Export costing sheet for breakbulk

shipments
Export costing sheet for breakbulk shipments
Quoted to:
Address
Date
Commodity
HS Classification
Unit
Gross weight (kg) Weight per unit (kg)
Cubic capcity (m3) Units per ton
Exchange rate: R1,00=US$
South African Rands US Dollar
Basic (ex-factory) cost
Special labelling & packaging
Packing, strapping and bundling
Marking
EX-WORKS PRICE $0.00
Transit insurance
Delivery to rail
Railage to port
Spoornet documentation fee
Railage ledger fee
Wharfage
Shipping fee
Forwarding agents fee
Export credit insurance
Financing charges
Agent's commission
f.o.b. PRICE $0.00
Ocean freight
C.fr PRICE $0.00
Marine insurance
c.i.f. price $0.00

Documentation for Import

Introduction

An essential feature of all import sales transactions is import documentation. There are
various categories of documents required in international trade transactions. This section
lists the basic documentation required for an import shipment. Not all the documents
listed below are required for every import transaction; many of them are applicable to
specific products or circumstances.

Enquiry Documents

Costing sheet: (see section on costing for export for information).

Quotation/offer to the importer

Pro-forma invoice: After receiving a quotation from the exporter, the importer may
request a pro-forma invoice. This is a preliminary invoice and is prepared prior to
shipment or even before a firm order has been received. The purpose is to enable the
importer to obtain an import licence (if required) or a letter of credit prior to entering into
the contract of sale.

Instruction Documents

Forwarder's instruction: Most freight forwarders have a printed forwarder's instruction

form, but the required information may also be printed on the exporters company
letterhead. Information required includes instructions for booking of cargo, information
for completing transport documents, description of goods as per the letter of credit etc.

Shipping instruction: Where a shipping company has a computerised bill of lading

system, it provides pre-printed shipping instruction forms which must be completed by
the exporter/freight forwarder. The bill of lading is drawn up from the information
provided on this form. If the exporter/freight forwarder prepares the bill of lading
independently, then a shipping instruction must be attached. However, many independent
shipping lines do not insist on the shipping instruction document.

Bank instruction: When the exporter is selling on the basis of a letter of credit, the
instructions stipulated in the letter of credit must be followed. However, if selling on the
basis of sight or usance draft under documentary collection, bank instructions must be
generated to secure payment for the goods. Information supplied would include
description of cargo, name of vessel, date of shipment etc; a detailed list of all documents
submitted; payment method etc.

Transport Documents

1. Bills of lading

The bill of lading is a contract of carriage and has three functions:

i) It defines in detail, the terms of the contract between the shipper and the
shipping line for the carriage of goods from one specified port to another.
ii) It is a formal, signed receipt for a specified number of packs e.g. crates,
drums etc. which is given to the shipper by the shipping line when the
shipping line receives the consignment. (It should be noted that the shipping
line denies all knowledge of quantity, quality, value or condition of the
contents of the packs.)
iii) It is a document of title (i.e. a certificate of ownership) to the goods. As such,
it must be produced at the port of final destination by the consignee in order
to claim the goods. As a document of title, the bill of lading is also a
negotiable document and the consignee may sell the goods by endorsing or
handing over the bill of lading to another authorised party, even while the
goods are still at sea. Although negotiable bills of lading are in common use,
some countries do not allow them or make it difficult to be used and exporters
should enquire whether it is accepted in the buyers country.

1. Bills of lading may be negotiable or non-negotiable: With

a negotiable bill of lading, ownership of the goods may be
transfered to a third party. The shipper marks the bill of lading, 'to
order' to ensure that the bill of lading may be negotiated by a third
party, e.g. the bank, through blank endorsement i.e. by signing on
the reverse side of the bill of lading. The third party is then able to
take ownership of the goods. The shipper can also ensure that the
bill of lading is only negotiated by the buyer by entering the name
of the consignee on the document, instead of 'to order'. The buyer
then has the option of transfering title of the goods to a third party
by endorsing in blank or to a named third party. Bills of lading can
become highly negotiable documents. All original bills of lading
are thus negotiable documents to some extent - it is only the copy
bills of lading that are absolutely non-negotiable.
2. A shipped bill of lading indicates that goods have been
loaded on board the vessel. This bill is required if payment is being
made on the basis of a letter of credit. (also known as an on board
bill of lading). A received for shipment bill of lading
acknowledges that the carrier has received the goods and are in the
custody of the carrier, but have not actually been loaded on board
the vessel. This may be used when there is congestion at the port or
in the case of dock strikes. Once the goods are on board, the bill of
lading is stamped 'on board', in accordance with the International
Chamber of Commerce (ICC) rules.
3. Clean and claused bills of lading: If the cargo is
apparently in good order and properly packed when received by
the shipping line, the bill of lading which the shipping line issues,
is termed 'clean'. The shipowner thus admits full liability for the
cargo described in the bill. If, however, a defect is noted such as a
bale is torn or a cask is leaking, a clause will added to the bill. The
bill then becomes 'unclean', 'dirty', or 'claused'. When an export
transaction is conducted on the basis of a letter of credit, banks will
refuse shipping documents bearing such clauses, unless the letter
of credit specifically states that they are acceptable, e.g. it may be
the custom of the trade to use second-hand packing, an aspect may
be noted as a defect.
4. Freight pre-paid or freight collect bills of lading: When
an exporter pays freight to the shipping line in advance, for
example on a c.i.f. basis, the exporter will acquire a bill of lading
marked freight pre-paid. However in instances when freight is
paid on arrival of goods, e.g. under an f.o.b. contract, the bill of
lading is marked freight collect.
5. Stale bills of lading: This is a bill of lading which has been
presented so late after the due date of delivery of goods to the port,
that as a result of the delay in its presentation, the consignee/buyer
has become involved in legal or administrative complications.
According to Uniform Customs and Practice for Documentary
Credits of the ICC, banks may refuse a transport document that is
presented more than 21 days after the date of shipment. The bank
may accept a stale bill of lading 'with recourse' if the buyer
repudiates payment on the basis of non -confirming documents, the
exporter must return the funds received. Preferably the shipper
should approach the buyer to have the letter of credit amended to
permit the presentation of a stale document, or indicate that the
documents will be accepted when presented.
6. There are different categories of the bill of lading:
 Charter party bill of lading: Normally if
commodities are to be transported in bulk (e.g. grain, coal,
oil etc), a shipper may charter (hire) a whole vessel by
entering into a contract of carriage with the shipowner, the
terms of which are embodied in a legal document called the
charter party. As this type of bill of lading does not contain
all the essential terms of the contract of carriage, banks will
refuse to accept it under a letter of credit unless instructed
to the contrary by the buyer.
 Through or transhipment bill of lading: It is
often necessary to employ two or more carriers to transport
a consignment of goods to its final destination. Shipping
lines issue bills of lading which cover the whole transit and
the shipper need only deal with the first carrier. Normally, a
through rate is quoted.
 Container bills of lading: These are issued by a
shipping line which engages in combined transport.
 Groupage/House bill of lading: Freight forwarders
are permitted to group various compatible consignments
from different consignors together, and to dispatch the
 cargoes as one containerised consignment. The shipping
line issues a 'master' bill of lading to the forwarder once the
full container has been loaded. The freight forwarder
cannot hand the original shipping line's bill of lading and
therefore issues a house bill of lading to the individual
shippers. At the destination, an agent of the forwarder
breaks down the consignment and distributes the goods
subject to an original house bill of lading being presented.
Under letter of credit, the banks may reject this form of bill
of lading unless it is specifically stated that this type of bill
of lading is acceptable.

A FIATA or other freight forwarder's combined transport bill of

lading can be used in the place of a forwarder's house bill of
lading. This is recognised by the ICC and according to UCP (1993
revision), will be accepted by banks in letter of credit transactions.
(FIATA translated from French, stands for International Federation
of Freight Forwarders Associations.)

7. Mate's receipt: Associated with the bill of lading in

respect of breakbulk consignments, is the mate's receipt. When
goods are loaded on board, they are inspected by tally clerks who
record the date of loading, number of individual packs etc and note
any defect or comment about the condition in which the goods are
received. On completion of loading, the ships officer signs the
mate's receipt based on the note of the tally clerks. If there are
adverse observations, the mate's receipt is qualified and is said to
be claused or unclean. If there are no adverse observations, the
mate's receipt is termed clean. The qualifications of the mate's
receipt are later embodied in the bill of lading which in turn is also
claused clean or unclean. A signed copy of the mate's receipt is
given to the shipper/freight forwarder once the goods have been
loaded on board ship, in exchange for the original bill of lading.
The full particulars of all bills of lading are entered on the ship's
manifest which contains the details of total cargo carried by the
ship and is a requirement of naval, port, customs and on occasion,
consular authorities.
8. Non-negotiable liner waybill: Containerisation increased
the speed with which cargo was transported and goods tended to
arrive before the importer received the bill of lading required to
take delivery of the goods. As a result, certain shipping lines
introduced an alternative to the bill of lading, the non-negotiable
liner waybill. This document provides for the automatic delivery of
cargo to a named consignee. In contrast, the bill of lading
document must reach the destination of the goods and be
surrendered to the carrier before delivery can be authorised.
 NOTE: The non-negotiable liner waybill is not a document of title
and must be made out to the consignee. It acts only as a receipt for
the cargo and as evidence of the contract of carriage.

2. Air waybill: This transport document serves as:

o documentary evidence of the conclusion of a contract of

carriage
o proof of receipt of the goods for shipment
o an invoice for the freight
o a certificate of insurance
o guide to airline staff for the handling, dispatch and delivery
of the consignment.

The document consists of three originals and nine copies and is only
issued in a non-negotiable form. The first original is intended for the
carrier and is signed by the shipper; the second original, the consignee's
copy, is signed by the shipper and accompanies the goods; the third
original is signed by the carrier and is handed to the shipper as a receipt
for the goods after they have been accepted for carriage. The copies are
dispatched by the airline authorities as required to on-carriers, airport
authorities, etc or they serve as delivery receipts, invoices etc. The
standard IATA air waybill applies to the carriage of goods over any
distance and by as many airlines as are required to convey the goods to
their final destination.

The air waybill is a fairly complex document and is seldom completed by

the exporter. The services of an airfreight forwarder are usually engaged
for this purpose and clear instructions should be provided by the shipper
noting any specific requirements if the transaction is under a letter of
credit. Most airlines and forwarders have a standardised form for this
purpose, the shipper's letter of instruction.

With the recent development of Electronic Data Interchange (EDI), it is

now possible for documents to reach the consignee before the goods have
even left the exporter's premises. This enables the consignee of
airfreighted goods to prepare customs clearance documentation in advance
of the goods' arrival and consequently avoids incurring storage charges at
the airport of destination.

2. Rail waybills:

Spoornet Combined Consignment Note and Truck Label (c.c.t.): This

is the official transport document in respect of carriage of bulk cargo by
rail. The c.c.t. consists of two stick-on labels and two identical tear-off
pages which constitute copies for the exporter and Spoornet respectively.
 Spoornet Freight Transit Order (f.t.o.): This is the official transport
document in respect of carriage of containers by rail. The f.t.o. consists of
five identical tear-off pages comprising a pricing copy, a checking copy, a
receiver's copy, a delivery note and a sender's receipt.

The c.c.t. and f.t.o. documents apply to transport within the borders of
South Africa and serve both as evidence of the contract of carriage and as
a receipt of goods. Unlike air or sea transport documents, the Spoornet
documents do not incorporate comprehensive conditions of carriage. The
provisions contained in the Spoornet tariff book form part of the carriage
contract and transportation is offered at 'railway's risk' or at 'owner's risk',
according to the particular circumstances of the transaction. Exporters
should therefore ensure that the relevant conditions are carefully noted.

3. Road waybill

There is no standard transport document for road haulage. Road hauliers

usually design their own waybills which serve as evidence of a contract of
carriage and as receipts for consignment of goods.

Insurance Documents

Marine insurance policy document

Certificate of insurance

See sections Credit Insurance and Marine Insurance for detailed information.

Customs Documents

The Department of Customs and Excise requires the following documents to clear
imports:

Bill of Lading/Air Waybill/ Road Hauliers Certificate

Commercial Invoice

Customs Worksheet

Bill of Entry (DA500)

A certificate of origin (DA59) is required for imports of certain strategic commodities or

imports of goods involved in anti-dumping charges (e.g.: shoes from Hong Kong, T-
shirts from China)

Exchange Control Documents

See section on Complying with Foreign Exchange Control Requirements for more
detailed information.

Payment Documents

Transport documents

Marine insurance documents

Draft (bill of exchange)

Pro-forma invoice Inspection certificates

Commercial invoice (c/i): This should be virtually the same as the pro-forma invoice
and should contain all the final and accurate details relating to a particular order. The
import licence number and the l/c number should all be stated on the commercial invoice.
Also the price and the delivery term should be consistent with the sales contract. The
commercial invoice need not be signed unless a signature is specifically called for in the
l/c.

Certificate of origin (c/o) if it is a required document

Packing declaration: The packing list indicates the number of packs involved, the
contents of each pack and the individual weights, dimensions and HS numbers. This list
enables the customer to check that the correct number of units has been received.
Customs authorities can also easily identify a specific pack they wish to inspect.

Specific South African Documentary Requirements

Examples of South documentation that may be required depending on the product being
imported include:

Import permits: Import permits are required for certain goods and commodities as
specified in Schedule 1 of the Import Control Regulations Act. Permits are obtainable
from the controlling authority, which includes:

• Department of Agriculture
• Department of Water Affairs
• Department of Sea Fisheries
• Department of Trade and Industry
• Department of Mineral and Energy Affairs
• Department of Health

Phytosanitary certificate: South Africa requires these certificates for imports of plant
and plant products e.g. seeds, bulbs, cut flowers, etc. The Ministry/Department of
Agriculture in the country of origin usually issues Phytosanitary certificates. A copy of
the import permit should be forwarded to the exporter as conditions regarding the
importation of plants are stipulated in the permit.

Veterinary health certificates: These are usually required for imports of live animals,
fresh, chilled and frozen meat and certain canned products, in order to control the spread
of animal diseases. A copy of the import permit specifying the conditions of importation
will be required in order to obtain the certificate. South Africa has many agreements with
many countries regarding the conditions under which food products must be traded, for
example, meat may only be imported from approved abattoirs in certain countries.

Fumigation certificate: This document is required as proof that the packing materials
e.g. wooden crates, wood, wool etc), second-hand clothing or certain commodities have
been fumigated or sterilised. Certificates are issued by specialists and contain details such
as purpose of treatment, articles concerned, temperature range used, chemicals and
concentration used etc.

It is important that shipments be packed in cases or crates that are free of insect or fungus
infestation. If these requirements have not been met the consignee may be required to
apply treatment to the wood at his own expense in a manner indicated by the authorities.

The South African regulations in this regard stipulate that No person shall introduce into
the Republic any hay, straw, flax combings, palm packing fibre, or brown coconut fibre,
used for the packing of merchandise unless (a) it is kept in bond at the port of entry for
four months from the date of shipment; or (b) it is accompanied by a certificate signed by
an official authorised by the government of the country of origin, stating that the hay or
straw:

(1) Has been kept in store free from contact with any animal likely to be affected with
foot and mouth disease, contagious bovine pleuropneumonia, sheep-pox or rinderpest
for a period of four months immediately prior to its use; or
(2) has been subjected to the action of live steam in a closed compartment at a
temperature of 185 degrees F for at least ten minutes; or has been placed loosely in a
closed compartment and
(3) sprayed with formaldehyde solution; or
(4) Subject to the action of heat in the presence of moisture.

Inspection certificate: Although South Africa does not require pre-shipment inspection
on imports, certain importers, particularly those in the food sector, will stipulate a clean
report of finding from a well-known inspection company when purchasing from a new
supplier. The requirement generally falls away once a relationship has been established.

Quality certificate: May be a required document in respect of imports of fruit,

vegetables and processed fruit and vegetable products. Inspection is carried out prior to
export.
South African Bureau of Standards: The South African Bureau of Standards maintains
certain compulsory standard specification on specific products or groups of products. For
example Under the Standards Act of 1993, compulsory standards are maintained and
inspection is compulsory for the importation of: -

• canned fish, canned fish products and canned marine

molluscs
• canned crustaceans
• canned meat products
• frozen fish, frozen marine molluscs and frozen fish and
frozen marine mollusc products
• frozen rock lobster products
• frozen shrimps (prawns), langoustines and crabs
• smoked snoek

All imports falling into these categories require inspection by the Port Health Officer at
the port of entry into South Africa. With specific regard to canned products, the SABS
prefers exporters to work through local agents. A potential exporter can provide the
SABS with samples of each product intended for export to South Africa, the SABS will
submit a written report on the suitability of the product.

There are numerous other documentary requirements depending on the product

concerned, and the importer and exporter should always conduct a thorough investigation
into the documentary requirements before shipping consignments.

Dangerous Goods Documentary Requirements

There are a number of special shipping instruction forms and transport documents that
are required in respect of dangerous goods. Special documentation is usually required for
all shipments of dangerous goods, regardless of the mode of transport used. Dangerous
goods documents are normally characterised by red chevrons framing them.

Customs Procedure for Imports

All goods declared for consumption must be landed and entered within 7 days after the
arrival of the importing ship or within such additional time as the Secretary for Customs
may allow. Failure to do so will result in them being conveyed to a custom warehouse. If
the goods are not properly entered and all duties and charges are not paid within 3 months
after the goods have been placed in a customs warehouse, they may be sold at public
auction.

Goods may be stored in bond, without payment of duties, in any bonded warehouse or in
an unbonded warehouse approved by the Secretary for Customs. State warehouses are
also available.
Irrespective of the mode of transport used when importing goods, the importer or his
freight forwarder is required to present the following documents to the customs
authorities:

Bill of entry: Goods may not be imported into South Africa unless a bill of entry is
submitted to and accepted by the customs authorities. An original of the form, a DA500
is required by Customs.

Customs Worksheet: This is a customs document which details rates of exchange and
conversion of rates of the foreign currency amounts into South African Rands.

Commercial invoice: The commercial invoice must be presented to customs with the bill
of entry as well as relevant transport documents to be stamped by customs. This enables
customs to check the validity of the value of a consignment of goods as stated in the
DA500.

Import permit (if necessary): This document is required for certain goods and
commodities only in terms of import control regulations. If an import permit is required,
the import permits number and the expiry date should appear on the DA500.

Special import certificates or permits: Apart from those goods requiring an import
permit, a number of products are subject to inspection and/or to the issue of special
permits by certain authorities prior to the goods being imported.

Transport documents: i.e. the Bill of Lading (sea), the air waybill (air), the freight
transit order (rail), and the road 'waybill'.

If all documentation is in order, the documents will be stamped by customs and excise
and, once the import duties, excise duties (if applicable), and VAT have been paid, the
goods will be cleared through customs.

Certificate of Origin (DA59): Certain strategic commodities and goods facing anti-
dumping charges require a certificate of origin. Goods claiming preferential treatment in
respect of tariffs also require proof of origin.

When goods are seafreighted, customs clearance is performed at the port of entry or in
the case of cargo destined for the inland province of Gauteng, at the Customs Depot in
Johannesburg.

When goods are being airfreighted, customs clearance is performed at:

• Johannesburg or Cape Town International Airport, if an

international airline is being used

• Lanseria Airport in the case of small consignments from, for

example Zambia, DRC, etc.
BLNS Countries: As the BLNS countries (Botswana, Lesotho, Namibia and Swaziland)
form part of the Southern African Customs Union, goods imported from the BLNS states
do not require a Bill of Entry and no customs duties are payable. VAT is payable at the
point of entry into South Africa on goods originating in BLNS states.

Customs procedure for samples

South Africa applies the ATA Carnet system for the entry of commercial samples,
advertising material and professional equipment. Note that while goods imported on a
temporary basis for subsequent re-export are exempt from import control, ATA carnets
cannot confer immunity from other conditions of temporary importation. Persons
importing under cover of a carnet should ensure that the goods are adequately marked for
identification purposes so as to facilitate their passage through customs.

The purpose of the ATA Carnet

'ATA' is an acronym of the French and English words 'Admission Temporaire/Temporary

Admission'. The ATA Carnet is an internationally recognised and accepted uniform
Customs document to allow for the temporary importation of goods, whether
accompanied or not, into a member country without the need to raise Customs bonds,
payments of duty and the fulfilment of other Customs formalities in one or a number of
foreign countries. ATA Carnets are issued by affiliates of the International Bureau of
Chambers of Commerce (IBCC) in Paris, France. The ATA Carnet system is used by 51
authorised Chambers of Commerce worldwide.

The ATA Carnet System

The ATA Carnet System was drawn up by the Brussels based Customs Cooperation
Council (CCC), now known as the World Customs Organisation (WCO), with the
assistance of the ICC's International Bureau of Chambers of Commerce (IBCC) and is
subject to International Conventions which govern the requirements for the temporary
duty-free admission of a reasonable number of goods from participating countries. These
international conventions are as follows:

• GATT Convention on Samples (1952)

• Fairs and Exhibitions Convention of the World Customs

Organisation (WCO)(1961)

• Professional Equipment Convention of the World Customs

Organisation (WCO)(1961)

The advantages of using the ATA Carnet system

The ATA Carnet system eliminates the need for a Customs declaration, as the ATA
Carnet system gives instant recognition and acceptability by foreign Customs Officials at
border points thus avoiding the necessity for a deposit or guarantee by the forwarder and
exporter to the foreign country of temporary importation. It permits commercial or
professional travellers to make Customs arrangements in advance locally, quickly and at
a predetermined cost.

It enables travellers the use of a single ATA Carnet for goods accompanied or
unaccompanied to visit an unlimited number of countries which will pass through several
Customs authorities during the course of one trip.

Users of the ATA Carnet document

Companies and individuals may apply for a Carnet.

• Travelling business/sales executives

• Technicians

• Fair exhibitors

• Professional individuals and teams: film crews, surgeons,

architects, artists, educationalists, entertainers and engineers.

Items covered by the ATA Carnet system

• Commercial samples and advertising film (16mm)

• Goods for international exhibition

• Professional equipment which includes: Articles for meetings for a

charitable purpose, or to promote any branch of learning: art, craft, sport,
religion, etc.; equipment for the press; also sound and television
broadcasting equipment, musical instruments, costumes, and other stage
properties, cinematographic equipment, professional equipment for testing
machinery etc.; equipment for use by surgeons, archaeologists, zoologists,
entertainers, lecturers, etc. and vehicles by professional
bodies/international racing - this excludes all private individuals, private
companies, agents for new or used vehicles.

Note: While the ATA carnets will be issued in the exporters home country, it is the
obligation of the holder of the ATA to comply with South Africa laws and regulations of
importation. Goods intended for processing or repair shall not be imported under cover of
ATA carnets.

Goods excluded from the ATA Carnet system

Perishable goods and items such as paint, cleaning materials, food, oils, leaflets and
brochures, which are considered "consumable items" and intended to be given away,
disposed of, or utilised abroad, are excluded from the system as they would not ordinarily
be re-exported.

Also excluded from the ATA Carnet system are the following:

• Goods intended for processing or repair;

• Items already sold or offered for sale. Such items are not
considered samples;

• Unmounted gems or gemstones;

• Theatrical make-up;

• Alcoholic beverages, tobacco, fuels and foodstuffs etc.;

• Postal traffic; and

• Livestock.

Conditions to be observed by the ATA Carnet holder

Goods imported under an ATA Carnet should not be sold. Such goods must be re-
exported by the ATA Carnet holder within the period approved for their temporary
admission by the foreign Customs. It is therefore, particularly important to obtain the
correct Customs verification of entry and exit from each country visited. Failure to do so
may well lead to Customs duty and penalty or tax being imposed.

Note: The use of the ATA Carnet does not absolve the holder from observing the
Customs regulations of the countries that participate in the ATA Carnet system. For
example, in certain circumstances an import license may also be required.

Validity period of ATA Carnets and liability of ATA Carnets holders

The ATA Carnet is a temporary importation document and the holder must comply with
the Customs regulations of the country into which the goods are being imported.
Exporters must take careful note of the authorised period of temporary importation
allowed by Customs upon entry, as this may differ. It is usually 12 months for
commercial samples, 6 months for exhibition goods and professional equipment, but
sometimes only a few hours or days for goods in transit through a country. If the
stipulated period for temporary admission is exceeded, duties and penalty charges will be
payable even though proof of eventual re-exportation is provided. Any such charges
incurred will be the liability of the ATA Carnet holder.
It is also important to bear in mind that if any goods covered by an ATA Carnet are
destroyed, lost or stolen whilst in a foreign country, they will automatically become liable
for Customs duty. This will be the liability of the ATA Carnet holder. In addition, the
Carnet holder will also be responsible to the Chamber for any costs that the Chamber
may incur in meeting its obligation as guarantor.

If the ATA Carnet itself is destroyed, lost or stolen, a similar situation could well arise. In
this event the ATA Carnet holder should immediately notify the local police and/or
customs of the mishap and obtain a covering statement from them. An application for a
new ATA Carnet is then required.

The guarantee period

The primary purpose of the ATA Carnet is to give an acceptable guarantee to the
Customs authorities of a foreign country into which the goods are temporarily imported,
that all duties and taxes will be paid to them if the conditions under which they allow
these goods into their country, are breached. The Chambers of Commerce participating in
the ATA Carnet system provide this guarantee to the Customs authorities. It follows,
therefore that the issuing Chamber must in turn receive equivalent security from the ATA
Carnet holder. The 31-month guarantee period is essential, as this is the period during
which the Chamber itself remains liable. There is of course no need for the security to be
given 'at risk', throughout this period. If an ATA Carnet is used for four weeks and is
returned to the Chamber without delay and found to be in order, a 'conditional discharge',
may be given at the Chambers discretion and the deposit/guarantee will be returned
within a shorter time.