“The business sector will benefit from focus on declarations”
Laurens Booijink, project manager of Quality of Declarations (Dutch Customs)
In the coming period Dutch Customs will drastically improve the handling of declarations. Not only to enhance its supervision: the aim is to offer clarity to market parties about their declarations, and reduce any nuisance they may experience from inspections to a minimum. However, this requires the help of declarants: the more carefully they fill in their declarations, the sooner and more efficient Customs can inspect them.
It seems that not all declarants fill in their import and export declarations equally accurately, according to Customs officials. “For example, we see that important data are entered incorrectly, unclearly or not at all”, says Laurens Booijink, project manager of Quality of Declarations. “Sometimes people make mistakes, which means that incorrect declarations are submitted. The new declaration system of Customs, AGS, may prevent certain errors, but it does not recognise other errors. Because of an error in the declaration the correct duties may not be paid initially. This causes extra inspections and possible corrections, which are in particular a nuisance for the entrepreneur.”
According to Booijink, the quality of the declaration is important: “Customs does not have to inspect duly completed declarations from reliable parties, AEO-certified companies. However, sometimes we must decide to carry out inspections more frequently. When crucial data are not included in the declaration, which means that we do not know which items or market parties are involved in a consignment.”
In the coming period Customs will focus more on certain tax risks, such as tariff classification, origin and value. Booijink: “When we see such risks we will check declarations more thoroughly. When we find incorrect details, we impose a correction and notify the declarant. This makes a difference: the following declarations are usually correct.”
Customs invests in people and resources to give a new impulse to handling declarations. The service also has certain expectations regarding declarants: they should examine the quality of their declarations more critically. Booijink states: “We obviously expect that they know how to specify the classification, value and origin. And that they complete the accompanying data in a correct way.”
Valid EORI number
Declarants can start to improve their declarations at once. Booijink mentions a few aspects that are very important for Customs. “First of all, we ask people to always enter a valid EORI number of the market participant who is actually involved in the import or export of items. This sometimes goes wrong. For example, the tax number of a tax unit is sometimes used (tax unit: several entrepreneurs who are jointly regarded as an entity for turnover tax), instead of a subsidiary company in question.”
“We also see that some declarants fill in a Dutch tax number of a foreign market participant as if it were a Dutch EORI number,” Booijink continues. “When it concerns a company elsewhere from the EU, the declarant must use the EORI number which was assigned to this company in the country of origin. Market participants from outside the Union can request an EORI number in one of the member states where they are active.”
When no valid EORI number has been entered on the declaration, Customs must ask the company in question for this number during inspections, which leads to loss of time. It is then also impossible for Customs to reduce the number of inspections at a company.
Specific items description
Customs also asks declarants to use the specific trade name when filling in the description of the items. Preferably a trade name (brand and product number) of which the specifications can be found on the internet. It is also allowed to add the most important features of the items. Booijink: “We see that some declarants copy the general and extensive text of the chapter or item in question here. As a result, it is difficult for us to identify items and classify them on an item code level in the tariff manual. This may result in unnecessary inspections, a delay in the consignments and extra costs.”
It is possible to make progress on this point without any great effort, according to Booijink. “In 2015 we discussed this with a number of declarants who submitted their declarations. They stated that they had benefited from the fact that the work instructions for declarants had been tightened up, the declaration software had been adapted, which also applied to the underlying data files and automated delivery of the trade names by the client.”
Splitting into various items
Furthermore, customs legislation demands that declarants split their declarations into several items, when it concerns items that fall under different codes of the tariff manual. In this way the item code will always be correct, the correct duties will always be paid and Customs can assess the tax and non-tax risks of items more adequately.
According to Booijink, some declarants make mistakes here: “Our checks show that some persons create one item to declare all items. We take firm action against this. Declarants run the risk that they will have more inspections and possible corrections, certainly when it involves negligence.”
Booijink states how Customs wants to give the business sector a push in the right direction. “Communication is of primary importance for us. At the beginning of 2017 we will send a letter to all declarants of import and export declarations. In the course of next year we will contact the companies who show little progression for an interview. Then we both can examine which improvements can be made and within what period.”
When certain declarants still do not cooperate very much, Customs may proceed with inspections. However, this will not happen with most of the declarants, according to Booijink. “We expect that most AEO-certified customs representatives, importers and exporters will cooperate with us.”
Declarants will profit
Submitting better quality declarations has advantages for the business sector: less unnecessary inspections, clarity at once about the duties to be paid and (in the long term) less corrections on submitted declarations. Declarants will have to spend much time and effort to make these improvements possible. Customs is also aware of this. This is why Customs gives declarants the time to implement the required adjustments in their declaration process and software. “By introducing changes at the front they can prevent problems during the next stage”, Booijink concludes. “By doing this, they do themselves, their clients and Customs a favour.”
Customs will continue to inform declarants about their efforts to increase the quality of declarations through the Customs Business Consultation-forum (CBC). Early in 2017 Customs will send a letter about this subject to all declarants.
What is the opinion of FENEX?
“We think that it is good that Customs is highlighting the quality of declarations”, according to FENEX, branch organisation of forwarders and logistical service providers. “Submitting customs declarations is a profession that requires in-depth knowledge and experience. We support the approach chosen by Customs, because it in particular emphasises helping each other and not punishing or pointing to each other.”
“Customs should also act reasonably in this respect. It is easy to make small (typing) errors. We also think that the AEO status of a company should be considered. Last but not least, a degree of leniency should be offered in view of all drastic changes which companies are currently facing, and which create a great lack of clarity.”
“In the business sector we see that many companies have already taken the initiative themselves to improve the quality of declarations. For example, the number of course participants has quadrupled at our customs courses in the past three years. FENEX is also working together with Customs to improve the formulation of requirements in being allowed to act as representative. And we are currently also developing a tool at the request of our members through which companies can test their knowledge and expertise.”