Firstly, it ensures the smooth flow of goods across borders, minimizing delays and avoiding disruptions in your supply chain. Compliance is essential for businesses to avoid hefty fines, legal issues, and potential loss of import/export privileges from customs authorities, which can result from violations of customs laws. Submitting a customs declaration is the legal act of placing goods under customs supervision. The data submitted in these declarations can present significant risk for companies involved in cross-border trade.

Also, adhering to customs laws and regulations supports fair trade practices by ensuring that all businesses operate under the same rules, creating a level playing field within the internal market of the EU. Therefore, understanding and complying with customs regulations is not only a legal obligation but also a critical component of successful international and sustainable trade.

When submitting a customs declaration, several significant compliance risks can arise, which could have serious implications for your business. One of the primary risks involves the misclassification of goods, where incorrect tariff codes are applied, leading to improper duties and taxes being assessed and other product specific regulatory rules being missed. This misclassification can result in fines, penalties, and delays in clearance.

Additionally, inaccuracies in the declared value of goods and origin of goods can attract scrutiny and penalties for underpayment of duties and VAT. This can lead to significant financial penalties many years after your goods have been customs cleared.

Another major risk is the failure to provide complete and accurate documentation, which can lead to the seizure or holding of goods at customs. Non-compliance with specific country regulations regarding prohibited or restricted items can also lead to severe legal consequences, including criminal charges. Moreover, consistent errors or discrepancies in declarations can flag your business for customs or tax audits, increasing operational costs and demanding extensive time and resources to resolve compliance issues. Therefore, meticulous attention to detail and an up-to-date understanding of applicable customs regulations are essential to mitigate these risks.

After your goods have been delivered to your customer, you indeed have ongoing post-clearance obligations and liabilities that must be managed to ensure full compliance with customs regulations. These responsibilities include maintaining accurate records of transactions, documents, and declarations for a specified period, which varies by country but is typically several years. In the EU, you have a minimum of 3 years post clearance obligations to ensure your customs declaration data is compliant. For VAT compliance it is higher and will differ throughout EU member states.

This record-keeping is crucial for potential audits by customs authorities to verify the correctness of paid duties or VAT and compliance with import/export regulations. Additionally, if discrepancies or infractions are discovered after delivery—such as underpayment of duties or VAT, misclassification of goods, or non-compliance with licensing requirements—you may be liable for retrospective penalties, additional duties, or other legal consequences. Ensuring your customs declaration has all the correct data inputted at source, and individual system automated compliance checks on key data inputs is applied, will significantly reduce your post clearance compliance exposure.

There are no licensing requirements in the EU or UK to submit customs declarations to customs authorities’ systems. Manufacturers, buyers, or sellers of products can submit customs declarations as well as customs agents. You must use a software system integrated with customs authorities to send these declarations. If you use a customs agent to submit customs declarations on your behalf, you must ensure they are empowered to do so by signing a direct or indirect representative form.

Representatives who fail to state that they are acting as a representative, or who cannot produce evidence of empowerment, will be deemed to be acting in their own name and on their own behalf. Consequently, they will also be the debtor in respect of any customs debt arising (including any debt arising from a subsequent audit).