Approval: deciding to grant or refuse an approval
Once you have completed the desk audit and if appropriate the pre-approval visit, a decision must be made either to approve or refuse the application.
Granting the approval
It is vital that the decision made is fully substantiated by the findings from the desk audit and/or the pre-approval visit. Therefore, you must ensure you have evidence to support your decision; generalities, hearsay or gut feelings will not suffice. If you are in any doubt as to the acceptability of the application, and require further information, the business should be advised in writing that the application will not be progressed until you receive the necessary information.
As the assurance officer you are the ‘decision maker’ in terms of granting or refusing approval and are responsible for inputting the decision on to RCM.
Note: Only if you are completely satisfied that the applicant is a ‘fit and proper’ person to be an approved wholesaler should you grant approval.
You should not feel pressured into granting approval. The default position should never be to simply approve if you have genuine doubts about doing so. The AWRS has been introduced to remove businesses that are not fit and proper from the sector, so approval should never be granted as a matter of course. You should seriously consider refusal or approval with conditions if you think this is the proportionate response.
If you are satisfied that the information you have received and verified during the desk audit and/or pre-approval visit confirms that the applicant is a ‘fit and proper’ person, the approval should be granted.
Approval of the application should be noted on RCM/CRMM, which will generate an automatic notification (letter of registration) with the wholesaler’s AWRS Unique Reference Number (URN) and if there are any conditions, these should be recorded so that they are listed on the notification. There are standard AWRS letters, including a letter of registration which will be available via the IT system.
Additional conditions or restrictions
Section 88C(3) of ALDA provides for appropriate conditions or restrictions to be applied to an approval. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
Example conditions might include:
- prescribing additional record-keeping requirements
- the need to notify changes of suppliers and/or customers (if appropriate)
- restricting an approval to meet a specific trade need
- requiring the business to notify us of specific [high risk] sales
- placing conditions on an approval to limit the premises or storage facilities where the business can operate from
- imposing a time limit on an approval, for example, when closing a business down we might give it time to sell its stock
- recording delivery details from specific suppliers.
This list is not exhaustive.
Note: You should not use conditions on an applicant’s approval as a substitute where the risk to the revenue justifies that refusal or revocation would be the appropriate response.
You should also consider the length of time a condition is to be in place. A condition must be proportionate to the risk and you should consider its impact on compliance.
Refusing an application for approval
ALDA S88C(2) and 88C(5) provide the legal provisions to allow us to refuse (or revoke) a business’s approval, provided we have good reason to believe the business does not meet our fit and proper tests. You must base a decision to refuse an application on solid evidence that will support the decision made if it is tested at a tribunal hearing.
Your evidence must show that, on the balance of probability:
- the wholesaler is not a ‘fit and proper’ person to hold an AWRS approval
- that there is, or would be, a significant risk to the revenue; or
- that any of the requirements stated within this guidance (or Excise Notice 2002) have not been satisfactorily met.
Your decision should be based on the suitability of the business and its key officials and guiding minds. The credibility of the business should be a key factor in that decision.
As the assurance officer, you are the ‘decision maker’ in terms of granting or refusing approval and are responsible for drafting the reasons for refusal on the refusal letter. Stating all the grounds for refusal is vital as the applicant must know exactly why approval has been refused.
Where grounds for refusal (or revocation) are identified, you should agree with your line manager (at least Senior Officer level (SO) is recommended) before taking the appropriate action.
If you refuse an AWRS approval, you should also check to see if the applicant holds any other excise approvals and consider whether you need to review the fit and proper status of the business to hold these approvals in light of the AWRS refusal.