CFSP14200 - Processing the application: pre-authorisation work

Pre-authorisation visit

It is essential that a pre-authorisation visit takes place to ensure that the trader can meet all the relevant conditions of their authorisation.

Authorising officers should be aware that Articles 261 (SDP) and 264 (LCP) of the IP stipulate that authorisation shall only be granted provided that:

• the applicants records enable the Customs authorities to carry out effective checks and
• it is possible to guarantee an effective check on compliance with import prohibitions or restrictions or any other provisions governing release for free circulation or other customs procedure.

Officers should be aware that without carrying out a pre-authorisation visit it would be extremely difficult, if not impossible, to provide this guarantee.

This visit should also provide the opportunity to discuss any issues arising from the trader’s application form, Authorising Officer's Checklist ( CFSP24000) and obtain any additional information necessary to issue the authorisation (please see CFSP14400 and CFSP14650 for details).

Pre-authorisation audit

Compliance with CFSP regulations, legislation and operating procedures is assured through systems based audit controls. Traders wishing to become authorised for CFSP should be subject to a full systems audit pre-authorisation. This will ensure that their operating and/ or computer systems are compliant with all the criteria and conditions required to operate CFSP. These pre-authorisation audits should ensure that the trader’s systems will be fully auditable and allow IT staff to make an effective check on CFSP operations and compliance post- clearance. Officers should ensure that the trader:

• maintains adequate, fully cross-referenced records
• is able to ‘communicate’ with HMRC systems
• will transmit valid, accurate and timely declarations to Customs
• will properly endorse, exhaust and surrender (as required) all supporting documents
• is compliant
• will not pose a significant risk to the EU/ revenue in their operations of CFSP
• has satisfactory management controls in place to minimise any ‘risks’ and
• fully understands and will meet their authorisation requirements.

Pre-authorisation checks

Irrespective of whether the visit takes place the following issues should, where appropriate, be discussed with the applicant:

• the nature of the goods to be imported or removed from a Customs Warehouse/ Free Zone
• the types of goods excluded from the procedures and those goods which are limited to certain procedures
• the officer will also need to identify if the applicant imports goods liable to quota, ADD or licensing
• the General Authorisation requirements including the submission of SDs and FSDs (including nil returns)
• security and payment requirements
• the requirement to maintain a system in support of the records kept which:

• the retention of supporting documents ie preference certificates and their annotation with the DUCR number
• the use of licences with the appropriate back up documents to support their exhaustion
• the testing procedure
• the applicants implementation plan and the date by which they wish to commence using the procedures
• the use of DRs and software suppliers.

At their own discretion the local officer may also wish to consider Audit Service computer audit staff involvement with regard to the design, testing and implementation of the applicant’s Simplified Procedures system prior to authorising the trader. In making this decision the following aspects should be considered:

• applicant’s compliance history
• revenue and other risks, eg DoTI licences and
• complexity of applicant’s system and operations.

It is vital that authorising officers also complete all other pre-authorisation checks and assurance activities detailed in this guidance before authorising any trader for CFSP.

Pre-authorisation compliance checks

As appropriate the authorising officer should check with the following areas to ensure that there is no reason why the applicant should not be authorised:

• MSS to check types of goods imported and that the applicant makes regular declarations
• MSS standing data to ensure the TURN(s) are correct
• Customs & Excise Nominal Tracking And Unique Reference (CENTAUR)
• Detection Control Information System (DCIS)
• National Imports Relief Unit (NIRU)
• Business centres for VAT and Intrastat compliance
• Central Deferment Office, DMB Banking Southend to check deferment details and compliance history (please complete a ‘CDO1’ form with the trader’s details and send to DMB Banking Southend as soon as possible after receipt of the CFSP application form)
• Trader’s folder (if one already exists)
• Local office database to check details of, and compliance with, other customs procedures whether listed on the application or not.

If you have any reason to doubt the traders suitability as a result of these checks then you should research the exact nature of their non-compliance further to establish whether:

• it was the result of recklessness or negligence
• it was a deliberate attempt to avoid the payment of revenue or
• it was a deliberate attempt to evade their responsibilities.

If there is sufficient reason to believe that the trader was knowingly non-compliant then the officer should discuss with line management the risks involved with their authorisation for CFSP. If these risks can be minimised through the implementation of additional controls or restrictions in their operation of CFSP then the authorisation may be issued.

If there is reason to believe that the trader will pose a significant risk to the revenue/ society then line management may recommend that the application be refused. Line management may wish to consult the CFSP Facilitation Team in Southend prior to refusing to grant the authorisation. Further information on the refusal of an application may be found in CFSP19100.

Note: The refusal to issue an authorisation is an appealable matter and the officermust be prepared to defend their decision to the trader and/ or appeals officer/tribunal.