Carnet bond – Huge difference between AA´s??

[pecha72]

Ok, long story short: I made a trip from Europe to Oz via India +7 years ago, right now I´m not going, but just trying to help out a friend, who plans to leave in August (he´s with a group of four riders total), and we seem to have hit an unexpected wall... The Finnish AA no longer issues carnets, we have to go to the Swedish AA (I asked ADAC already, and the answer was the same -> go to Sweden).

For their routing (which currently goes Turkey-Iran-Pakistan-India-Burma-Thailand-Cambodia), the Swedish AA told me this:

“The deposit for Pakistan is 300% of the value of the vehicle, for Iran, India and Burma 125% of the value.
So there is a huge difference with or without Pakistan.
“

And then I specifically then asked them, does this mean, that if my vehicle is valued at 20.000 Euros, then I would have to post a bond of 60.000 Euros. The answer was YES. That is outrageous money. Could not swallow that, so did a bit of googling, and in no time, I stumbled upon this, from RAC in the UK (their example is not from Asia, but the country in question does have a 250% “security risk rate”):

“Country specific payment (50% refundable on discharge of your Carnet as detailed above): Vehicle value x Security Risk Rate x 10.6%”

“For example, a vehicle valued at £3,000 travelling to South Africa will be: £3,000 x 250% = £7,500 (You pay 10.6% of this amount = £795“

Link:
http://www.rac.co.uk/pdfs/driving-ab...et-prices.aspx


The whole procedure seems a bit different with RAC, as it seems like they will not return the entire carnet bond, only 50% of it. But still, the numbers are suddenly FAR more tolerable. I have not asked RAC yet, but their answer will probably be the same as the one ADAC gave me.

It blows my mind, that within the EU, one AA demands, that you leave a bond based on the ENTIRE percentage of the highest valued carnet country, in this case it would be three times the value of the vehicle.

But another AA will calculate this amount, and THEN multiply it by 0,106 (10.6%), so the outcome is totally different. The group probably will not go with bikes, that are worth 20.000 Euro, not even half of that, but still – this is simply not making any sense to me!

And as if I´m not baffled enough by this already................
Almost 8 years ago, the Finnish AA issued me a carnet de passages, that was valid, and I used it, in Iran, Pakistan and India, for example. My bike was valued at 9000 Euros back then, and the bond, that I had to put on a bank account, which only the Finnish AA had access to, was 5000 euros. I thought it was a lot. But now I think it could have been a bargain! On the list of multiple things, that I probably do not “get” here, is the fact, that my carnet bond was only a bit more than 50% of the vehicle´s value. I doubt those country percentages were that low back then, in fact I am quite certain, that they were not.

Could someone please explain, why the difference could be so huge, are the Swedes mistaken here (I do hope so!), or what are the things, that I am not getting here..? Thank you kindly for any and all answers in advance! Pekka

[Mark hadley]

Your post discusses two matters:
1) The bond that has to be placed
2) The non-refundable cost of the carnet

I'm not sure which is most important to you.

I had read sometime back that there was flexibility on the base value. I have a 20 year old truck and would hope that inflation and old age would have reduced the book value enormously.

[m37charlie]

There are 2 distinct ways to do carnets:
1) deposit the value of vehicle times the duty percentage (sometimes 300% or even more; 100% in the case of Australia for instance) with the carnet association; BUT YOU GET IT ALL BACK
2) Buy an "insurance" to cover the risk of leaving the vehicle in the country; usually much less than the value of the vehicle; BUT YOU DO NOT GET IT BACK.
In my case going to Australia for almost 2 years I chose to deposit $C120,000 with the Canadian AA and get back upon my return rather than pay say $20,000 and lose it.
With a low value vehicle one's calculations could be reversed.

Charlie

[pecha72]

Originally Posted by Mark hadley

Your post discusses two matters:
1) The bond that has to be placed
2) The non-refundable cost of the carnet

I'm not sure which is most important to you.

That would be 1), and more specifically, having to place a bond, that equals 300% of the vehicle´s value (according to the Swedish AA).

Mind you, that I have personally taken my motorcycle to Pakistan, for which I had the carnet from the Finnish AA, and in that case, the bond was only about 55% of the vehicle´s value. I have no idea, why, but now having to place a bond, that is about 5,5 times higher than that, does sound a bit strange, even though it is no longer the Finnish AA, that we are dealing with.

[pecha72]

Originally Posted by m37charlie

There are 2 distinct ways to do carnets:
1) deposit the value of vehicle times the duty percentage (sometimes 300% or even more; 100% in the case of Australia for instance) with the carnet association; BUT YOU GET IT ALL BACK
2) Buy an "insurance" to cover the risk of leaving the vehicle in the country; usually much less than the value of the vehicle; BUT YOU DO NOT GET IT BACK.

Thanks.

In fact that option 2) has never been mentioned by the Finnish, or Swedish AA, so if they have such an option, at least they seem very quiet about it.

I guess what that RAC link refers to, is actually that insurance option, although once again, it does not seem to be mentioned, what option it is, on top there was only "How do you calculate the cost of your RAC carnet".

[Mark hadley]

Originally Posted by pecha72

Thanks.

...I guess what that RAC link refers to, is actually that insurance option, .....

yes it read a bit like that. Or are they just being an international guarantor that you had the means to payout if required. Having to pay out at the border seems astonishingly rare (have your heard of any?) So I'd only be concerned with the fee being charged.

[pecha72]

Originally Posted by Mark hadley

yes it read a bit like that. Or are they just being an international guarantor that you had the means to payout if required. Having to pay out at the border seems astonishingly rare (have your heard of any?) So I’d only be concerned with the fee being charged.

Sorry, I´m not a native English speaker, and this may be the reason why I´m not sure, if I fully understood that part on your post, that I changed to bold? No, I have not ever had to “pay out” at any border – if leaving a money deposit at the borders is what you mean by this?

Issuing fee for the carnet does not seem to be the problem in our case, but the size of the bond does seem to be.

[m37charlie]

The RAC method is option 2 - value of vehicle, times max possible duty, times 10.6%; you lose HALF at the end. With my truck that could be $19000 for Pakistan or $51000 for Egypt, assuming it is valued at $120K...
The Swedish AA method is option 1 - put up lots of money (value times max duty) but get it all back.
I actually made a small amount of money on appreciation of the Canadian $ relative to USD 2010-12.
I'll have to get Unicat to "revalue" my rig before going to South Asia or Egypt or elsewhere in Africa (not too likely with the current "situation"). Thank goodness Northern Asia/China and S. America don't require carnets.

Don't feel too sorry for yourself. Right now no-one is issuing carnets for North Americans, the CAA has pulled out of the business and is trying to get someone in Europe to pick the business up for North Americans. Hopefully it will be someone that offers both options. The whole carnet situation is actually quite ridiculous.

Charlie

[pecha72]

Originally Posted by m37charlie

The whole carnet situation is actually quite ridiculous.

Couldn´t agree more! One AA does this, the other does that, and you are stuck to whoever is your "named" carnet issuer. And we´re in the EU!!!

And now I just heard, that the Swedes are actually about to do the same as Finns did a few years back, quit issuing carnets altogether, and so it may soon be transferred to the Germans or something... this really is a crazy mess.

[Grant Johnson]

A couple of tidbits:

The TWO methods of issuing/paying for carnets has been around for a long time. WHICH method your issuing authority uses is up to them, some use both. The CAA (Canada) used the deposit method for many years, then a few years ago added the insurance option, so you could choose either.

The word from the CAA is that the plan is for a new central issuing authority for the world, based in Europe. That is expected this fall. So hold on for news!

In the meantime, yes it's ugly and potentially expensive, but there is little choice. You can try the RAC in the UK, also ADAC, or RAC Western Australia!

be sure to read the Carnet page here:
Paperwork | Horizons Unlimited

[pecha72]

Originally Posted by Grant Johnson

the plan is for a new central issuing authority for the world, based in Europe. That is expected this fall.

Yep, the Swedish AA told me, that there were gonna be changes to this "in September", but did not tell anything about what these changes would be. Finnish AA said, that ADAC could be the place, where Scandinavians would be forwarded to.

So this looks like it´s getting more and more interesting every day..

[pecha72]

so, anybody have ANY info about how this will be, and when it will change?? the situation right now seems kinda ridiculous, as this group has 2,5 months until departure, and their entire routing might depend on this (=go via China, no carnet needed, or via India, where they'll need it).

[Tony LEE]

Another twist to the current situation is that some issuers will allow a carnet to be reissued/extended once you are on the road, while others will only issue a totally new carnet with delays in getting the old one refunded.

What would be good is if all countries adopted the Mexican model of a refundable surety , or even better, the one used in South America where there are almost no fees at all.

[pecha72]

just talked to a tour operator who did Trans-Africa with bikes in 2010 or -11, and he said they left a bond of 4000€ per bike, the average value of their bikes was probably closer to 10.000€ here. He dealt with the exact same Swedish AA, that we're now trying to deal with, who want 300%!!
(AND their carnets included Egypt).

This is just..... bizarre.

[Tony LEE]

I could believe that an established tour operator with a good history would be able to swing a very special deal for the whole party on the basis that having an experienced tour leader would make it MUCH less likely one individual member would either abandon the bike, or have issues getting the carnet signed off on each exit.
Insurers deal with perceived risk and a tour vs an individual would seem to be much less of a risk.