Guide Notes: documentary checks and physical examinations
Some checks on claims to preference are carried out within CHIEF (eg that particular commodities and countries are entitled to preference). Other checks which involve documentary scrutiny are listed below. The extent to which these checks are carried out should be determined locally taking into account local assessment of the risk to the revenue.
Notwithstanding this local discretion, a national profile selects certain preference entries for manual scrutiny (see IPGN3050). The checks required under this profile are as follows:
- that the preference document is valid and clearly relates to the goods
- in the case of a GSP Form A, where a tariff heading is entered in Box 8 it should agree with the declared heading on the entry. If it does not, and the entered heading is correct, follow the procedure in IPGN5400
- if the goods are listed in IPGN6050, the appropriate special statement appears on the certificate
- any evidence needed to show compliance with the transport rule has been provided and is satisfactory and
- from the evidence available, eg invoices, packing lists, there is no reason to doubt that the goods originate in the declared country.
At offices operating a manual entry processing system the following additional points will need to be covered:
- the Customs Procedure Code is compatible with a claim to preference, eg it should not cover importations where another duty relief scheme is being claimed
- the appropriate Customs Duty Rate Code is given in box 47 (ie ‘G’ for GSP, ‘A’ for other preferences) and the Country of Origin Code is given in box 34
- the classification of the goods and the entered rate of customs duty for the preference claimed is correct
- the country of origin and the country from where the goods have been consigned are correct (see IPGN5400)
- a preference document is attached to the entry (see IPGN5250), and
- the preference claimed is available, eg there has been no re-imposition of duty because a quota has been exhausted or a ceiling reached.
Selection for examination
General guidance on the selection of entries for examination is given in Import and National Clearance Hub Procedures (formally C2-3).If you are carrying out pre-clearance documentary checks you may wish to consider selecting for physical examination entries containing indications of a possible invalid claim to preference. Such indications might include:
- incomplete or amended certificates
- goods from an unlikely source, eg computers from Sierra Leone, mangos from Greenland
- surge in the volume of imports, and
- invoices or other documents indicating manufacture outside the country claiming preference. Note: If the invoice was raised elsewhere (eg Hong Kong invoice for Chinese goods) this does not necessarily imply that the goods do not qualify for preference.
Checks carried out might include checking markings on packaging, labels and individual components for indications of manufacture outside the declared country of origin.
Note: It is important to remember that for many goods, and in particular machinery and electrical goods, the use of non-originating materials and parts is permitted within certain limits. Therefore, the presence of relatively low value imported parts does not necessarily indicate that the origin rules have not been met.
You might also consider whether the goods have been correctly classified in case the true commodity code does not attract a preferential rate.
Action when entitlement to preference is in doubt
If documentary or physical examination raises a doubt about fulfilment of the origin or transport rules, enquiries should be made of the importer/agent. They must not, however, extend to requesting information direct from the preference country. If local enquiries fail to resolve the doubt, the facts must be reported to the Tariff Preference UoE. In the absence of any suspicion of fraud, the Tariff Preference UoE may advise that the goods may be released against security for customs charges pending their enquiries to establish entitlement to preference.
Verification by the Tariff Preference UoE
Under preference legislation, the overseas certifying authority is obliged to investigate any cases referred by Member States where entitlement to preference is in doubt. Such verification enquiries are carried out by the Tariff Preference UoE by correspondence. These cases can take many months to resolve. The Tariff Preference UoE will advise you when they have initiated a verification and let you know when a decision has been reached on any referrals you have made. Equally, you will be advised, together with an explanation, if the referral is not considered suitable for verification.
Action after checking entries and certificates
After checking entries and certificates:
- retain all preference documents with the local copy of the entry, and
- if the preference claim has been rejected note the reasons on the entry and complete a report if appropriate. The preference document is to be endorsed ‘rejected’ giving brief reasons and returned to the importer, agent or forwarder. The document will be required if the importer needs to obtain a valid retrospective certificate to replace the original (see IPGN5150).