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HMRC internal manual

Customs Freight Simplified Procedures

Introduction to authorisation: general pre-authorisation criteria and conditions

To be eligible for CFSP, traders must satisfy all of the following general criteria as well as the criteria for the type of CFSP used.

They must provide evidence that they comply with:

 UCC Art 39 (a) (b) & (d) for EIDR

  UCC Art 39 (a) for SDP

  1. The absence of any serious infringement or repeated infringements of Customs legislation and taxation rules, including no record of serious criminal offences relating to the economic activity of the applicant

 

  1. The demonstration by the applicant of a high level of control of his or her operations and the flow of the goods, by means of a system of managing commercial and, where appropriate, transport records, which allows the appropriate customs controls

(d)with regard to the authorisation, have practical standards of competence or professional qualifications directly related to the activity carried out.

  • hold an Economic Operator Registration and Identification (EORI) number
  • be an established legal entity in the EU - eg Sole Proprietor, Partnership, Public Limited Company, Private Limited Company
  • have a good record of compliance with other Customs related requirements eg INTRASTAT submissions, VAT returns, deferment etc
  • maintain a set of documented procedures that accurately describe:

 

  •  
    • the structure and internal controls of the business
    • how the audit trail is maintained
    • the back up, recovery, fallback, archiving and retrieval of business and customs records
    • the security and archiving of documentation
    • the procedures for the making of customs declarations, the use of customs agents and the flow of goods
    • how irregularities and errors are identified and actioned

 

  • maintain a system in support of the records kept that:

 

  •  
    • establishes their relationship to the declarations made
    • is sufficient to enable Customs to carry out effective checks on compliance with import prohibitions or restrictions or any other provisions governing release to free circulation, or other customs procedure, of goods covered by the authorisation

 

  • regularly declare goods
  • have access to an electronic reporting system and
  • provide security for their customs duty and other tax liabilities.

Traders will also be required to satisfy all of the following conditions. They must:

  • declare only eligible goods
  • specify the goods to be covered by the authorisation
  • ensure that there is a sufficient level of guarantee to cover payment of import duties/VAT on all transactions (ie all CFSP and non-CFSP consignments)
  • allocate a DUCR to each import (or Customs Warehouse removal) which can be used to trace the consignment through their records, providing a full robust audit trail
  • hold authorisations for other procedures such as IP, OPR, Customs Warehousing etc which they wish to use in conjunction with CFSP
  • hold and maintain a set of commercial records for the goods declared via these procedures as specified in the Customs Traders (Accounts and Records) Regulations 1995, SI 1995/1203
  • notify customs of any changes to the business that would impact on their authorisation, eg:

 

  •  
    • change of business or trading name
    • change of premises
    • significant alterations to the business pattern eg changes to the type of goods or the processing or storage procedures, change of Direct Representative, etc
    • change of deferment account
    • significant changes to the record keeping systems eg computer hardware or software, or the route by which they submit the declarations

 

  • keep an archive of all declarations and supporting evidence for four years after the date of their submission and make this available to Customs on request (other legislation eg VAT, Excise or Company taxation may specify that this information must be kept for longer periods)
  • allow Customs to audit their system when requested
  • comply with all the relevant provisions as laid down in EU and UK customs legislation, and all relevant requirements imposed by Customs which are set out in official Notices or other official publications
  • submit to Customs valid SDs within the required time limit in the manner and format specified and
  • submit a FSD in the manner and format specified to Customs at the end of each period declaring the number of SDs that were transmitted during the period. Nil returns are required.

Before authorising the trader, you must ensure that they are aware of all of the conditions and criteria of authorisation and of their customs obligations.