CFSP14500 - Processing the application: Direct Representatives and traders' records

When a DR is employed to maintain certain supporting documentation or records for the authorised trader, these records/ documents must be made available at the authorised trader’s premises on request to allow Customs to undertake any necessary post-clearance checks or audits. The timescales for the presentation of these documents must be specified in the authorisation.

Additional conditions when an authorised party is using a DR

In all instances where an authorised CFSP trader is using a DR the officer must ensure that the following conditions are met. They should stress to the trader that no legal liability is transferred from them to the DR. It always remains the authorised trader’s responsibility to:

• provide the DR with information relating to all imports covered by the Simplified Procedures within each period and to ensure the accuracy and completeness of all source documents and other data
• ensure that any data processed on their behalf by the DR is accurate and complete
• ensure that the DR:

1. submits to Customs valid declarations within the time limit specified in their authorisation
   
   
2. archives, retains and makes available sufficient information to allow retrospective checks to be undertaken by Customs
   
   
3. allows Customs to audit their system including the archives of all declarations for 4 years from the date of their submission / transmission on request (other legislation eg VAT, Excise or Company taxation, may specify that this information must be kept for longer periods)
   
   
4. ensures the responsible declarant on the SFD and SD (ie box 8) is the authorised legal entity
   
   
5. completes box 14 with their own TID
   
   
6. keeps an audit trail
   
   
7. keeps the records in a specific place (state where)
   
   
8. will present the records to Customs at a specific place when requested by Customs (state where)
   
   
9. has sufficient notice to present records to Customs and
   
   
10. will surrender the required documents eg GSP certs to Customs at a specific place and within a set period of time (state where and the required time to present).
    
    

The officer should note within the trader’s folder and authorisation pack the agreed arrangements by which these responsibilities will be met (ie activity will be performed by the CFSP trader or their representative). The officer must also ensure that the CFSP trader is made fully aware of their responsibilities and liabilities. Arrangements should also be agreed between the officer and the CFSP trader for:

• timescales within which the records/ documents will be made available for inspection
• the location at which supporting documents such as GSPs, transit documents etc will be surrendered and
• the location at which the full records/documentation will be made available for audit, post-clearance verifications, etc.

It is important to verify all these points prior to authorising the trader to ensure that no records/ documentations will fall through the cracks (ie either party assuming it being maintained by the other) and that the officer may obtain full access to all records within reasonable timescales.

The officer should record the results of the above enquiries in the trader’s authorisation and folder and send a copy to the CFSP authorised trader for their records. These records will prove a useful tool for any assurance activity or audit visits and will assist the officer should a dispute occur at a later date.

Note: The responsibility for customs debts arising from any irregularities orbreaches of the CFSP authorisation remains with the CFSP authorised trader.

Liability for the CFSP authorisation, security and customs debt

The authorised CFSP trader retains responsibility for meeting any criteria and conditions of authorisation and liability for any customs debts arising from their use of CFSP. However, the representative is not absolved from any criminal liability eg CEMA79 Sect 167 offences (incorrect declarations), but civil penalties are far more likely. In matters of criminal liability it is a question of who does what rather than who was authorised to do anything. The CFSP trader is solely responsible for providing the security for duty required to operate CFSP, as detailed in CFSP12000. This may not be provided by the DR. The trader also retains full responsibility for any irregularities or demands for duty.

Any failure to comply with the conditions of their authorisation regarding the maintenance of these records will result in action being taken against the perpetrator(s) but civil liability for any customs debt that may arise will lie with the authorised trader.

Using a DR for completion/ presentation of SFDs and SDs

SFDs may be completed and submitted on behalf of an authorised CFSP trader by their agent acting as a DR. The CFSP authorised trader can contract this to their agent without gaining customs approval to do so.

SDs can also be submitted by an agent/warehouse-keeper acting as a DR , however the CFSP authorised trader must gain prior approval from their authorising officer before using this facility. In either case, they must ensure that they provide the DR with accurate information as the authorised trader will be held legally liable for all declarations made in their name by the DR.

If a DR is completing the declarations, the officer will need to agree and document with the authorised trader:

• what information they will provide to their agent to allow them to make the correct entry
• how they will cross reference the agent’s SFDs to the SDs (sometimes this is a problem as often one DR is used to do the SFD and another to do the SD ie the CFSP trader’s DUCR must appear in box 44 on both the SFD and SDI)
• where the records will be archived eg who (trader or DR or split) is going to keep them and where
• what information the agent will provide to the trader to prove acceptance of entries eg will they send them a copy of the Customs Response (CUSRES)
• what action the agent will take if errors/ problems occur with the entry
• how Customs will access a copy of the entries held in the DRs CFSP system eg if the agent is archiving these, will the agent make them available on demand at their premises for audit
• timescales for accessing entries on the DR’s system
• how long the agent will archive the entries for eg the agent will need to archive them for 4 years after the entry date of the entry (other legislation eg VAT, Excise or Company taxation may specify that this information must be kept for longer periods) and
• how the information file is archived: eg original customs documents, information only (electronic), or will they simply print off and keep everything on paper copies.

The officer will also need to gain assurance of data integrity ie that the data cannot be amended/ altered once the CUSRES has been received, eg automatic down-load cannot be amended or deleted. This will enable the officer to validate the declarations on the trader’s system against the information held on MSS.

The officer should document the answers to each of these points within the trader’s folder and send a copy to the trader for their records. The outcomes to the above issues will prove a useful tool for audit visits and will help the officer if a dispute occurs at a later date.