Time to Focus on Customs Compliance

Time to Focus on Customs Compliance

In our latest BDO Customs blog, Sanja Novak, Manager, Customs and International Trade discusses the current issues that businesses trading with the UK are experiencing and why now is the perfect time to educate yourself on the correct procedures and requirements to avoid penalties when trading (importing/exporting) with the UK. 

Prior to 1st January 2021, the focus for most businesses trading with the UK was moving their goods across the border with minimal unnecessary stops/delays. While the end of the Brexit Transition Period on 31st December 2020 led to significant initial delays, six months later, there is now indication that the daily movement of goods is happening without any major delays.


Current issues facing businesses trading with the UK

We are now seeing that many companies are using customs representatives (agents, hauliers, freight forwarders) to submit customs declarations on their behalf, relying directly on their expertise and experience.

In this instance, it is important to acknowledge that there are two types of customs representations:

  1. Direct customs representation; and
  2. Indirect customs representation

With direct representation, the agent has no responsibility (in general) for the information stated on the customs declaration. The full responsibility lies with the trader (importer/exporter).

Revenue assumes that all customs declarations submitted contain the correct information. As misdeclarations are possible, it is necessary to validate a selection of declarations, by audit, to confirm compliance.
If your trading activities include imports/exports (or both) to or from a non-EU country, you will be subject to a customs audit.

Revenue will analyse your previous three years’ (+) when conducting an audit of your businesses customs documentations.


Shift the focus

With daily trade now being conducted without major delays, businesses now need to focus on customs compliance to avoid administrative penalties. Non-compliance with customs legislation may not be spotted until a customs audit is completed by Revenue.  There is a different range of penalties that could incur as a result of non-compliance such as:

  • Failure to make a declaration (penalty of €2,000); 

  • Failure to submit a declaration on time (penalty of €250 for each month or part thereof for which a declaration is outstanding, subject to a maximum of €2,000); 

  • Submitting an incorrect or incomplete declaration (penalty of €100); 

  • Not being in possession of documentation necessary to support an electronic declaration (penalty of €100); 

  • Failure to comply with Article 135, Article 233(1), (2) or (3) or Article 242 of the Union Customs Code (penalty of €500); and

  • Failure to comply with any other provision of the Customs Acts (penalty of €250).

While the range of infringements listed above will cover most situations that may arise in practice, the most likely situations to involve penalties are incorrect import/export declarations or cases of missing supporting documentation. However, any other instance where infringements come to light can also be considered.

The most common reason for non-compliance is in relation to the content and quality of the document. As a trader, you are responsible for the information stated on the customs declaration.

Customs agents are not responsible for your customs declaration

To avoid unnecessary administrative penalties, traders should familiarise themselves with the content and requirements of a customs declaration. 


How can we help

At BDO, our Customs & International Trade team can help your business in getting familiar with the context of customs declaration and the requirements in cross border trade.

We have ran a number of customs clearance workshops, designed to help businesses who import or export. The 4-hour workshops, run over 2 days, will inform you of the steps you need to take in order to continue with cross border trade.

Our workshops will assist you with:

  • Completing and reviewing customs declarations - step by step guide for import and export

  • Working  with a clearance agent for the first time

  • Understanding the information required by your customs clearance agent

  • Guidance on how to use Taric

  • Understanding the meaning and implementation of Incoterms

  • Basics of Customs valuation and what charges should be included in customs value

  • Customs documentation required

  • Preferential tariff treatment

  • Customs Compliance

To register, contact customsclearance@bdo.ie or if you have any questions related to the information discussed in this blog, please email snovak@bdo.ie