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noted that they sometimes choose whether or not to take on a client depending on their commercial attractiveness. Generally, stakeholders described using intermediaries for a wide range of services. A small number of respondents expressed their wish to be able to do some Customs processes, such as import declarations, in-house. Most respondents stated that there was a large variation in price between different intermediaries, and many acknowledged that the cost is generally higher for infrequent traders using intermediaries. Roughly two-thirds of respondents said that the cost of using an intermediary is proportionate to the services offered. Intermediaries reported a wide range of key factors that drive their pricing including market competition, the volume of declarations per client, the cost of software, staff training and wages, the complexity of and time needed to complete declarations, and related to that, the quality of data provided by the customer. Quality The majority of traders, in response to HMRC questions, reported receiving a satisfactory service overall, even if most had also seen or experienced a poor service to some extent or at some point. The accounts of poor quality were not restricted to a particular type of intermediary, although some stakeholders said that the service received from Customs agents was good or better than other types of intermediaries. Of the stakeholders that reported that their intermediary had submitted incorrect or incomplete declarations on their behalf, in most instances this did not have a detrimental impact on the movement taking place, although there were financial and subsequent compliance issues to consider. Future of the Customs intermediary sector Stakeholders reported that automation, for instance of processes such as data collection, would provide the most significant scope for innovation in the sector, but they also identified a range of barriers to innovation. The most frequently mentioned was the perception of some stakeholders that government systems are complicated, and it is difficult to access relevant Customs information. Some respondents also felt that Customs infrastructure and technology is often outdated, and a number felt that the uncertainty and instability around Customs processes had resulted in a lack of knowledge in the sector. There was also concern over whether intermediaries would be able to train staff in time
for the transition to CDS. There were a range of suggestions from stakeholders on how to aid innovation in the intermediary sector. These included the improvement or simplification of government Customs systems and infrastructure, and addressing non-compliant intermediaries. A small minority of respondents mentioned that they would benefit from an option to submit import declarations themselves. Some replies to the CfE suggested introducing regulation in the sector in the form of licensing or standards, including on a voluntary basis, to improve the education and quality of the sector. Examples were drawn from various countries that regulate their intermediary market in these ways, including the USA, the Netherlands, Singapore, Greece, Spain, Australia and Canada. On the other hand, some respondents believed that the sector would develop on its own without any form of government intervention. Also, the CfE covers other areas of Customs activity including Simplified Frontier Declarations (SFD) and trials regarding experimenting with the aggregation of VAT declarations. Simplified frontier processes have already been touched upon, but there seems to be renewed interest in Entry In Declarant’s Records (EIDR), particularly
if data can be directly imported into traders’ systems from information in the supply chain. Traders found aggregated VAT declaration rules to be too complex. Lastly, Transit was considered, and the problems identified were largely in line with those reported to BIFA by Members over many years. It should be remembered that this regime is governed by international convention. Some of the problems that users encounter with Transit are outside HMRC’s ability to rectify without the co-operation of other signatories to the convention. At a time when our sector has been under constant pressure, the outcome of the CfE is to be welcomed. BIFA always argues the case for the important role that Members fulfil in facilitating international trade and it is clear that the majority do it well. Inevitably there is even more change on the horizon and potentially increased regulation, even if it is voluntary, although as one person commented, “I thought that AEO-C was meant to be the badge to identify the good agent”. The core message being HMRC needs to look at existing standards and ensure that these work before considering the implementation of any new schemes.
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September 2022
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