AUSTRALIA CUSTOMS FRAUD WHERE GOODS ARE IMPORTED IN THE NAME OF NON EXISTING COMPANIES OR BY USING THIRD PARTY AND CUSTOMERS BROKERS RELIED ONLY ON INFORMATION PROVIDED BY FREIGHT FORWARDERS AND DO NOT CHECK THE IDENTITY OR BONAFIDE OF IMPORTERS by Paul Zalai — last modified Jul 08, 2014 02:46 PM At a recent industry briefing, the Australian Customs & Border Protection Service (ACBPS) stated that it is escalating its focus on “piggy back” consignments whereby entities are illegally using the identity of a third party. The ACBPS has interviewed several customs brokers checking what “due diligence” checks they have completed to confirm the identity of the importer. We understand that warnings have been issued, with ACBPS flagging that S243T administrative penalties could also be in scope. As previously noted in Freight & Trade Alliance (FTA) commentaries, there is an increasing trend for customs brokers to be engaged by freight forwarders and not the actual importers. In such cases, there is often no direct contact at all between the customs broker and importer and no Authority to Act (ATA) from the importer to the broker. In some of these cases, the goods concerned have included smuggled cigarettes or other illicit goods. Subsequent enquiries have revealed that the customs broker concerned relied totally on whatever information was provided by the freight forwarder and made no attempt to verify the bona fides of the importer, or even take reasonable steps to find out if a person or a company exists. The following commentary is provided by John Law, FTAs compliance & litigation counsel: It is timely to remind customs brokers that they need to exercise due diligence when submitting declarations in the Integrated Cargo System (ICS) on behalf of an owner. Customs brokers should be particularly careful when freight forwarders engage their services on behalf of an Owner. Section 4 of the Customs Act defines owner in very broad terms. It is quite possible that if a customs broker makes an import declaration for an owner who does not exist or cannot be found, or on behalf of an owner who does not authorise the customs broker to act on their behalf, the customs broker could theoretically at least, be held liable for any false or misleading statements in the declaration, or for unpaid revenue liabilities. Whenever a customs broker is engaged by a freight forwarder to submit information on behalf of an importer, it would be prudent for the customs broker to contact that importer and undertake appropriate due diligence. Failure to do so could have serious downstream consequences. It could be quite easily argued and prosecuted by ACBPS, we imagine, that (a) not identifying the owner and (b) acting without their authority so that (c) a serious error is made in an import declaration, is justification for changes to be laid against a customs broker pursuant to sub paragraphs 234(1)(d)(i), 234(1)(d)(ii) and 234(1)(d)(iii) of the Customs Act. Sub section 234(3) of the Customs Act provides as follows: (3) Where a person is convicted of an offence against paragraph (1)(d) in relation to a statement made, or an omission from a statement made, in respect of the amount of duty payable on particular goods, a court may, in relation to that offence, impose a penalty not exceeding the sum of 50 penalty units and twice the amount of the duty payable on those goods. For sensible people, the 234(1)(d) penalties should be sufficient incentive to not cutting corners when accepting client engagements. We understand that the ACBPS are currently preparing an Australian Customs & Border Protection Notice (ACBPN) aiming to provide further policy guidance to customs brokers.
Posted on: Sat, 12 Jul 2014 03:35:08 +0000
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