AAT over-turns Customs decision to cancel customs broker’s license
AC 221 archive stories
Thursday, 07 March 2013
The Australian Customs and Border Protection Service (Customs & Border Protection) brought to the attention of the National Customs Brokers Licensing Advisory Committee (NCBLAC) a detailed compliance report. During October 2012, NCBLAC decided to cancel the corporate license of the customs brokerage subject to the report. This decision was given stay upon payment of a bond and an expeditious review of the decision to be completed by the Administrative Appeals Tribunal (AAT).
The AAT heard the case and provided a decision on 27 February 2013.
Freight & Trade Alliance (FTA) director told subscribers to his website that the customs broker was subject to audit with a series of classification errors however none resulted in revenue adjustments. Further audit activity identified that containers had been moved (presumably underbond) and delivered direct to importers without payment of duty. There was also a claim of failure to remit client funds for the payment of duty within a reasonable period of time. These events were after a circumstance when EFT payments by the customs broker were dishonoured resulting in Customs and Border Protection removing the customs brokerage’s entitlement to pay EFT. In excess of A$30K of Infringement Notices was paid by the customs brokerage.
Commenting on the findings Zalai said: “The AAT was sympathetic to extenuating circumstances including serious illness to key personnel and a review of the customs brokerage’s financial standing. Given the seriousness of cancellation of customs broker license, the AAT was of the view that there must be cogent evidence that there is a significant risk of future breach”.
The AAT concluded that a reprimand is necessary to protect revenue and / or ensure compliance by the customs brokerage stating “First, a formal reprimand provides a clear message to the applicant that its conduct fell below the standards expected of an entity granted the privileges and rights to be a licence holder. Secondly, but perhaps more importantly, a reprimand establishes guidelines for other licensed customs brokers about the type of conduct that will attract regulatory intervention and, if repeated and systemic, may lead to cancellation or suspension.”
FTA’s Compliance and Litigation Counsel John Law said: “Customs brokers would be unwise to expect that this decision is authority for the proposition that they will only be given a slap on the wrist if they (a) deliver cargo without authority and (b) do not pay the duty on goods for several months after delivering cargo, as was the case here.
“Decisions are made on the basis of the facts in each case, so other customs brokers should not expect that they will necessarily achieve the same very favourable outcome achieved here, if they engage in this style of behaviour. “Customs & Border Protection may believe they have identified errors of law in the decision and take an appeal to the Federal Court.
“The introduction of a trust facility for this broker may be the thin end of the wedge, with the regulation of customs brokers possibly moving towards the imposition of trust accounts on brokers at some time in the future.
“Considering the nature of a customs broker’s business operations, the onerous responsibilities imposed on trust accounts would have a devastating impact on the ability of many customs brokerages to operate and survive.
“Customs brokers should “watch this space” with interest and as always, those who operate within the law have nothing to be concerned about,” added Law.
AAT over-turns Customs decision to cancel customs broker’s license
AC 221 archive stories
Thursday, 07 March 2013
The Australian Customs and Border Protection Service (Customs & Border Protection) brought to the attention of the National Customs Brokers Licensing Advisory Committee (NCBLAC) a detailed compliance report. During October 2012, NCBLAC decided to cancel the corporate license of the customs brokerage subject to the report. This decision was given stay upon payment of a bond and an expeditious review of the decision to be completed by the Administrative Appeals Tribunal (AAT).
The AAT heard the case and provided a decision on 27 February 2013.
Freight & Trade Alliance (FTA) director told subscribers to his website that the customs broker was subject to audit with a series of classification errors however none resulted in revenue adjustments. Further audit activity identified that containers had been moved (presumably underbond) and delivered direct to importers without payment of duty. There was also a claim of failure to remit client funds for the payment of duty within a reasonable period of time. These events were after a circumstance when EFT payments by the customs broker were dishonoured resulting in Customs and Border Protection removing the customs brokerage’s entitlement to pay EFT. In excess of A$30K of Infringement Notices was paid by the customs brokerage.
Commenting on the findings Zalai said: “The AAT was sympathetic to extenuating circumstances including serious illness to key personnel and a review of the customs brokerage’s financial standing. Given the seriousness of cancellation of customs broker license, the AAT was of the view that there must be cogent evidence that there is a significant risk of future breach”.
The AAT concluded that a reprimand is necessary to protect revenue and / or ensure compliance by the customs brokerage stating “First, a formal reprimand provides a clear message to the applicant that its conduct fell below the standards expected of an entity granted the privileges and rights to be a licence holder. Secondly, but perhaps more importantly, a reprimand establishes guidelines for other licensed customs brokers about the type of conduct that will attract regulatory intervention and, if repeated and systemic, may lead to cancellation or suspension.”
FTA’s Compliance and Litigation Counsel John Law said: “Customs brokers would be unwise to expect that this decision is authority for the proposition that they will only be given a slap on the wrist if they (a) deliver cargo without authority and (b) do not pay the duty on goods for several months after delivering cargo, as was the case here.
“Decisions are made on the basis of the facts in each case, so other customs brokers should not expect that they will necessarily achieve the same very favourable outcome achieved here, if they engage in this style of behaviour. “Customs & Border Protection may believe they have identified errors of law in the decision and take an appeal to the Federal Court.
“The introduction of a trust facility for this broker may be the thin end of the wedge, with the regulation of customs brokers possibly moving towards the imposition of trust accounts on brokers at some time in the future.
“Considering the nature of a customs broker’s business operations, the onerous responsibilities imposed on trust accounts would have a devastating impact on the ability of many customs brokerages to operate and survive.
“Customs brokers should “watch this space” with interest and as always, those who operate within the law have nothing to be concerned about,” added Law.
