Customs Compliance: The Defined Use of Temporary Imports

Does your company regularly move products across borders for events or demonstrations? Shipping goods internationally typically follows a standard set of procedures for goods entering a country with applicable duties and tariffs required. But what if you do not plan to sell the products or even keep them in a country for an extended period? The announcements for additional tariffs may have you rethinking a project, meeting, or event across the border.

However, you may need to rethink the classification of the equipment or materials you must bring. In this article, we will look at the key characteristics of temporary imports, how, when appropriately applied, these imports are not subject to tariffs, and how customs procedures are different for temporary imports. Understanding the rules and regulations for temporary imports ensures compliance and may help you avoid unnecessary costs.

What are Temporary Imports?

Temporary imports refer to goods brought into a country for a specific purpose, such as an event or exhibition or for repair and testing. They are prohibited from entering the local market and must be re-exported after the defined purpose or within a specific timeframe. When applied correctly, however, temporary imports can cross borders without incurring import duties or taxes.

Key Characteristics

1. Purpose – Temporary imports are often products and materials used for trade shows, exhibitions, or demonstrations. It may also include tools and machinery imported for repairs, testing, or maintenance. Other examples of temporary imports include medical equipment needed by health professionals, vehicles and motorcycles used for testing, racing events, or promotional events, artwork or cultural artifacts displayed in an exhibit, sports gear and equipment for an event, production equipment for filming, or construction equipment needed for a project.
2. Duration – Temporary imports are typically subject to a specified time frame for how long the goods can remain in the country. The timeframe may vary depending on local laws and the nature of the import. Most durations are six months or less, with some extensions to a year or more based on the specified purpose.
3. Customs Procedures – Temporary imports usually require special customs documentation, such as a temporary import bond or carnet, which ensures that the importer will export the goods again within the stipulated period. The clearance process may involve additional steps to verify the intended purpose of the goods.
4. No Duties – Generally, these imports are exempt from regular import duties, although some countries may impose certain conditions or fees.

Temporary imports facilitate international trade and commerce by allowing businesses to showcase their products or conduct necessary activities without the burden of permanent import costs.

How do Temporary Imports Avoid Tariffs?

Temporary imports utilize several measures to avoid tariffs, typically through specific customs procedures designed for goods with a limited duration in a country. Here are the main ways:

1. Bonded Warehousing – Under customs control, companies can store goods in a secure, bonded warehouse. Goods in these warehouses are not subject to duties and taxes until exported or released into the domestic market for consumption. Since temporary imports are often exempt from duties if exported within a specific timeframe, storing them in a bonded warehouse gives companies more flexibility.
2. Temporary Importation under Bond (TIB) – This specific customs procedure allows goods to be imported temporarily without paying tariffs, provided the importer posts a bond to cover the potential duties if the goods are not re-exported as required. Companies frequently use TIB regulations for goods, such as exhibition materials, professional equipment, and tools.
3. Carnets – An ATA Carnet is an international customs document that allows the holder to bring goods into a foreign country for a specified period (usually up to a year) without paying duties and import taxes. Businesses often use carnets for trade shows, exhibitions, or professional equipment that applies to the more than 80 countries in the ATA Carnet system. The ATA Carnet replaces the need for individual customs documentation and bonds for each trip, making it more streamlined for frequent travelers or businesses.
4. Exemptions for Specified Goods – Some countries have specific exemptions for certain temporary imports, such as machinery for repair or tools for construction projects. These exemptions can vary by country and are usually outlined in trade agreements.
5. Re-exportation – The key principle behind these temporary import mechanisms is that the goods must be re-exported within a specified time frame. If they are not, customs duties and taxes may be applied retroactively.

These procedures aim to support international trade and temporary business activities without incurring additional costs while ensuring that the goods do not permanently enter the domestic market without paying the appropriate tariffs.

How do Customs Procedures Differ from Temporary Imports?

1. Documentation Requirements – Different countries may require various forms of documentation for temporary imports. Some may demand specific import permits, while others might accept general declarations. The documentation can include invoices, certificates, and proof of intended re-exportation.
2. Time Limits – The duration for which goods can remain temporarily imported without incurring tariffs varies by country. Some countries may allow a period of up to six months, while others might extend this to a year or more. Extensions may also be possible in some jurisdictions.
3. Types of Goods – Certain countries may restrict what goods qualify as temporary imports. For example, some may allow professional equipment but prohibit consumer products. Conversely, others might have a more inclusive list of products allowed.

Overall, temporary imports are goods imported for a specific purpose and limited durations with a plan to be re-exported within a designated timeframe. Goods intended for long-term use, sale, or consumption within the domestic market do not qualify as there is no intention to re-export these goods. Any goods shipped under the regulations of Temporary Imports that are not re-exported within the allowed time will be required to pay the proper duties, taxes, and fees.

TOC Logistics offers comprehensive international shipping logistics and customs brokerage services. Contact our team if you have any questions regarding your shipping needs or customs requirements.