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HMRC internal manual

Holding and Movements - Financial Securities Assurance

From
HM Revenue & Customs
Updated
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General information: What are the purposes of financial security for movement guarantees?

Financial security for intra-EU movements of duty suspended excise goods is a mandatoryrequirement under Article 15(3) of Council Directive 92/12/EEC.

The main purpose of the movement security is to identify the Principal (i.e. the personnamed on the guarantee) as one of the parties liable to pay the duty if an irregularityoccurs during a duty suspended movement. The Principal’s liability is notrestricted to the amount stated in the guarantee. The amount stated in theguarantee is merely the limit of the liability of the guarantor (i.e. the financialinstitution).

The financial security system should encourage warehouse keepers and others, to provide aguarantee for a particular movement only if they are in a position to ensure that thegoods concerned arrive at their destination (i.e. they are in control of the transportarrangements).

Consequently, the assurance effort has to be directed at Principals to movement guaranteesin order to keep track of their activities and to ensure that any irregularities areidentified, before they escalate and exceed the combined total of the guarantee cover andthe Principal’s assets.

The financial security system is flexible enough to allow compliant traders to operate. Itis not a tool to prevent diversion.