HMRC Getting Tough with Customs Clearance Agents (and ignorance is no excuse)

It has become noticeable over the past six months or so that the number of enquiries received from freight forwarders and Customs clearance agents (as opposed to exporters and importers) is on the increase. Is this a Brexit factor? Or is it the new Union Customs Code (UCC) simply kicking in?

Whatever the reason, agents need to ensure that they remain up to speed with the latest Customs regulations. Because failure to comply is likely to expose organisations involved in Customs clearance to Civil Penalties. And being blissfully unaware of the new rules and changes in legislation will not be accepted by HMRC.

Of all the participants in the international logistics chain, Customs clearance agents should be the ones absolutely on top of their game. And yet we often see errors such as Customs Procedure Codes (Box 37) being incorrectly used; Document Codes (Box 44) not being declared; Licences (Box 44) being ignored. With the result that agents are incurring Civil Penalties, irrespective of representation.

Now some agents may think that, because they are acting in a direct capacity, they are not responsible for the information in the Customs declaration. Wrong! Carelessness and negligence with Customs entries can lead to the agent incurring fines, irrespective of the representation status. Worse still, agents who state in export and import Customs entries (Box 14) that they are acting in a direct capacity, but do not hold the necessary written evidence, will not only be deemed to be acting in an indirect capacity (jointly liable for the Customs debt), but could  also be subject to HMRC Civil Penalty!

Just as a reminder, here is what HMRC says about Representation in the UK Tariff:

“Direct representation

Where an agent is acting as a ‘direct’ representative, in the name and on behalf of another person - the ‘declarant’, the agent must hold (and be able to produce on customs request), written authority of their powers to act as the declarant’s representative. Failure to produce written authority will result in liability resting with the agent.

Where an agent delegates the making of a declaration to a sub- agent and the sub-agent makes the declaration in a ‘direct’ capacity, in the name and on behalf of the first agent, the sub- agent must hold (and be able to produce on request to customs) written authority of their power to act. Failure to produce written authority will result in liability resting with the sub-agent.

Indirect representation

Where the declarant is acting as an ‘indirect’ representative in their own name, but on behalf of another person, both parties accept joint liability for all information provided.

Where an agent delegates the making of a declaration to a sub- agent in an indirect capacity on behalf of the first agent, then the sub-agent becomes the customs debtor. The original agent ceases to be a customs debtor because they neither make the declaration nor have responsibility for performing the acts and formalities laid down by customs rules.”

Article written by Bernard O’Connor – Strong & Herd LLP April 2017

 

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