BIFAlink


Policy & Compliance


www.bifa.org


Liabilities when acting as Customs agent for a non-UK based entity In this scenario the freight forwarder, when acting as a Customs agent, must remember: • That when acting as a Customs agent for a party based outside the UK, Customs are most likely to pursue the Customs agent because there is no other UK-based party to take action against.


• The Customs agent should ensure that it has contractual arrangements in place to protect it from any non-compliance by its customer.


Particular attention is drawn to Clause 20 (A) of the BIFA


STC under which Members are indemnified by their customers for “all duties, taxes, imposts, levies and outlays of whatsoever nature levied by any authority in relation to the good(s) arising out of the company (BIFA Member) acting in accordance with the customer’s instruction...” This clause does provide some protection from the potential pitfalls that a Member may find itself in when handling consignments for a non-UK established entity. However, as these terms are contractual, the Member may still have to take legal action against its customer in order to enforce their contractual rights. It is important not to under-estimate the Customs agent’s


understands the fundamental difference between being a direct and indirect Customs agent and how this impacts on its responsibilities and liabilities. • Direct Customs agent – in this scenario the Customs agent acts in the name of and on behalf of another party. The party being represented is the declarant and is obliged to meet all the obligations arising from the declaration. The declarant will be responsible for maintaining the Customs records and also providing an audit trail. At this point it is important to dispel one myth that has


developed: that a Customs agent has no responsibility should it make an error. If the represented party has given clear and accurate instructions and the Customs agent makes an error, the latter will not be able to rely on the protection of being a direct agent. Clause 21 (6) (d) clearly states (if) a liability to import duty is incurred by reference to the importation of goods declared for a Customs declaration and the declaration was not made in accordance with regulations “that the agent is also liable for the import duty”. The view of HMRC is that it has failed to act in a competent manner and has become jointly and severally liable for the debt.


• Indirect Customs agent – in this case the Customs agent acts on behalf of another person but acts in its own name. It is incumbent on the indirect Customs agent to maintain a full audit trail with regard to the Customs declaration. In this case the agent is jointly and severally liable for all customs liabilities arising from the customs-related transactions.


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liability relative to non-compliance and the determination of HMRC to pursue outstanding liabilities. The most common problems reported to BIFA involve: • Misdeclaration of the goods • Under-declaration of value • Issues relative to origin rules • Other valuation issues • Anti-dumping duty infringements.


Any one of these problems, when discovered post-


clearance, is likely to lead to the Customs agent incurring considerable additional administrative costs and debt, which will have to be paid and subsequently recovered by it.


Appointing a direct Customs agent It has always been the case that the Customs agent has had to be appointed to act on a trader’s behalf. The law is explicit, Section 21 of the of TCTA 2018 specifically refers to “the appointment of a person as a Customs agent.” Having discussed this point with HMRC, it is clear that the


department is looking for the trader to have given a positive ‘appointment’ to the Customs agent to act on its behalf and to specify whether it would be on a direct or indirect basis. When pressed, it was evident that the engagement should be in writing and this would include e-mails, traceable electronic messages and a formal signature on a document. However, HMRC places considerable importance on the fact that the signatory is duly authorised by the company on whose behalf it is signing and still prefers “original” over electronic signatures. This appointment can be open-ended covering multiple


shipments over an unspecified timeframe, or can be limited to a single shipment.


Continued page 16 January 2021


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