Policy & Compliance
Acting as a sub-agent: What risk are you exposed to? In this article, Robert Windsor of the BIFA Policy and Compliance team considers the appointment of an agent and sub-agent in CDS and provides guidance to declare the parties in the import Customs declaration
S ince its Customs Representation and sub-agents. This article aims to clarify the situation, although it is a dif fi cult subject to cover. We must emphasise that there is no speci fi c legislation covering this function. In the TCTA 2018, ‘sub-agent’ is not even mentioned. This guidance must be read in conjunction with CDS Declaration Instructions for Imports – Group 3 Parties – see QR code. As we have discussed many times with Members, both verbally and in writing, HMRC should always check the paperwork trail to see who has authorised whom, to do what, and in what circumstances. What we must emphasise is that the importer must have authorised a Customs agent on its behalf, whether it be in a ‘direct’ or ‘indirect’ capacity. However, the importer must also empower its Customs agent to delegate Customs clearance to sub-agents. CDS completion rules Establishment online webinar, BIFA has received numerous calls regarding the responsibilities of CDS declaration completion rules require the detail of all parties involved to be included in the Customs entry, such as the importer, master-agent (representative), and sub-agent (declarant). The importer’s details must be declared in DE 3/15 or 3/16. Please note: the EORI number is declared in DE 3/16; where this is not held the importer’s full name and address is declared in DE 3/15. The details of the sub-agent (declarant) must be entered in DE 3/17 or 3/18. Please refer to the CDS Completion Rules for detailed completion guidance. As the guidance clearly states: “A representative should only be declared to CDS where the representative [party who will be responsible for the Customs formalities] differs from the declarant declared in DE 3/17 and/or DE 3/18. For example, where the representative contracts with a sub-agent to submit the Customs declaration. The sub-agent’s details are to be entered in the declarant’s data elements; the representative [who holds the contract with the importer to complete the Customs formalities] will be entered in the representative’s data elements.” The guidance continues: “If a representative sub- contracts the completion of the declaration to a third party, the sub-agent submitting the declaration must declare its details in DE 3/17 or 3/18 [declarant] and
the details of the representative that employed it must be declared in DE 3/19 or 3/20
[representative].” Representation
Direct representation and sub-agents: Where the importer appoints a Customs agent to act as a direct Customs agent on the former’s behalf, but this agent does not have a badge to undertake Customs clearance at a specific location, the use of a sub-agent will be required. In order to be compliant, the agreement between the importer and Customs agent must permit the latter to pass on the empowerment to a sub-agent to act in a direct capacity. The following guidance from Customs debt liability – GOV.UK (www.gov.uk) is clear on the subject. “If the agent wants to delegate tasks to a sub- agent, the agreement between the agent and the principal must make an allowance for this. If it does not, the sub-agent will not be empowered to directly represent the principal and will be considered as acting on its own behalf, and fully liable for any Customs debt that occurs.” In an ideal world the agent should pass on a copy of its original agreement with the importer which must, from the sub-agent’s viewpoint, include confirmation that the importer has appointed the agent as its Customs representative and the latter is entitled to pass the empowerment on to a sub-agent. If the agent (representative) is not in a position to pass on the original correspondence from the importer but has been authorised by the importer to pass on the empowerment, they need to authorise in writing the sub-agent in line with the original authorisation to act as the direct Customs agent of the importer in all dealings with HMRC. The agent confirms that it is empowered to pass on the relevant empowerment, that documentary evidence of the original authorisation is retained and will be made available on request, such as HMRC inspection, etc. The importance, from the sub-agent’s viewpoint, of being correctly empowered is clear, because as per the above HMRC guidance if it is not, it runs the very serious risk of being liable for Customs debts. At this point it has to be emphasised that this empowerment can be passed on only once from agent (representative) to sub-agent (declarant). The sub-agent cannot pass this empowerment on to another agent. It is essential that the agent and sub-agents agree operational procedures between themselves; these
“ CDS declaration completion requires the detail of all parties involved to be included in the Customs entry
12 | November
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