder declared the incorrect items at import, transit, and re-export.
• Not all goods have been re-imported into the UK (partial re-export from the visited country).
• Customs authorities at the port retained but mislaid the Voucher.
• The Carnet re-export and/or reimport counterfoils were not stamped (no Customs Authorities available at time of crossing, Carnet Holder was in a rush, etc).

In any instance where the Carnet Holder is unsure of how to proceed whilst using a Carnet, we strongly recommend contacting the corresponding Issuing Body, who will be able to advise on any particular or complex scenario.

Next 6 Months: This period should be used for the Carnet Holder to submit admissible evidence to Foreign Customs (via the Issuing Chamber) to close the claim.

During this period, the Carnet Holder will have the opportunity to present evidence to the claiming Customs that the goods had been re-exported out of their territory.

Below is an example of a Carnet that has not been used correctly. Whilst the importation counterfoil was stamped by US Customs to confirm that items 1-20 have been imported to the USA, the re-exportation counterfoil was not stamped and therefore there’s no evidence to show that any of these 20 items have been re-exported out of the country. The US Customs would have consequently lodged a claim. The Carnet Holder has three options in this scenario:

• If the goods were indeed reimported into the UK, the Carnet holder will need to send their Issuing Body a scanned copy of the reimportation counterfoil which show that the goods returned to the UK. Please note a regularisation fee will be applicable and the rate varies depending on the claiming country.
• If the Items returned to the UK, but the reimportation counterfoil was not stamped accordingly, the Carnet Holder will need to obtain a Certificate of Location from the National Carnet Unit (NCU) by emailing them to atacarnetunit@hmrc.gov.uk with the below information:
  • A Copy of the Green Front cover of the Carnet or a copy of one of the vouchers.
  • A contact name, address, and telephone number.
  • The address where the goods are located (for the inspection of the goods on site).
  • A copy of the General List.
  • Put “COL” (Certificate of Location) in the subject line of the email
• If the goods are still in the country of temporary importation, the Carnet Holder would have to pay duty to the host Customs.

·Final Three Months: Payment of claim

The Issuing Chamber will send different letters to the Carnet Holder depending on the discharge or claim status of the Carnet. The below description of the Carnet letters will give clarity and guidance as to what each letter means, and what is expected from the Carnet Holder.

Discharge Letter – The Carnet has been received back by the Issuing Chamber and there’s evidence that the Carnet has been used correctly. No further action is required from the Carnet Holder.

GEN 1 Letter – The Carnet has not been used correctly. The Carnet Holder needs to provide the Issuing Body with proof that the goods have returned to the UK within the time-limit imposed on the Carnet OR obtain a Certificate of Location from the NCU. At This point, no claim has been received by Foreign Customs, but the Issuing Body has identified a problem in the Carnet that could lead to a claim.

A Letter – Foreign Customs have lodged a claim against the Carnet. The Carnet Holder must provide the Issuing Body with evidence that the goods returned to the UK or left the country of temporary importation. At this point UKNATACO and the Issuing Body have received a formal claim from Foreign Customs.

C Letter – Two months after A Letter is sent and if no response is received from the Carnet Holder, the Issuing Body will send a first reminder that there is a claim awaiting to be resolved against the Carnet.

I Letter – Two months after C Letter is sent, the Issuing Body will send a final reminder that there is still a claim pending against the carnet. At this stage the Carnet Holder will have only 2 months to submit evidence to the Issuing Chamber to avoid charges.

G Letter – Two months after I Letter, Foreign Customs would have calculated the corresponding charges and penalties against the Carnet. At this point, a payment is now due, which should be paid via the Issuing Chamber.

H Letter – One month after G Letter, the final payment reminder will be sent by the Issuing Body to the Carnet Holder. The payment of the charges is now due immediately.

LCCI’s recommendations to Carnet Holders on how to prevent potential claims reaching the chargeable stage are as follows:

• Make coloured scan copies of the Carnet as soon as you’ve finished using it and keep them for your records for at least from 33 months from the issuing date.
• If you notice your Carnet has not been stamped back into the UK, contact the NCU immediately to request a Certificate of Location OR if returning via seaport or Roro port, contact Boder Force at that Customs Office and ask if they’d be willing to stamp the Carnet retrospectively. (Retrospective Carnet endorsement is not available at airports).
• If the Carnet goods are carried by a third party (i.e. a freight forwarder), ensure they fully understand the Customs endorsement process and know where and how to get the Carnet stamped at each part of the journey. This is of extreme importance as any error made by the Carnet user will reflect on the Carnet Holder.
• If the Carnet has been lost, obtain a Certificate of Location as soon as you can as this will answer any claims that might arise from Foreign Customs.
• Ensure that any “open” Transits are “closed” on exit from the transited country.
• Do not exceed any time limit imposed by Foreign Customs on your Carnet.
• Speak to your Issuing Chamber for support and guidance on how to use your carnet correctly.

ATA Carnets are a great tool to support businesses with the temporary import of goods to Carnet scheme countries as they suspend the import duties and taxes, and expedite customs formalities, however, if not used correctly, they pose a risk of charges and penalties imposed from Foreign Customs to the Carnet Holder.

For further information and guidance on ATA Carnet and Carnet claims please contact the LCCI Carnet team.

You can access previous Learning Module: ATA Carnets – Your passport for goods.

Produced by Nickie Dalton, Head of Trade Documents and Services.