International Trade

Scales Of Justice Are Out Of Kilter

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...was not pointed out to the importer.

At the tribunal, it was the importer’s contention that, as Customs had manually processed the first importation, it should have pointed out the error there and then. Also, no further consignments would have been ordered and imported; and, furthermore, it was unreasonable of Customs to charge £110,000 additional duty when the goods had long since been sold.

In the decision, the chairman confirmed that Customs did make an error within Article 220(2) of the Customs Code since the entries were processed manually and, therefore, were seen by Customs. However, the error Customs made ‘was reasonably detectable by a person reading the Official Journal’. This is a reference to a High Court ruling from the Honourable Justice Lightman (a few years ago now) where, effectively, he said it doesn’t matter how many mistakes the Customs authorities make, if the right answer is in the Official Journal, the importer is responsible for his own actions.

Within the world of VAT, this very harsh decision does not exist. There are a lot of cases concerning what is ‘a reasonable excuse’ and also a statement referred to as ‘The Sheldon Principle’. I have mentioned this in previous articles. In basic terms, it says that if Customs makes a decision being in full knowledge of the facts, then the trader has a defence under Sheldon. However, this applies only to VAT.

Now, in the case of Catering Services, one could say that because the importer knew he had to get the endorsements, then the error was his own fault. I don’t think it’s quite as simple as that. I think Customs has a duty of care for its ‘customers’ – as they like to call us. It could and should have provided more help to the importer. The... continued on page four >

 

 

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