In our office’s November 3, 2011 newsletter our office included an article on Carnet bonds. As a reminder, 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.
The United States Council for International Business (USCIB) is the U.S. entity which issues the carnets. Many companies that participate in the carnet program on a regular basis become members of the USCIB. The USCIB has advised that they will be issuing letters, or in some cases have already issued the letters, to their members advising the members the bond amount required for that member’s annual carnet bond. In some instances the bond amount for a member’s annual carnet bond may be in an amount upwards of $10 million. Our office recommends you speak with your accounts to determine if they are members of the USCIB and determine if an annual carnet bond is being placed on their behalf outside of their existing surety programs. Often times companies obtain this bond from a third party surety and therefore do not gain the benefit of the account rate for the company’s existing surety program. If C.A. Shea can be of any assistance in the placement of one of these bonds, please contact the Bond Department in our office at (908)897-0990.