BIFAlink


Policy & Compliance


www.bifa.org


Reducing the post-Brexit financial burden on customs agents


Members should be aware that there are ways to reduce the potential financial burden associated with additional declarations or more extensive use of Common Transit


Over the past three years there has been a lot of speculation about the impact of EU-Exit on trade and its potential financial implications. Due to the lack of any historical data, it is difficult to predict future trade patterns and behaviours but it is widely accepted that more customs declarations and more common transit movements will be required in order to move cargo across the borders. Both will inadvertently lead to a potential increase in Members’ financial liability related mainly to guarantee reference amount requirements if they or their customers trade with European partners on a regular basis. Consequently, many traders have found


themselves in need of review of their daily operations. In June’s edition of BIFAlink we reminded Members about potential advantages of using the Common Transit procedure. Not long ago the Secretariat prepared a guide for traders thinking about becoming Authorised Economic Operators (AEO). While the guide and the article focus mainly on


the practicalities of the application or the process itself, it is important to remember the financial impact of potential preparations/authorisations.


Waivers and reductions AEO-C, in particular, is the one authorisation most commonly associated with potential financial benefits – and rightly so as it offers a number of benefits including a faster application process for customs simplifications and authorisations, but also reductions and waivers of guarantees. Non-AEOs should, however, be aware that


when applying for a comprehensive guarantee they may still be eligible for reductions or even waivers of guarantee level for potential debt (potential debt is usually related to temporary


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storage, transit or special procedures such IP or end-use). In case of non-AEOs, the potential debt


guarantee requirement could be reduced to 50% or 30% of the required reference amount. The reduction will in general be linked to financial solvency, compliance with customs rules, control of operations and practical standards of competency. AEO-Cs can, in turn, expect a full waiver of


guarantees related to potential debt. Additionally, AEO-Cs can also expect up to a 70% reduction on the duty element of their application for deferment account (actual debt). This is purely an AEO-linked benefit and is not available to non- authorised traders.


SIVA Members operating a duty deferment account should look at reducing the guarantee element relative to import VAT by applying for Simplified Import VAT Accounting (SIVA) approval. There are a number of criteria that need to be


met in order to apply for the authorisation, such as a good history of VAT compliance, good record keeping or high level of control. These are not dissimilar to AEO requirements, so AEOs will again be in a privileged position. However, it is


not limited to AEO authorised traders and on its own can significantly reduce the financial liability linked to operating a deferment account.


Conclusion While there is still no clarity as to what Brexit really means for freight forwarders, Members should be aware that there are ways to reduce the potential financial burden associated with additional declarations or more extensive use of Common Transit. By applying for waivers or reductions and SIVA, it is possible to cut the guarantee reference figure to a fraction of what the full amount would be. AEOs will certainly be the winners here, but all


compliant traders can benefit from a number of easements already available to them. For further information, Members should visit


the following websites: • www.gov.uk/government/publications/notice- siva-1-simplified-import-vat-accounting/notice-si va-1-simplified-import-vat-accounting • www.gov.uk/guidance/import-and-export- customs-comprehensive-guarantees-ccgs#ccg- waivers-and-reductions • www.gov.uk/government/publications/import- and-export-apply-for-a-customs-comprehensive -guarantee-ccg1


September 2019


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