Question

Q1..Give a detail explanation of ATA Carnets. Make sure to include description with example of product. History and types. Risks.

Q2.Explain Commodity classification in details and in your own words

Answer 1

1) ATA Carnets refer to the customs and temporary export-import documents that are accepted internationally for boomerang freight. With the help of this document, the temporarily exported merchandise or equipment becomes duty and tax free at the carnet countries for up to one year. These items listed on the carnet return to the US at the end of the year, which has resulted in the term boomerang freight. It further serves as the registration of goods for re-entry into this country without any duty or tax. Boomerang freight include items such as aircraft, robots, yachts, antiques, artifacts, demo equipment, livestock, musical instruments, photography and video equipment, repair and testing tools, trade show booths and others.

Various benefits of an ATA carnet include customs document accepted worldwide, elimination of duties and taxes for temporary imports across 87 countries and territories, applicable for unlimited exports or imports up to one year, known costs, saving time and money and helps in expansion of export business.

Another type of carnet used is the special and bilateral TECRO/AIT carnets between US and Taiwan because the latter is not involved in the worldwide ATA Carnet system. These TECRO/AIT Carnets are accepted by Taiwan for commercial samples and professional equipment.

There are several risks associated with the goods on an ATA Carnet as they are unpacked, used and displayed for a long time period after delivery and then gets repacked and shipped to next location. Besides, it excludes the losses arising out of transit.

2) Commodities are mainly classified into four groups. Class I consists of non combustible products like paper wrappings, wooden or non-expanded deck pallets. Class II is the items in the Class I stored in combustible packages like empty boxes. Class III consists of products made from paper, wood or natural fiber material and Class IV include plastic products in ordinary ribbed cartons. Furthermore, Group A plastics are considered the most combustible, while Group B possesses lower combustion and burning rate. Group C plastics consist of the lowest risk of fire while high hazard commodities refer to the ones with the highest risk of fire and danger because of high combustion rate.

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