www.bifa.org


Policy & Compliance


BIFAlink


The UK’s departure from the EU has legal implications for being a Customs agent, with similar but different legislation applying. BIFAlink examines some of the issues that BIFA Members should understand to minimise their risks


Customs agents will find themselves more exposed to risk following the end of the Transition period on 31 December 2020, if only due to the volume of additional customs entries to be completed, new regimes and the fact that some customers may not fully understand the legal implications of what they are doing, One of the best ways to mitigate that risk is to


ensure that BIFA Standard Trading Conditions (STC) are fully incorporated in all contracts and that Members fully understand the legal implications of being a ‘Customs agent’ and the rules of ‘Establishment’. Clause 7 of The BIFA STC currently states: “In


all and any dealings with HM Revenue & Customs (HMRC), for and on behalf of the customer and/or owner, the company (BIFA Member) is deemed to be appointed, and acts, as direct representative only.” However, this can only apply where the


customer is based within the UK. In certain cases where a delivered duty paid (DDP) shipment is being imported into the UK or an ex works (EXW) shipment is leaving the UK, the customer may be based outside of the UK (ie the overseas shipper or consignee respectively) and thus this clause is not likely to be applicable. There are four converging factors that increase


the likelihood that the forwarder will have to act as an indirect Customs agent more frequently than previously was the case: • Modern trade patterns • Commercial power of large traders • Incoterms • Changes in customs legislation.


Impact of the Taxation (Cross Border) Trade Act 2018 The Taxation (Cross Border) Trade Act 2018 (TCTA 2018) uses subtly different language from the Unions Customs Code that it replaces. The Term ‘Customs representative’ is now replaced by ‘the Customs agent’ although the concept remains largely the same. From our Members’ viewpoint, the most


important section of the Act is Section 21 Customs agents where it is stated: 21 (1) A person (‘the principal’) may appoint any other person (a ‘Customs agent’) to act on the principal’s behalf for the purposes of this part, and


January 2021


a)The agent may make Customs declarations in the name of the principal (and in that case the agent acts as a ‘direct agent’) or


b) The agent may make Customs declarations in the agent’s own name (and in this case the agent acts as an ‘indirect agent’).


Within this section of the Act there is


considerable emphasis on “the appointment of a person as a Customs agent”. At this point we have to emphasise the word ‘appointment’ from HMRC’s viewpoint would involve a positive action. For single one-off consignments, ticking a box to state that the customer has seen, read, understood and accepted BIFA terms including Clause 7 is likely to be acceptable. However, where a longer business relationship is envisaged, a separate form of empowerment/ authorisation should be carefully considered Section 21 (3) clearly states: “The effect of an


appointment of a person as a Customs agent is that anything done under, or otherwise for the purposes of, this part by, or in relation to, the agent is regarded as done under, or otherwise for the purposes of, this part by, or in relation to, the principal (and not by the agent). As a direct agent, the Customs agent is acting in the name of and behalf of ‘the principal’. Sections 21 (4) and (5) of the TCTA 2018 do


refer to the liabilities of the Customs agents as an indirect agent, highlighting that they are jointly and severally liable for the payment of import duty.


Direct v indirect Customs agent As we have seen, the TCTA 2018 allows the Customs agent to be appointed on either a direct or indirect basis. In reality, when acting for a party established outside the UK, the Customs agent will be appointed on an indirect basis, whilst it may be direct when appointed by a UK- based entity. BIFA has identified four main scenarios:


• Direct representation when appointed by a UK-based entity;


• Indirect representation when representing a UK-based entity;


• Indirect representation when acting for an entity established outside the UK;


• Self-representing if the forwarder is importing goods on its own behalf. It is essential that the Customs agent


13


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  |  Page 21  |  Page 22  |  Page 23  |  Page 24