Customs Simplified Procedures: New criteria and conditions for authorisation and use

21 December 2009

Businesses wishing to operate Customs simplified procedures will soon have to meet conditions similar to those for Authorised Economic Operator (AEO) (see Commission Regulation (EC) 1192/2008).

The standards in question relate to:

• Traders accounting systems and records
• Customs Compliance
• Financial Solvency

For those companies that already hold authorisations, you will be obliged to reapply for reauthorisation by 30 June 2010. Bearing in mind that it will take some time for HMRC to process your application, it is highly advisable that you apply as soon as is possible.

What are these new standards?

As highlighted above, the standards in question are concerned with your accounting systems and records, your customs compliance history and financial solvency. It is up to you to prove to HMRC that you operate robust systems and procedures as otherwise you will not be authorised to operate simplified procedures.

Accounting systems and records

AEO authorisation requires a complete and robust audit-trail to be established within your business. CFSP now requires the same thing. HMRC will ask you what IT systems you use, where your IT operations are undertaken and whether your IT operations are sufficiently secure against unauthorised access? Also, HMRC will wish to know how you archive and store your documents.

Compliance Record

The authorities will ask you about your compliance records over the past three years and your ability/capability as a company to detect any compliance issues if/when they arise.

Financial Solvency

You must inform HMRC about whether your accounts are up-to-date and whether you have submitted your annual accounts to Companies House on time?

So how do I know if my procedures are robust enough to achieve authorisation?

Customs Authorities worldwide are now focussing on the ‘internal controls’ of businesses. They are particularly interested in documented procedures regarding:

• The purchase, storing, production and sales of products.
• The purchase and receipt of non-EU goods.
• Stock control and stock movements.
• Instructing of agents/freight forwarders and;
• The clear delineation of customs responsibilities within a company.

Reviewing your customs operations

It is highly advisable that you conduct a review of your customs operations. One of the questions on the application form is whether you have conducted an internal/external review of your customs functions recently? Although not explicitly stated, an external review by a team of specialists in most cases will hold more weight and credibility with HMRC when processing your application.

How can International Trade Solutions help?

International Trade Solutions is a specialist trade consultancy that deals exclusively with EC Customs Law. Reviewing the customs functions of our clients is just one of the many services that we offer. If you would like to discuss the new requirements for CFSP or Authorised Economic Operator Status or any other customs issues call us on (01905) 619229 or alternatively email as:

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