Customs

Many importers and exporters choose to have their customs formalities taken care of by customs agent. The options therefore are direct or indirect representation. The most common form of representation is direct representation, in which the customs agent acts in the name and on behalf of his principal. In the event of indirect representation, the customs agent acts in his own name, however for the account of his principal. 

The principal grants the customs agent a power of attorney to have him execute the customs formalities on his behalf. The model agreement ‘authorisation to act as a direct representative’ by FENEX and evofenedex is often used for this purpose. This model is considered the standard model by customs  agent, principals and the Customs Authorities. It is important to note that in this agreement, the FENEX conditions are declared applicable to the relationship between the customs agent and his principal. These FENEX conditions are commonly applied in the branch and protect the customs agent against unreasonably big liability risks resulting from executing customs formalities; in principle, the liability is limited to 10.000 SDR, approximately EUR 12,500. 

In the event that the customs agent acts as a direct representative, his principal, rather than him, is considered the declarant. This is important, because any additional taxes will be addressed to the principal and not to the customs agent. This does however not mean that the customs agent is free of risks. Most customs agents maintain a continuous customs guarantee or current account. During the period that a declaration has the status ‘pending verification’, the customs agent’s guarantee is used as security for the customs debt.

This may, in some cases, lead to big financial risks for the customs agent. For instance in the event that solar panels, which have been reported to having been produced in Malaysia, turn out to have been produced in China. The Customs Authorities may, in such case, impose considerable anti-dumping duties, which, if Customs Authorities have not yet completed the customs entry, may be claimed from the customs agent’s guarantee. In some cases, in the meantime, the principal may have disappeared or gone bankrupt, which leaves the involved goods as the only means of recovery for the customs agent.

If the customs agent still possesses the goods, he can claim on the basis of a lien. The FENEX conditions allow that possibility.

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