What risks does my international business face if I am not 'customs compliant'?

Companies that operate internationally are often unaware of the risks associated with import and export activities. They usually use an external customs representative to complete customs formalities – and they rarely consider the fact that, as importers or exporters, they remain liable if, for example, incorrect data is declared. 

It is impossible to underestimate the risks for companies that do not follow the rules or are not compliant. In addition to the post-clearance recovery of import duties and import VAT and the imposition of the usual fines, employees and management can also face criminal prosecution. In addition, customs may subject businesses to tighter controls and more frequent inspections of goods – which, in turn, can cause delays in the supply chain. 

To avoid these risks, companies need to look beyond merely fulfilling customs formalities. A company's customs value chain is much broader than that. Everything hinges on providing the customs representative with correct information on the classification, origin and customs value of goods. This requires the right expertise and well-developed procedures to ensure a good flow of data between the departments involved within the company: purchasing, sales, finance and logistics.

Risks can also be mitigated in the post-declaration phase – for example, by setting up a procedure to check submitted customs declarations and keeping an incident register. In short, the indispensable ingredients for an (cost-)effective customs compliance approach are:

  • the proper flow of data;
  • properly trained employees;
  • mapping the risks. 

A convenient customs checklist: 

  • Classification of goods in the customs tariff (import and export)
  • Payment of import duties, calculation of customs value, delivery conditions and INCOTERMS
  • Tariff preferences, origin of goods
  • Compliance with export legislation
  • Export licence management and export control
  • Customs declarations and applications for simplified customs procedures for simplified processing
  • Reporting requirements for imports and exports, INTRASTAT declarations
  • Selection and training of external service providers (e.g., freight forwarders)
  • Selection and training of internal service providers/employees

Want to know more? 

Get in touch with the experts of our Customs team.