Being compliant with customs is essential for successful global trade. It ensures goods can be moved across borders legally, efficiently and in line with national and international regulations.
Staying compliant will help your business avoid fines, delays and reputational damages while maintaining clean supply chain operations, so you need to understand what could be a compliance risk with your business.
Key areas to focus on to ensure customs compliance
It is the business’s job to ensure their practices are compliant with customs regulations.
Some of the most important areas to check are:
- Classification of goods – Double-check that your goods are classified correctly under the Harmonised Systems (HS) Code. If you classify your goods incorrectly, it can lead to under- or overpayment of duty taxes. In the worst-case scenario, customs agents could even seize your goods!
- Valuation of goods – Goods must be valued at exactly their worth. Insurance and freight are both also included in this declaration. Valuing goods too little or too much can result in penalties and excessive duties.
- Origin rules – Knowing exactly where your goods have originated from is crucial to declaring. If you declare correctly, you can benefit from trade deals and preferential tariffs.
- Documentation – Ensuring all documents regarding the shipments are kept accurate and complete is essential to ensure smooth shipments and no fines.
- Customs Declarations – Make sure all declarations are accurate and submitted on time.
- Compliance with import/ export controls – Verify if your goods are subject to restrictions, licensing, or prohibitions.
- Regular audits – Conduct periodical audits of your customs processes and declarations to identify gaps in compliance.
What are the penalties for non-compliance?
There are strict rules around customs compliance and HMRC can impose ever stricter penalties for non-compliance.
Financial penalties of up to £2,500 can be issued for errors in customs declarations. If you are found to have purposefully not complied, the penalties can be even harsher.
Non-compliance often will result in goods being held at the border for inspection or seizure. This can often delay production schedules and damage consumer relations.
Many companies that fail to comply lose customs simplification benefits, which leads to an increase in administrative workload and an even larger increase in costs.
In severe cases, customs violations can lead to criminal prosecution when fraud or deliberate misdeclaration is involved. Legal action can be taken against both the company and the responsible individuals.
How we can help you
Getting caught in a customs battle slows processes massively and can impact your company’s reputation.
Staying up to date with customs compliance is vital to ensuring your international trade is effective and efficient.
Here at Reanda, our team can offer advice on how to stay within the lines of customs compliance to avoid hefty fines and reputation damage.
Get in touch with our team today for advice on customs best practice.