Our Firm Helped Client Defeat $400K+ Demand in Customs Duties & Fees
Traveling under an ATA carnet, our client’s US originating artwork was exported for exhibition overseas. The benefit of using a carnet for exhibition, that is, where the goods are intended to be exported temporarily, is that the payment of customs duties is waived upon importation in to the foreign destination rather than having to incur the payment of duties on goods which are not intended (or offered) for sale, nor even intended to enter into the stream of commerce in that country.
Explanation of a Carnet
A carnet is like a “passport” for merchandise, which contains a list of the specific merchandise for temporary export. It is shown to the destination country’s customs office upon import, and thereafter must be re-declared to them upon leaving the country so that confirmation that the export of the listed merchandise did, in fact, occur. Without such re-declaration and the stamps and signatures in the carnet evidencing the departure of the goods from the country, a demand for the unpaid duties would ordinarily follow (albeit, several months later typically) as that customs agency can only presume that the goods remained in the country – as opposed to solely passing through for temporary purposes and ultimately leaving.
With respect to our client, while the artwork entered in to the foreign destination under the carnet, the freight forwarder which handled the inbound delivery never returned the carnet to our client. Despite providing the overland transit from the exhibition to the foreign port for export, they never turned it over to the forwarder handling the export to the next country either, so that the presentation of the carnet to the local customs office prior to the artwork’s departure could be made. The carnet therefore did not contain any of the stamps or indications, nor had any record of it been created in the database of the foreign customs authority.
Through our cross-continental effort, our team was able to provide certain forms of proof to the US Council for International Business (USCIB) – the US agency that liases with foreign customs agencies and representatives to resolve problems arising with carnets – to substantiate that an export of these one-of-a-kind artworks did, in fact, occur. As a result, we were able to meet the burden of proof required, and the claim for over $400,000 (USD) in duties and fees was rescinded.
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