From 1 October 2018 Customs will have a new Act. The changes mainly affect our business customers. Find out what this may mean for your business.
Fines and penalties
Customs can impose a financial penalty on anyone who makes an entry containing an error or omission.
The Customs & Excise Act 1996 (the Act) contains provisions designed to reduce errors and omissions on entries. Anyone who makes an entry could be liable to an administrative penalty if it has certain types of errors or omissions. Administrative penalties are designed to ensure data integrity and encourage compliance, reasonable care, self-assessment and voluntary disclosure of errors.
Customs relies on those making an entry to ensure that it is correct and complete. This is important because errors and omissions can:
- cause incorrect duty payments
- result in incorrect data being used for risk management
- affect the integrity of the data on which trade and industry relies
- impact on the effectiveness of industry assistance policies at the border
- impact on the Crown’s revenue.
What happens if an error or omission is found?
If an entry contains an error or omission that causes a shortfall in duty or makes it incorrect, a penalty notice may be issued.
The notice will be given in writing to the person that made the entry. This could be the exporter, importer, licensee, and/or their agent, and/or the declarant, and/or their employer.
The penalty must be paid within 20 working days after the date of issue of the penalty notice.
What entries are subject to administrative penalties?
Entries include import and export entries, entries seeking drawback, excise entries and other documents that need to be lodged to clear low-value import and export consignments.
An entry is:
- an entry required under the Act
- every declaration, invoice, certificate, written statement, or other document required or authorised by or under the Act to be made or produced by a person making the entry
- every amendment of the entry
- For any imported goods that have been entered without an import entry being made, a document that is required to be lodged with Customs before the goods will be regarded as entered
- For any exported goods or goods that are to be exported that have been entered without an export entry being made, a document that is required to be lodged with Customs before the goods will be regarded as entered.
What happens if the penalty is not paid?
If the penalty is not paid by the due date, additional penalties are imposed.
The additional penalties are:
- 5% of the penalty if unpaid by the due date
- 2% of the penalty, including any additional penalty, if unpaid within one month after the due date,
- 2% of the penalty, including any additional penalties, if unpaid at the end of each subsequent period of a month.
Can a penalty notice be reviewed?
Yes. A request for review must be submitted in writing within 20 working days after the date of issue of the penalty notice. The request should include reasons why the penalty should be removed.
It is important to note that the applicant is still required to pay the penalty. If the outcome of the review is a decision that the penalty should not have been imposed, the full amount of the penalty paid will be refunded together with interest.
The review will be conducted by a Customs officer with the necessary delegated powers who was not responsible for issuing the penalty.
Can I appeal a Customs decision?
Yes. A person who is dissatisfied with Customs’ decision to impose a penalty, the calculation of the penalty amount, or a decision on a penalty review, may appeal to a Customs Appeal Authority within 20 working days after the decision notice is given to that person.
It is important to note that the applicant is still obliged to pay the penalty. If the outcome of the appeal is a decision that the penalty should not have been imposed, the full amount of the penalty paid will be refunded with interest.