search.noResults

search.searching

note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
BIFAlink


Legal Eagle


How Customs compliance can prevent a tale of woe


Incorporating the BIFA STC into your contracts, however fast-moving your business, can protect your company from disastrous unforeseen complications


There has been greater importance placed on Customs compliance in recent years, with a particular emphasis on the criteria associated with becoming an Authorised Economic Operator. Another example of this new approach is the government intention to impose stricter criteria on the operators of fulfilment houses and onward supply relief users. On 1 December, HM Revenue & Customs (HMRC) issued CIP 27 (2017) entitled ‘Due diligence when making customs declarations’, one of the most important CIPs in the last few years. In recent years we have seen a loss of


expertise in both the forwarding community and its customers. In particular, the lack of understanding of the various parties’ legal obligations and how they interconnect is causing concern. The problems are compounded by the complexity of customs legislation and difficulty in finding clear and concise guidance online, and the non-availability of suitably experienced customs officers to discuss the matter with on the telephone.


VAT query For instance, we had one Member telephone us recently who had cleared a consignment as a direct representative on behalf of a first-time importer, who then queried the need to pay Duty/VAT. We directed the Member to Public Notice 199 and the link to debt liability – www.gov.uk/guidance/customs-debt-liability – which resolved the matter. Luckily we were able to assist this Member. In


some much more serious cases we have not been able to do so. The following example highlights that a problem in one area can have an impact elsewhere and lead to serious repercussions. One Member contacted us regarding a tariff


14


www.bifa.org


classification issue. In good faith, because the importer had been unwilling or unable to classify the goods, the agent used its knowledge to classify the goods incurring a 3% duty rate. The importer had omitted to advise the customs agent that the goods were waterproof, which led to a change in tariff heading and the duty rate increased by 6% to 9%. The error had been identified by HMRC, who also noted that several identical shipments had been previously imported for the same importer by the same Member, all at the incorrect duty rate. HMRC issued a demand for unpaid duties and taxes against the importer for several tens of thousands of pounds. Unfortunately the situation deteriorated even


further for the Member, who had failed to consider the issue of customs representation and was thus not able to claim the protection offered by being a direct representative. To make matters worse, it had not incorporated the BIFA STCs with its customer and was not able to rely on Clause 7, which would have made it the importer’s direct representative relative to customs matters. Also, the importer had not provided the “warranty” included within Clause 17, further weakening the Member’s position. At BIFA we understand that things are fast


moving, but the law makes no such allowances. We will be issuing more comprehensive guidance


on incorporating the STC in 2018, but in general terms they must be brought to the client’s attention, accepted, and this evidence retained. The main problems seem to stem from one-off


shipments, where normal credit and referencing checks are not completed and everything is done by e-mail. We have seen several methods of satisfactorily incorporating the STC in these circumstances, including one member who makes clients scroll through a set of the STC and tick a box which states that the party doing so has read, understood and accepted them. This generates a computer-generated message from the BIFA Member to the client confirming that all business is contracted under BIFA terms.


Copy of terms Another approach involves Members sending a standard e-mail stating that all business is contracted under BIFA STC with a link to, or a copy of, the terms attached. The client has to acknowledge receipt and acceptance of the terms before the Member proceeds with the shipment. Simply relying on having the BIFA logo included on all paperwork, your website, e-mails, etc, is not sufficient evidence of incorporation. Regarding the customs specific issues


included in this example, these are common problems stemming from importers’ lack of knowledge and forwarders being over helpful.


February 2018


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20