A recent Tax Appeal Commission ("TAC") determination1 highlighted the importance of establishing appropriate customs representation when importing goods into the EU.
In summary, the TAC upheld a Revenue demand for customs duty from a customs agent in respect of the importation of goods from the UK post-Brexit. As the customs agent was not in a position to demonstrate that it was empowered to act as a 'customs representative' of the importer, the customs agent was deemed to be liable for the customs duty arising.
Factual Background
The appeal to TAC was brought by a customs brokerage company (the "Appellant") which purported to act as customs agent of the importer of second-hand motor vehicles into Ireland from the UK. The motor vehicles were subject to a claim under Great Britain Preferential Origin ("GPBO") and Returned Goods Relief ("RGR") on importation and Irish Revenue disputed the eligibility of the goods for these reliefs and notified a customs debt of €402,963.20 to the Appellant.
The Appellant contended in the first instance that it was entitled to claim relief under either the GBPO and / or RGR but more fundamentally, it argued that the Appellant was a customs representative only, not the importer and therefore, was not liable for the customs debt.
Customs Representation - UCC
Article 18 and 19 of Regulation 952/2013 of the Union Customs Code (the "UCC") provide that any person may appoint a representative in their dealings with the customs authorities to perform the acts and formalities laid down by customs rules. The customs representation may be direct or indirect. A direct representative acts in the name of and on behalf the person that they are representing whereas an indirect representative acts in their own name but on behalf of the person that they are representing. The mode of representation is important because a direct representative will not be held liable for customs debts whereas an indirect representative will be held jointly and severally liable for any customs debts, with the person they are representing, in accordance with Article 77(3) UCC.
All customs agents are required to specify the capacity in which they are acting when completing the relevant customs declaration. In addition, where a person is acting as a representative they must be in a position to produce to Revenue, on demand, evidence of their authority to act as such. This is known as 'empowerment'.
In this case, the Appellant failed to specify in a number of declarations that they were acting as a customs representative and not the importer. In addition, for most of the importations, the Appellant was not in a position to produce empowerment documentation to establish that the Appellant was correctly appointed as a customs representative.
The Commissioner emphasised the mandatory language of Article 19 of the UCC: "a representative shall state that it is acting on behalf of the person represented and shall specify whether the representation is direct or indirect." The Commissioner also noted the Appellant was an experienced customs representative and should have been "acutely aware of the importance of establishing customs representation." Accordingly, the Commissioner upheld Revenue's imposition of the customs debt.
Conclusion
The determination highlights the importance of having the appropriate customs arrangements in place, in respect of every consignment of goods imported into Ireland. Whilst it may seem unfair that the actual importer should escape liability and that a customs agent should unwittingly be exposed to the full customs duty liability upon importation, the UCC provisions are clear and this determination shows that the TAC will not hesitate to uphold demands for customs duty from customs agents who have failed establish their valid appointment as a customs representative. The determination also demonstrates the need to ensure that customs declarations are completed accurately and, in particular, that customs agents specify whether they act as a direct or indirect representative.
Footnote
1. TAC Determination 19TACD2023
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