Dutch Customs is the supervisory authority on inbound and outbound flows of goods. It can apply control measures it deems necessary for the correct application of (customs) laws and regulations. As an entrepreneur, you may have to deal with such controls, especially if you import or export goods.
For example, the acceptance check is carried out by default on all customs declarations. It is then checked whether the declaration meets the formal requirements set.
But sometimes you may have to deal with another check. Then the declaration is compared with the goods. This can be done before release of the goods or after release of the goods. With this, Customs checks whether the declarant's assertions are (substantively) correct.
Verification
A common example in practice of the checks that can be carried out is verification. This is a substantive check on the accuracy of the declaration. The details of the declaration and written documents are compared with the goods. Customs can check those goods and take samples of them to conduct investigations.
In that context, various things can be checked. Consider the declaration itself, the required supporting documents, other documents and the goods.
The results of the verification are decisive for, among other things, the customs debt and/or the authorisation because those results serve as a basis for applying the customs procedure.
Verification can also affect the option of post-clearance recovery. Post-clearance recovery takes place when, according to Customs, it is subsequently found that too little import or export duty has been paid. The declaration can then no longer be amended because the verification has already ended.
In practice, post-clearance recovery often has unpleasant consequences for entrepreneurs, especially when there are disagreements on the classification of the goods under a certain commodity code or on the actual value of the goods compared to the declared value. Apart from the unfavourable consequence of the post-clearance recovery itself, entrepreneurs sometimes have to start paying higher import duties after the verification is terminated because the goods have been classified under a different, more unfavourable code from then on, for example. It also sometimes happens that the classified goods code on the basis of several verifications is changed more frequently by Customs within a relatively short period of time because there are different views internally.
Physical verification
The concept of verification also includes the power of physical inspection. If Customs wants to carry out a physical check but the declared goods are not present as a result of which the check cannot be started within the time limit set by Customs, the declaration may automatically be invalidated. This can be annoying for the declarant, especially if his customers do not pay invoices, for example, because this means they do not receive the goods they ordered (on time). In principle, it is therefore advisable to at least have the goods present in case Customs wants to carry out a physical inspection.
By means of a physical inspection, you can determine whether the data on the goods in the declaration match the characteristics of the goods. Depending on the fiscal and/or non-fiscal risks, you determine which data you check. Those risks have already been determined in advance through risk analysis.
In principle, the physical check is performed on all goods declared in the declaration. However, the control can be limited to a part of the goods declared. The results of the physical inspection of part of the goods are then applicable to all the goods in the declaration.
Customs shall inform the declarant that and which goods undergo physical inspection and whether it will take a sample of them. The declarant cannot oppose this decision. However, he does have the right to be present during the physical check. The physical inspection takes place at a location determined by Customs and it also determines the time at which the control will take place. The declarant can request to deviate from this. The costs of the deviation shall then be borne by the declarant.
Conclusion
As can be seen, verification of the customs declaration and physical inspections can affect the goods code to be applied at import or export and the possibilities of post-clearance recovery, among others. Customs' termination of verification and release of the goods also does not always happen within a reasonable timeframe. Therefore, it is wise to be prepared and/or prepared for the consequences of verification and physical inspection by, for example, applying for Binding Tariff Information (BTI) to obtain certainty about the applicable commodity code for certain goods. Thereby - depending on the case - there are other precautions you can take.
Want to know more?
Do you have questions regarding customs inspections and legal options in such cases? If so, please contact attorney John Wolfs, who has built up expertise in customs law, among other areas.
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