Authorised Consignor – ship agents’ potential liabilities

On 1 July, 1998 modifications were made to EC procedures for Community Transit goods. These changes were made pursuant to Article 389 of Commission Regulation Number 2454/93, and will impact on the daily lives of ship agents in the European Union (The “EU”). Since 1 July, 1998 all goods moving by sea on a “non-regular” shipping service are considered by customs officers to originate from outside the EU. Ships will only qualify as “regular” if they trade exclusively between EU ports thereby remaining inside Community Customs territory. By definition most ships operating in the tramp sector will be regarded as non-regular. Unless accompanied by positive evidence of EU status, all goods carried by such ships will be assumed to have ‘third country status’. The positive evidence of EU status will normally be in the form of a T2L pre-authenticated Community status document. However, as in a number of countries (including the UK) there is a limited availability of customs officers, the requirement for the customs to stamp a T2L form after loading but prior to sailing has created practical difficulties. As a result a procedure has been adopted under which ship and forwarding agents may apply for “authorised consignor status” for the purposes of issuing pre-authenticated or self-authenticated Community status documents.

The approved consignor procedure is relatively new and it remains to be seen how customs authorities will administer it in practice. Some companies have reported that there is inconsistency in the practices in different ports within, as well as between, different EU states.

Liability Implications for Agents

The obvious problem for ship agents in acting as an authorised consignor is that if the goods for which the status document is issued subsequently prove to be non-Community goods they may acquire a liability to customs on the basis that goods liable to import duties had been unlawfully introduced into the EU. The liability will apply to agents if they fall within the provisions of Article 202(3) as:-

‘Any persons who acquired or held the goods in question and who were aware or should reasonably have been aware at the time of acquiring or receiving the goods that they had been introduced unlawfully’.

The fact that the approved consignor was acting as an agent will not in itself necessarily mean that he is relieved from all responsibility to customs if he was aware, or should reasonably have been aware, at the time of acquiring or receiving the goods, that they had been introduced unlawfully. An agent cannot simply choose to rely upon his principals’ instructions despite evidence suggesting they are untrue or inaccurate.

If the agent has obtained a written confirmation from his principal that the goods are in free circulation that would secure his right to claim reimbursement from the principal if the agent is issued with a post clearance demand from customs. It will not, however, prevent the agent from being held responsible to customs in the first instance. In practice the Club would advise agents in the EU to not only obtain written confirmation that the goods are in free circulation but also to obtain an indemnity from the cargo interests. The wording of such an indemnity is reproduced below:-

‘We, ...(name of exporter)... hereby appoint you as our direct representative for Customs purposes and confirm that the goods described hereunder are in free circulation in the European Community, which qualifies them for T2L status:- In consideration of your issuing pre-authenticated documents, or authenticating community status documents for Customs purposes on our behalf, we hereby agree to hold you harmless and indemnify you for any duties, taxes, import levies, deposits, costs (including legal costs), or other amounts which become payable by you as a result of your activities on our behalf.’

Although this wording will assist, approved consignors must remember that this letter is only as good as the person providing it, while in some jurisdictions the courts may not enforce such indemnities.

‘Any persons who acquired or held the goods in question and who were aware or should reasonably have been aware at the time of acquiring or receiving the goods that they had been introduced unlawfully [into the EU]’.