Case 4 Cargo Liability - Customs Fine

Case 4 Cargo Liability - Customs Fine

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.

Staff Author

TT Club