Guarantee Requirements for Customs Authorisations and Approvals: Joint Contractual Liability Guarantees
Written promises to pay, this type of guarantee will only be considered as financial security for potential debts where the revenue risk is low and a light touch security is appropriate. JCLs will not be accepted as security for actual debts. JCLs may only be used as security for potential debts within the UK. These may not be used for cross-Member State authorisations and approvals.
These are acceptable only where:
- It is assessed that the proven solvency and compliance assessments for the applicant identifies demonstrate a low risk to revenue
- The Joint Contractual Liability (JCL) is provided by an independent third party
- Satisfactory financial solvency checks are completed on the guarantor.
Applicant’s may choose to supply a single JCL to cover the full liabilities of their authorisation or approval or, where a number of third parties are involved, for example depositors in a public warehouse or temporary storage premises, applicants may opt to provide multiple JCLs.
This may be allowed where the applicants can prove that the full liabilities will be covered at all times and that the burden of administering this arrangement will not be disproportionate.
The considerations set out in CAA10060 Individual guarantees versus comprehensive guarantees should be addressed before authorising this type of guarantee arrangement. It may be more efficient and beneficial to opt for individual or single guarantees in these circumstances as these would not require ‘solvency’ checks on all guarantors.