Who should oversee the submission of customs declaration? Who archives and keeps the documents for the required amount of time? And what about verifying that the information is accurate?
These are questions we often get asked in our meetings with companies dealing with imports (or exports for that matter). Some are taken by surprise by our answers, as a common misinterpretation is that customs brokers or freight forwarders bear the responsibility for most aspects of the customs declaration process.
Our answer is:
Although the freight forwarder or customs broker processes the customs declarations, it is always the importer/exporter of record’s responsibility to ensure an accurate and timely submission of the declaration.
As an example, if no declaration has been made, you, the trader, hold the responsibility in the eyes of the authorities, not your freight forwarder or customs broker. The same goes for declarations containing incorrect information. Even if the error is made by a broker or carrier, you are in the end responsible for validating that the declaration contains the correct information. Would you pay your supplier if the invoice was incorrect?
A trader’s responsibilities for the customs declaration process
To elaborate, let’s break down your responsibilities in three stages:
Submitting customs declarations
As the trader, you need to ensure that the declaration is submitted on time and with accurate information (and correcting inaccurate information uncovered in the internal auditing stage).
Whether this is carried out internally or by a customs broker, you need to document your customs process. If you make use of an external broker or agent, we recommend you craft out and issue broker’s instructions.
Internal auditing of customs declarations
Traders are equally responsible for making sure that a declaration has in fact been made, and that the information stated in the declaration is correct.
Common errors to check for includes:
- Custom classification (importer is responsible for using correct HS codes in their country)
- Determination of country of origin. Where have the goods actually been produced?
- Calculation of the customs value. Know the different approved methods for calculating the true and correct value.
Keeping customs declarations
With the keeping and storing of customs declarations, the responsibility is ultimately yours as well.
- Storing the declarations for the required time-period
- In a satisfactory record-keeping system
You should also keep in mind that in the event of an audit, you should be able to easily access and export files promptly.
Read HMRC’s guidance on archiving trade documents
What are the consequences of customs compliance breaches?
By contravening a duty, obligation, requirement, or condition included in or imposed by EU or national customs legislation, or by rules set down in international agreements (such as those dealing with tariff preferences), you can be subjected to customs civil penalties.
Non-compliance may cause penalties and other consequences, in form of fines and amending or revoking authorisations
How much is the fine?
This of course differs from country to country and depends on the severity of the breach and other circumstances.
If we look to the UK, HMRC fines start at £250 and can go up to £2500 per contravention. Based on the severity of the error and the amount of undeclared Customs Duty or import VAT, the fine will be determined.
HMRC’s penalty system is specifically designed to encourage accurate declarations and compliance with the law
To learn more, check out this page where HMRC gives a detailed breakdown of their civil penalties for contraventions of the customs law
How can Emma E-Doc assist?
Emma E-Doc, our digital customs archive and compliance software, eases and streamlines the gathering, storing and internal audit of customs documents.
Using Emma E-Doc enables you to:
- Automate the gathering and storing of customs declarations, supporting documents and data – brokers and forwarders send customs data directly to the platform
- Detect and request missing declarations from brokers – from within the platform
- Meets authorities’ requirements for record-keeping-systems and stores documents and data for the required number of years (according to your country’s requirements)
For a full overview of features, visit our Emma E-Doc product page
In the case of an external audit, Emma E-Doc is also proving to be a useful tool.
Emma E-Doc customs audit benefits include:
- Fast and easy access to all your customs declarations and documents for all the required years
- No need to waste time waiting for copies of Export C88’s/SAD/Entries from your broker, as they should already be obtained and checked over the years leading up to the audit
- The option to export and share files and reports as requested by the authorities
E-book: Would you benefit from a digital customs archive?
In this e-book, we have identified several questions that are useful to raise when reviewing your customs data process and the need for a digital customs archive.