Penalty notice: considering whether to issue a penalty notice: establishing who is to be penalised
You should identify the legal entity responsible for the contravention to decide who is to be penalised.
It may be the trader, in which case you need to decide to whom within the trader’s organisation you should address a penalty notice to. But an agent may be responsible for a contravention, whether they are representing a trader directly or indirectly, see CCPG11120. If so the penalty notice should be addressed to the agent.
In some instances an agent may delegate the making of a declaration to a sub-agent, either in a direct or indirect capacity. If so you should address the penalty notice to the sub-agent.
It is also possible that a third party may purport to act as an agent, but there is no evidence that they are empowered to do so, see CCPG11120. If so, it is only the third party who can be liable to a penalty and the penalty notice should be addressed to them.
The guidance below discusses who should be penalised in specific circumstances where contraventions of Customs law have been identified.
Where there is an incorrect declaration
The person who made the declaration is normally responsible for the contravention. Often this will be an agent acting either directly or indirectly on behalf of the trader.
However, where the incorrect declaration is caused by a trader providing inaccurate or incomplete instructions to the agent, it is the trader who is responsible.
You must consider the facts of each case on its merits. You should bear in mind that Customs agents provide a recognised specialist service and should have a good understanding of customs law and procedures.
There are occasions where it should be obvious to the agent that the client’s instructions conflict with the law. In such cases the agent cannot rely on the protection normally afforded him by client instructions.
Where the conditions of an authorisation have been infringed
The authorisation holder is responsible for ensuring that the conditions of the authorisation are met. Where there is a contravention, the authorisation holder will normally be liable to be penalised. This will include where the contravention is caused by an employee acting on behalf of the authorisation holder.
In some cases, an authorisation holder may engage a third party, such as a haulage contractor, to act on their behalf. The responsibility is still with the authorisation holder in such cases. They should take care to ensure that the third party is aware of their obligations and complies with them. The only time penalty action should be considered against the third party would be where the third party has clearly acted outside the terms under which they were engaged. In such circumstances the authorisation holder could not reasonably have been expected to have stopped this happening - for example where goods have been irregularly removed from temporary storage. While penalty action may also be considered against the authorisation holder, in such circumstances it may well be that they have a reasonable excuse, see CCPG11700.
Where the trader is non UK based/registered
Customs Civil Penalties apply to entities that have committed contraventions in the UK. It is possible that such entities may be based outside the UK, in which case the issue is the practical one of getting them to pay any penalty due. We now have working agreements through Mutual Assistance whereby if we levy a penalty to a trader in a country within the EU and they fail to pay it, our Customs counterparts within that country will collect the debt on our behalf.
If it is considered worthwhile in the interest of increasing compliance, the penalty notice should be issued ‘care of’ the representative in the UK. It would only be permissible to address the penalty notice to the representative if the representative would be liable to a penalty as specified in the penalties schedule.
Where a company is located on a single site
In the case of single site companies, the penalty notice should be addressed to the Company Secretary, or a person of equivalent status at Director Level if the position of Company Secretary is not held.
Where a company is located on more than one site
Many national companies (including freight agents) have offices all over the country. We may find that we have problems with one or several of these offices. In such cases, if the Company Secretary is located at the site at which the contravention occurred, the penalty is on the company and the penalty notice should be addressed to that individual. If the Company Secretary is not located there, it should be addressed to the relevant person at the highest possible level, that is, Director Level or overall Site Manager Level. A copy should then be sent to the Company Secretary at the company’s principal place of business.
Remember if this is a national company, HMRC may have allocated it a Customer Relationship Manager (CRM) and you must obtain the CRM’s agreement before issuing any penalty.