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BIFAlink


Policy & Compliance


Inland pre-clearance and anti-fraud changes


Following considerable disquiet among those affected by the Bicester anti-fraud operation, HMRC has appointed a new logistics provider, Wincanton, as it aims to improve procedures


Background Many BIFA Members may have already heard about the HM Revenue & Customs (HMRC) anti- fraud operation, or as it is commonly referred to ‘the Bicester operation’. The operation, whose roots lie in tackling large-scale non-compliance, started in October 2017 when HMRC launched a pilot exercise to trial the use of an Inland Pre- Clearance Facility. Consignments were identified through CHIEF,


collected from the ports by an HMRC approved contractor and moved to an Inland Pre- Clearance facility for examination and potentially sampling. After the trial, the use of Inland Pre- Clearance (IPC) to tackle Customs and international trade threats became part of HMRC’s usual business activity and today hundreds of consignments have been examined.


Current issues However, the operation has been viewed as controversial by some from the very beginning. Many Members caught in disputes between the authorities and importers were left bearing the financial brunt of the operation. Demurrage bills were first sent to them and only then could Members pass them onto their customers. At the same time, importers unable to get hold of their goods allege that they were left on the brink of bankruptcy, which directly impacted freight forwarders. Many have grievances with the way the


operation has been conducted from the logistical perspective, with the majority of Members who contacted the Secretariat complaining about the lack of clarity of the process and lack of communication. The Secretariat has taken this matter straight


to HMRC on many occasions and explained the frustration that this is causing, but we understand there is still a significant backlog of consignments awaiting inspection although there are glimmers of improvement in sight.


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www.bifa.org


Troubleshooting Although Members are the not direct targets of the operation they are usually the first port of call for their clients who are anxious to get hold of their goods. As usual, the advice is to co-operate with authorities and not to withhold the required information. However, if a consignment has been detained but the inspection is not carried out or does not bring out any results, Members’ clients are advised to go through the complaint procedure. If Members’ clients have incurred demurrage or related charges, they should present them to the authorities together with their claim for consideration, in line with the complaints procedures as detailed in the links at the conclusion of this article. If in addition to that they can prove they have lost business due to the detention, they are encouraged to present evidence of that as well. The authorities will apply a forensic approach


to all complaints but the BIFA secretariat was assured that all cases will be examined on their merit. Importers should, however, be aware that if the


inspection reveals any non-compliance, their chances of recovering any of the above mentioned costs would be greatly diminished.


Remedial process HMRC have selected a new logistics provider, awarding Wincanton a five-year contract, which BIFA sees as a positive move. A new purpose-built inspection site for sea-


freight containers has now been established in Milton Keynes and will be the only one after the move from Bicester is complete. Airfreight will in turn be inspected in a purpose-built facility in Hayes, Middlesex. The selection process will be a risk-based


triage system during which HMRC will first evaluate the risk related to the consignment looking at the declaration particulars and the trader’s compliance. This initial inspection is supposed to take no longer than a few days. Should the full container be selected for


physical examination then the envisaged processing times are expected to not exceed five weeks, although it is worth pointing out that it is currently longer than this. BIFA asked HMRC whether it would commit to


a Service Level Agreement (SLA) and was informed that an SLA may be introduced in due course. This could, however, only be an average because each consignment presents a unique set of circumstances.


Word of caution Although the operation is aimed primarily at fraudulent traders in goods (importers, distributors and the like) it is very important for Members offering customs brokerage or shipping services to importers to understand that they may be targeted by fraudsters simply to carry their goods into the UK. Since Members may also be asked to make the


customs declaration and pay charges on their behalf, it is in the Members’ interests to apply due diligence in order to protect themselves from potential fraudsters and to avoid the risk of becoming jointly and severally liable for any debt accruing from a false declaration. Members should also be aware that under


UCC Article189 (2), HMRC is obliged to notify the declarant where goods are to be verified and, in addition, it is the declarant who is to be notified where goods are subsequently released after verification (Article 246 IA). As a consequence of that, HMRC will in general only communicate with the declarant and may not communicate with the direct representative unless written authority is provided.


Links: www.gov.uk/government/organisations/hm- revenue-customs/contact/complain-about-hmrc www.gov.uk/complain-about-hmrc complaints.clearingteam@hmrc.gsi.gov.uk


April 2019


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