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HMRC internal manual

Hydrocarbon Oils Strategy

Registered Dealers in Controlled Oils (RDCO): duty of care failings

If RDCOs fail to comply with Section 5 of Notice 192 Assurance Officers should issue them with a letter warning them that their failure to comply has rendered them liable to penalties under Section 9 of the Finance Act 1994, which will be issued unless the action you direct is taken by a certain date. Civil penalties may also be issued under Section 9 of the Finance Act 1994 if the trader fails to keep or produce any other business records in contravention of Section 118B of the Customs and Excise Management Act (CEMA) 1979 and the Revenue Traders (Accounts and Records) Regulations 1992.

If non-compliance continues you should consider issuing a penalty or penalties. For relatively minor non-compliance a single penalty may be appropriate and effective in persuading the trader to comply in future. In cases involving deliberate or persistent failures to make checks or record information about customers, where significant amounts of oil have been misused or put at risk of misuse, it may be appropriate to issue a number of civil penalties relating to individual supplies.

Where a trader continues to be non-compliant despite the imposition of penalties, this should be reported to Mineral Oil Reliefs Centre (MORC) who, in consultation with the local officer, will decide if further action should be taken such as imposing further conditions on the trader’s RDCO approval or notifying the trader that their approval may be revoked unless they comply with the scheme.

Dry brokers are also expected to exercise a duty of care by taking responsibility for ensuring measures at the depots physically supplying their sales are adequate to control deliveries.

Automated sites should not be approved unless they can demonstrate that their duty of care requirements as set out in Public Notice 192 section 5 can be fully met, which is highly unlikely.