Legal
associated with your organisation, as defined by the act, so that you have in place reasonable and proportionate fraud prevention procedures targeting the right relationships. Crucial to this is the “for or on behalf of” definition, and the nature of any agency relationship. Identify on whose behalf the various entities in the supply chain are in fact acting, consider whether a genuine agency relationship exists and, where it does, who they are an agent for. A customs agent discharges customs clearance duties owed by the customer from which a customer would likely benefit from any fraudulent misdeclaration. In circumstances where a freight forwarder acts as customs agent for the customer, it would be considered an associated person of the customer, and the customer would be the relevant body upon
whom the obligation to have reasonable procedures in place to prevent fraud by their customs agent would rest. Where the freight forwarder sub- contracts the customs clearance services, however, the entity to whom those services are subcontracted would be an associated person of the freight forwarder and the freight forwarder would be the relevant body with the same necessary fraud prevention obligations in respect of that relationship. The Birketts view – next steps Organisations that are potentially caught by this new offence should take the opportunity to consider their potential exposure under ECCTA and review, develop and enhance existing procedures to prevent fraud and promote responsible business practices.
About the author Daniel Irving is a regulatory barrister and legal director at Birketts and is the firm’s White Collar Investigations lead. Daniel advises and represents clients in relation to financial crime, fraud and regulatory investigations including HMRC and SFO investigations and prosecutions, FCA enforcement action, confiscation and forfeiture under the Proceeds of Crime Act 2002 (POCA), and international financial sanctions. daniel-irving@birketts.co.uk
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