A Transport Operator member of the Club was asked by a new client to arrange customs clearance of goods. The client asked the member to establish the correct rate of import duty to be paid on the merchandise. The member consulted his copy of the customs tariff and told the client that the rate would be 10%, with a further 15% in sales tax.
When the consignments arrived, the member declared them under that tariff heading and duty and tax were calculated and paid accordingly.
Eighteen months after the first consignments had arrived, a customs officer inspected one of the consignments and decided that they had been misdeclared: the duty rate should have been 12.5%. The customs authority agreed with the officer, and submitted a demand for the additional 2.5% duty and a corresponding amount of extra sales tax, on all previous consignments. The importer refused to pay the additional amount, saying that he had relied on the professionalism of the "customs expert" in the member's office to advise him correctly.
Lawyers advised the Club that the customs authorities were within their rights to make a claim for all the previous consignments and that the member had very little defence. It would also be difficult to pursue the client for the extra money, on precisely the grounds that the client had set out.
This briefing considers the potential impact on ocean freight and supply chain management activities of freight forwarders and logistics operators should steps to curtail the spread of coronavirus continue to disrupt the movement of goods. While key concerns will distil to delays and potentially cargo deterioration, the following provides some guidance on the potential risks to freight operators and how to mitigate them.
TT Club and its partner in Russia, the CIS countries and Baltics, Panditrans celebrate both TT Club's 50th anniversary and their twenty-five year partnership in providing a unique insurance and risk management service to the freight industry. TT Club insureds, both within the territory and those trading with the region, have enjoyed tailored extensive cover and accurate trusted advice on the special characteristics of this particular transport environment.
Counterfeit products put the health and safety of consumers worldwide at risk whilst depriving governments, businesses and communities of tax revenues, profits and legitimate jobs.
The logistics world is fraught with potential risks, and claims are perhaps inevitable. The exposure to such claims can be minimised, however, by maintaining a robust risk mitigation policy. Risk mitigation extends not only to the physical steps taken to improve operational safety and security, but also to ensuring, from the outset, that adequate contractual protections are in place.
