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HMRC internal manual

Holding and Movements Assurance Guidance

From
HM Revenue & Customs
Updated
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Excise Movement and Control System: assurance checks: possible sanctions for non-compliance with EMCS procedures

The use of the eAD for duty-suspended movements is mandatory unless the movement is subject to a simplified procedure allowed under Part 9 of HMDP or the movement is under the manual fallback procedure. Where any duty-suspended goods are removed from the warehouse without being under an eAD the following may apply (for irregularities under manual fallback procedures see HMAG60770):

  • forfeiture of the goods (regulation 88 of HMDP refers)
  • a civil penalty (regulation 89 & Schedule 1 of HMDP refers)
  • assessment of the duty:

    • when goods leave a dutysuspension arrangement regulations 5 and 6(1)(a) of HMDP provides the duty point and regulation 8 of HMDP provides the person or persons liable to pay
    • where there is a contravention of a specified movement condition under regulation 19, regulations 19(6), 19(7) and 19(8) provide the duty point and person liable to pay)
  • consideration to revoke the consignor’s or consignee’s authorisation to occupy a warehouse under regulation 4 of the Warehousekeepers and Owners of Warehoused Goods Regulations (WOWGR) 1999, in accordance with s100G(5) of the Customs and Excise Management Act (CEMA) 1979
  • consideration to revoke a registered consignor’s, registered consignee’s and temporary registered consignee’s approval in accordance with s100G(5) CEMA 1979.

The table below shows the possible actions that may be taken for breaches of the regulations in respect of the EMCS procedures for goods received or removed under cover of an eAD.

Contravention / failure to comply Forfeiture of goods Civil penalty Assessment Revocation of approval or registration
         
Receipts: Failure to send the RoR If there has been a contravention of reg 54 or 59 (UK movements) of HMDP. Yes No. Until the movement has been discharged, no irregularity has occurred. In the first instance add conditions to the authorisation to effect compliance. For multiple instances consider revocation
Removals: Removal of the goods from warehouse or place of release to free circulation before the ARC is allocated. If there has been a contravention of reg 41(2) or 57(2) (UK movements) of HMDP. Yes Yes. The goods have left a duty suspension arrangement.  
HMDP reg 6(1)(a) applies In the first instance add conditions to the authorisation to effect compliance. For multiple instances consider revocation.          
  Failure to provide the person accompanying the movement with a copy eAD etc If there has been a contravention of reg 41(8) or 57(7) (UK movement) of HMDP No No unless it can be shown that there is no ARC to cover the movement In the first instance add conditions to the authorisation to effect compliance. For multiple instances consider revocation  

When considering a revocation of the warehouse approval, warehousekeeper’s authorisation or registered consignor, registered consignee or temporary registered consignee approval it is important to act proportionately. You should consider:

  • First offence: educate the trader by explaining what they did wrong and what they should have done. Issue a letter confirming what they should have done and record your actions on Caseflow. Is assessment action appropriate?
  • Second offence: issue a warning that a further offence may result in revocation of their approval. Is penalty action appropriate?
  • Third offence: revoking an approval but officers should consider proportionality here. For example if a trader failed to provide the person accompanying the goods with the eAD or ARC on three occasions and enquiries revealed that the goods were correctly declared on EMCS would revocation be appropriate?