Policy & Compliance
because it was not correctly empowered and thus became jointly and severally liable for the Customs debt. Our suggestion is that, at the very least, the sub- agent should conduct due diligence checks on the agent on whose behalf it is acting. This check should include questions to the master agent about what due diligence checks are undertaken by it on its customers. We accept that this is additional work but in 2023, a significant upturn in HMRC compliance activity has been noted and this is impacting on Members. Liability for a debt HMRC guidance clearly states that where the direct Customs agent makes a deliberate or unreasonable error or acts without empowerment, that it may become jointly and severally liable for the Customs debt due. Further guidance is available in the following document Customs debt liability – GOV.UK (www.gov.uk) . Indirect Customs agents are always jointly and severally liable for Customs debts. Having read available guidance, the agent (representative) has significant responsibilities to ensure that the correct empowerment from the importer is in place and passed on as appropriate. Also, from the sub-agent’s perspective, it is essential that it checks the documentation and especially the empowerment to ensure that the agent confirms that its principal has empowered it to pass it on to a sub-agent. Whilst not preparing the Customs declaration, the agent is responsible for checking it to ensure that it has been completed in line with their instructions. Please note, the above guidance is drafted based on the information currently available on various government sources and is valid at the time of writing.
could be in the form of written standing instructions regarding handling imports for specific clients. Alternatively, it may be that written instructions are provided for each and every clearance by the master agent to sub-agent. The representative retains responsibility for ensuring the declaration is made in accordance with the instructions provided by the importer. Indirect representation and sub-agents: Where an agent (representative) delegates the making of a Customs declaration to a sub-agent, in an ‘indirect’ capacity on behalf of the importer, the data elements within the Customs declaration must be completed as previously detailed in this article in CDS completion rules. It is the representative who retains joint and several liability with the importer for the Customs debt. It is permitted for the Customs agent (representative) to be appointed as the indirect Customs agent of the importer, but they can appoint the sub-agent to be a direct Customs agent to themselves. The relevant guidance in Customs debt liability – GOV.UK (www.gov.uk) is clear on the subject: “Agents acting as indirect representatives can ask sub- agents to represent them in a direct capacity. The sub-agent only becomes liable for the debt if they make a deliberate or unreasonable error that would make them jointly and severally liable”. From the sub-agent’s perspective, this is why it is essential that they are correctly empowered by the agent. One other area to consider is what due diligence checks a sub-agent should undertake on either the agent or importer. At BIFA we have been involved in two situations where the agent was not ‘established’ in the UK. This has significant detrimental liability on the sub-agent
“ HMRC guidance clearly states that where the direct Customs agent makes a deliberate or unreasonable error or acts without empower - ment, that it may become jointly and severally liable for the
Customs debt due
November 2023 | 13
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