The Art of Customs Clearance

By Daskam, Samuel W. | Security Management, October 1992 | Go to article overview

The Art of Customs Clearance


Daskam, Samuel W., Security Management


SECURITY PROFESSIONALS ARE often called on to travel to foreign countries on business. But the problems that accompany carrying commercial equipment abroad can make the journey more of an adventure than a business trip.

Business travelers must declare all commercial equipment. This includes equipment that will be used for demonstrations or for a one-time application and then immediately brought back to the United States. A temporary customs deposit is required to assure customs that the equipment will be reexported; and when the equipment is brought back to the United States, US customs normally insists on proof that the equipment was manufactured domestically or that import duties were paid previously.

Different procedures can be used to make the commercial traveler's life easier. Business travelers can choose one of three ways to get equipment through customs.

* Post a customs bond. This can be done through a customs broker or by leaving a cash deposit using a bank draft or the local foreign currency.

* Obtain a carnet (pronounced karnay). A carnet is a special customs document issued by the US Council for International Business (USCIB) that enables travelers to carry or send most kinds of goods temporarily into participating foreign countries without paying duties, posting bonds, or wasting time with customs red tape.

* Try to slip through, and if caught, plead ignorance.

The last alternative may prove to be the most challenging and will certainly make an exciting try for the folks back home--that is, if the local authorities allow postcards to be sent from the calaboose.

The first alternative, customs bonds, can be expensive. If the traveler leaves a cash deposit at the border, it can take six months for the money to be refunded. Normally, a deposit equal to 35 percent of the value of the equipment plus any sales tax is required.

Some business travelers hire a customs broker to handle the customs bond paperwork and save them time and money. If the individual arranges for this service in advance, the broker will meet him or her in the baggage area and have most of the papers ready for processing. The broker will put up a bond guaranteeing payment to customs of 35 percent of the equipment's value if it is left in the foreign country.

The cost of the broker's charge for services is the bond fee, which is considerably less than the cash deposit, plus a service fee of $100 to $200, depending on the difficulty of the procedure. Exhibit 1 gives some examples of the relative costs of customs bonds and customs broker.

The second option, a carnet, may be the best. Anyone with reason to take equipment or sample overseas--engineers, technicians, exporters, salespeople, executive, filmmakers, musicians--can benefit from a carnet.

Customs Deposit Versus Brokers' Fees
Country         Value        Deposit         Broker's Charge
Ecuador       $9,000.00     $3,150.00           $240.00
Canada        $12,590.00    $3,978.00           $213.00

Carnets are as easy to use as traveler's checks. More than 200,000 were issued worldwide in 1989.

When exiting the United States, travelers using carnets should make sure that the customs agents put the return stamps in the proper places and fill out the appropriate papers. Carrying a copy of the original invoice or proof of payment showing when the equipment was purchased is always helpful. This seems to impress customs agents, especially when returning to the United States.

At present, the following countries honor carnets: Australia, Austria, Belgium, Bulgaria, Canada, Canary Islands, Cyprus, Czechoslovakia, Denmark, Finland, France, Germany, Gibraltar, Greece, Hong Kong, Hungary, Iceland, India, Ireland, Italy, Japan, Malaysia, Malta, Mauritius, the Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Senegal, Singapore, Spain, South Africa, Sri Lanka, Sweden, Switzerland, Turkey, the United Kingdom, and the former Yugoslavia. …

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