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Insurance and Bond

Financially Secure your ATA Carnet with a Carnet Bond as Required

The United States Council for International Business requires that all U.S. ATA Carnets be financially secured.

  • ATA Carnets can be secured with either a surety bond or certified check in an amount equal to 40% of the value of the General List. ( India requires a 55% bond and Brazil requires a 60% bond. Road vehicles exported by a company require 100% security and exported by an individual require 150%.)
  • A surety bond fulfilling this requirement can be applied for at the same time you apply for the ATA Carnet.
  • You may be requested to supply financial information such as a tax return or financial statement to satisfy the underwriting requirements of the surety company after you submit your carnet and bond application.
  • Calculate an estimated premium for the surety bond using the ATA Carnet Budget Worksheet or multiply the value of the merchandise times 40%. The resulting product is then multiplied by $10.00 per thousand. For example: $100,000 General List Value x 40% = $40,000. 40 x $10.00 = $400. surety bond premium. There is a $100 minimum premium. (Note the 100% or 150% bond requirement for road vehicles.)

Is it Insurance?

The surety bond is not insurance. It guarantees payment of duties and taxes to customs if you, the carnet holder and principal on the bond, are not able to fulfill your obligations under the terms of the carnet and carnet bond. For this reason it is important that you understand the responsibilities of a carnet holder.

What Does the ATA Carnet Bond Say?

At the time of approval of your application your bond will be provided digitally and signed digitally. However, you may download a copy of the bond here for review. If you decide to get your bond from another source, be sure to utilize the bond form wording provided on the downloaded form. Otherwise the bond cannot be accepted.

 

ATA Carnet Guidelines on Insurance

The ATA Carnet issuing authorities have made a formal statement concerning the need for insurance of the goods and equipment listed on a carnet. The ATA Carnet Handbook, Part Four, Annex B, Article 7, recommends that the carnet user have a suitable insurance policy since loss or destruction of the goods will not cause customs to abandon their claim on duties and taxes. In other words, if you cannot prove that the goods were exported because they were lost, destroyed or stolen, you will still be responsible for paying duties and taxes on those goods. That you were a victim of a crime or that the goods were lost through no fault of yours does not absolve you of the responsibility to export the goods or pay the duties and taxes.

Here is the actual statement from the IBCC (now called WATAC - the World Customs ATA Carnet Council):

Annex B - Statement on the ATA System - Adopted by the IBCC - Article 7

The issuing Chambers of Commerce recommend that the beneficiary of the carnet to sign an inclusive insurance policy against theft, fire or destruction, as customs authorities do not normally agree to abandon claims with respect to the payment of duties on goods lost or destroyed.

Note that not all commercial insurance policies continuously cover goods in transit or storage outside the US. However, there is Temporary Transit and Storage Insurance that addresses the unique risks and exposures of ATA carnet equipment and merchandise. It fills gaps that frequently exist in domestic insurance policies and policies that might be available using a freight forwarder.

 

For more information contact a Carnet Specialist at the boomerang carnets® Carnet HelpLine®: 1-800-ATA-2900 / 1-800-282-2900 or e-mail us.
Boomerang carnets® offers easy-to-obtain temporary insurance coverage for both commercial samples and professional equipment traveling overseas under an ATA Carnet.