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HMRC internal manual

Customs Freight Simplified Procedures

Audit and assurance: CFSP risks areas

There are various risk areas that need to be addressed in a CFSP audit. Details of the different areas to be considered are provided in CFSP21100. Not every risk area will apply to every trader and officers should be selective in their audit activity and ensure that only the relevant areas for each specific trader are covered.

Risks relating to all CFSP operations 
Temporary storage (TS) 
Direct representatives 
Indirect representatives 
Trader’s records 
Ineligible goods 
Remote sites 
Anti-smuggling Nets (ASN)

Risks relating to all CFSP operations

  • trader uses CPCs/regimes they are not approved for
  • lack of audit trail
  • poor/inadequate archiving of data
  • duty deferment guarantee level exceeded
  • traders financial situation becomes insufficient to fulfil customs obligations
  • manipulation of tax point (eg entry into records on wrong date, false date on supplementary declaration (SDI/SDW))
  • lack of communication between multi sited traders and/or control offices/officers
  • decision to route goods in/out of CFSP based on inadequate/incomplete information
  • entries prepared on the basis of ‘pre-alert’ information from place of dispatch, but consignments subsequently re-routed and/or split to arrive at different locations, under different master details
  • poor standard of manifesting to individual bags/consolidations/flights

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Simplified Frontier Declarations

  • failure to enter goods at frontier, to SDP SFD or C21 for EIDR, incorrect EORI or DUCR declared on frontier SFD
  • incorrect entry reference and/or date
  • failure to present necessary supporting documents to the National Clearance Hub for controlled goods (BIS licences -firearms/radioactive material, Defra licences (CITES), conformity, Home Office (drugs) licences, HSE certificates etc.
  • controlled goods declared to EIDR at the frontier
  • terms such as ‘various’ used to as description of goods
  • failure to hold and endorse supporting documents not required at frontier (preference certificates, original DPO, DoTI licences).

Supplementary Declarations

  • failure to submit SD (not required for goods entering CW from 3rd May 2016)
  • failure to submit amended SDs when error messages received
  • SD(s) don’t cover all goods on SFD
  • incorrect DUCR(s) declared on SDIs
  • failure to declare previous document reference in box 40
  • SD only reports first line of a multi-line invoice
  • incorrect Commodity Code, CPCs, values, freight etc declared on SD
  • SD submitted with incorrect tax point
  • late submission of SDs therefore money not accounted for in correct deferment period
  • failure to notify CNAT at Leeds of late declarations
  • failure to report errors identified after submission of SD.

Final Supplementary Declarations

  • failure to submit monthly FSD
  • late submission of monthly FSD
  • deliberate deletion from system of control messages that are un-cleared at month end, in order to allow FSD to be sent (some software will not send FSD when un-cleared SDs are present).

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  • Inadequate provision of security for Duty ie invalid/exceeded DAN, DAN provided as security does not belong to authorised CFSP trader, and likewise for CCG.
  • Security provided against approval is insufficient ie amount provided is not high enough, poor compliance with Duty Deferment rules, CCG rules, frequently rejected direct debits, etc.
  • Where an IR is using a customer’s deferment/CCG for both payment and security the deferment/CCG must be sufficient to cover that customer’s CFSP liabilities. The IR and their customer are sent letters of authority for this purpose (copy of client’s authority on CFSP UoE Internet web page). The customer must have signed the declaration which gives Customs permission to access their deferment/CCG for security.
  • Unauthorised use of importers’ deferment accounts/CCG.
  • Use of an importer’s deferment account/CCG which has been inhibited by DMB Banking Southend, leading to the SD failing to secure/collect revenue.

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Entry into Customs Warehouse

  • incorrect warehouse approval number quoted
  • goods not intended for warehousing declared on SFD
  • goods not delivered to customs warehouse ie diverted on route

Removal from Customs Warehouse

  • unrecorded removals
  • stock records not updated promptly (Friday picks entered to records on Monday or delayed until lorry fully loaded and ready to depart)
  • Failure to submit SDW (Warehouse removal warrant)
  • failure to submit SDW caused specifically by Warehouse-keeper assuming owner has submitted SDW, while owner assumes that Warehouse-keeper has
  • failure to make prior notification of removals if required to do so
  • failure to comply with any dwell/standing time
  • release to free circulation without possession of necessary supporting documents
  • incorrect values applied at removal
  • incorrect box 2 consignor data recorded on SDW (warehouse keeper instead of third country exporter).

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  • trader does not hold NCT Authorised Consignee authorisation
  • trader does not comply with conditions of NCTs authorisation
  • trader does not hold NCTs comprehensive guarantee/guarantee waiver
  • trader exceeds NCTs comprehensive guarantee reference amount
  • trader does not hold or provide valid/adequate individual guarantee
  • trader releases high risk (IP Annexe 44c) goods using a 0% guarantee
  • trader releases controlled/restricted/excise goods using EIDR (not allowable)
  • goods released from frontier without border admissibility controls taking place
  • goods ‘escape’ from frontier without NCTs being initiated
  • diversion of goods between frontier and designated premises (all or part of consignment)
  • substitution of goods between frontier and designated premises (all or part of consignment)
  • NCTs movements not effectively ended by the trader
  • excesses and shortages (over and under-shipments) not recorded
  • no account taken of goods on receipt (so over and under-shipments not detected)
  • trader exceeds three working day rule for movement from air/port to inland premises.’

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Temporary storage (TS)

  • use of unauthorised premises to store goods
  • manipulation of TS period (or maximum period of 20 days exceeded without permission) (under UCC maxmum period extended to 90 days)
  • disallowed process whilst goods held in TS (goods must remain in an unaltered state)
  • splitting/part removal of consignments
  • transfer of un-cleared goods to premises
  • transfer of goods between designated premises - failure to use the NCTS and comply with TS requirements
  • weak/non-existent controls on pilferage
  • failure to make prior notification of removals if required to do so
  • failure to comply with any dwell/standing time
  • entry/removals from TS not recorded
  • entry/removals from TS recorded late.

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Direct representatives

  • failure of authorised trader to have documented procedures in place to ensure that the DR is submitting data to Customs that is timely, accurate and complete thus enabling the conditions of authorisation to be met
  • DR fails to report the DUCR
  • DR uses wrong deferment number or EORI number or inappropriate use of consignee code ‘GBPR’
  • DR uses incorrect representation on declaration (direct/indirect)
  • loss of data between authorised trader and service provider
  • supporting documents held by neither trader
  • audit trail held by neither trader.

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Indirect representatives

  • IR originally set up with their own badge who later also goes on to act as a DR, may be sending authorised customers declarations to incorrect CFSP EPU if using their own badge to send declaration whilst showing their EORI in box 14.
  • Declarant is unlikely to follow up discrepancies between invoices and initial information from consignor (particular risk for valuation and classification). Commercial pressure to maximise number of entries per hour may lead to sloppy standard of entry preparation.
  • Insufficient audit trail/reconciliation of individual consignments released under bulk SFD, particularly where Courier / Fast Parcel consolidated shipments are carried as conventional cargo and SFD relates to shipment through different frontier CSP system.

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Trader’s records

Data accuracy

  • incomplete or inaccurate data capture
  • corruption of data during transmission
  • poor standing data maintenance
  • error messages not actioned
  • inappropriate use of tax override codes
  • preference claimed but no evidence of entitlement held
  • preference claimed but evidence of entitlement not held at time goods released to free circulation
  • preference documents not endorsed correctly (thus facilitating duplicate use)
  • where a preference document also acts as a proof of origin statement, the preference document is not valid on the date of entry of the SFD
  • wrong document code and status used to declare licence
  • inappropriate use of an open general license (LIC99)
  • import licence required, but not held*
  • import licence required, but not held at time goods released *
  • import licence insufficient *
  • import licence not attributed correctly *

*For ‘e’ licences, CHIEF should reject SDs therefore check that SD’s not left ‘outstanding’

  • inaccurate rules tables
  • declarant is dependent on consignor or consignee for the accuracy of key data, including value, description/classification and origin
  • declarant fails to contact importer for correct data, due to commercial, contractual delivery pressures (increases risk of incorrect/ineligible CPCs can also produce unnecessary repayment/complaint file action).

Data completeness

  • receipt discrepancies not identified or accounted for (over and under-shipments)
  • inaccurate DUCR maintenance
  • inaccurate recording of box 40 ‘previous document’.

Data transmission

  • high volume of transactions may crash system
  • no backup procedure if messaging fails.


  • inaccurate classification provided by consignor or consignee
  • inaccurate classification by declarant (irrespective of quality of information provided by consignor or consignee)
  • inaccurate information about goods provided by consignor or consignee, leading to incorrect classification by declarant
  • failure to classify as instructed by consignor or consignee
  • client pressure to mis-classify in order to gain a duty rate or import licence advantage
  • goods mis-described as documents, thus obtaining a low duty rate and/or value
  • commercial pressure to maximise number of entries per hour may lead to sloppy standard of classification, with over reliance on ‘other’ categories
  • inadequate training of staff in classification.


  • incorrect build up of valuation including air transport costs
  • CIF declared when FOB - freight and Insurance omitted.

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  • data aggregated incorrectly, ie information at header and item level differs
  • data aggregated across tax points without prior authorisation
  • data aggregated across licences
  • data aggregated in contravention of (ADD) rules
  • data aggregated over period and rates of exchange, quotas or duty/preference rates have changed
  • data aggregated for a period greater than ten days or a message size of 3mb
  • box 2 ‘‘consignor’ data aggregated wrongly.

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Ineligible goods

  • CFSP used for disallowed (CFSP ineligible) goods or CPCs
  • failure to operate re-nomination procedures properly
  • if trader’s systems default goods into rather than out of CFSP, the risk of ineligible goods being entered is greater
  • poor maintenance of customer data files, leading to ineligible goods/CPCs being routed into CFSP.

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Remote sites

Poor data capture, and possible non-compliance with conditions of approval and EU law, caused by:

  • staff/management at remote site do not understand implications/legal requirements/obligations
  • weak management controls
  • CFSP has low priority, if it is a small part of work content
  • use of sub-contractors
  • poor communications between sites
  • weak local systems for ensuring completeness of data capture.

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Anti-smuggling Nets (ASN)

  • failure to provide ASN when required
  • use of bulk SFDs when no ASN in place.