What is a Carnet Bond?


The use of a Carnet allows a principal to avoid posting of financial security at the time of entry, eliminates value added taxes (VAT) and simplifies customs procedures. This is done under the premise that the goods being imported will leave the country in the same condition that they were entered and will not be sold. It provides for unlimited exits and entries into countries that participate in the Carnet program.

While our office primarily writes U.S Customs bonds, we recognize that many of your clients may require the use of a Carnet, and we are able to assist you with the placement of Carnet bonds, which are required to secure a Carnet. Examples of principals who may need a Carnet, and therefore this bond, include movie production crews, sales representatives, trade show participants and musicians.

Most Carnet bonds are of the single transaction nature, that is, your account must secure a Carnet bond in order to fulfill the bonding requirements for a particular trip / transaction. Annual Carnet bonds are used by members of the U.S. Council for International Business (USCIB) to meet all of the bond obligations that member may have in the year. Generally this bond will cover the member, as well as all of its subsidiaries (without needing to specifically list each entity) on the bond. These bonds have a term of January 1 through and including December 31st of a particular calendar year. The USCIB generally contacts each member who would qualify for a bond in October, reminding them to post a bond for the next period, and advising the bond amount the USCIB feels is required.

Carnet bonds are governed by the USCIB and parties interested in obtaining a Carnet should contact the USCIB for the appropriate application. Once the application is made, the principal should contact your office to secure a bond. Assuming all underwriting conditions are met, these bonds may be issued as quickly as the same business day as they are requested.