8. Contraventions and Civil Penalties (CPs)
Explains where civil penalties apply and actions for contraventions to the Customs Transit Convention (CTC).
Under CTC agreements Customs are obliged to promote compliance with CTC provisions and to have arrangements in place to tackle non-compliance. Civil penalties operate in VAT and excise, as well as in direct taxation, and are seen as an appropriate sanction in most customs cases.
Civil penalty provisions cover:
- civil evasion - offences involving dishonesty
- contravention of the law – such as breaches of regulations, failure to comply with the conditions of an authorisation and mis-declaration
The civil penalty provisions cover all CTC, EU and UK customs law except:
- TIR and ATA Carnets
- prohibitions and restrictions
- smuggled goods subject to excise duty
- trade with the Channel Islands
When free circulation goods and goods originating in the Channel Islands move to the UK, import VAT should be declared and paid. The civil penalty provisions do cover any contraventions regarding import VAT declarations on such movements.
The civil penalty provisions cover customs duty (including agricultural duties) and import VAT but not excise duty.
Voluntary compliance can be encouraged, via education or amendment/withdrawal of authorisations. Civil penalties including civil penalty warning letters are an additional method of dealing with non-compliance.
Customs are very unlikely to issue penalties where a trader voluntarily discloses a contravention.
Borders & Trade Group recommends that trader education is more appropriate than civil penalty action in the case of a first contravention of the Transit regulations. The person concerned should receive an educational letter or visit from a compliance officer advising that a contravention has occurred and setting out the action that needs to be taken to improve compliance with the regulations. Civil penalties may then be appropriate if the person concerned continues to repeat the contravention despite a previous educational letter or visit.
Information about roles and responsibilities can be found in Customs Civil Penalties.
Further information on civil penalties can be found in Gov.uk guidance for Civil Penalties.
If staff at offices of destination or officers on audit visits to traders’ premises find that a particular foreign holder of the procedure or haulage company is regularly non-compliant, they will advise the Transit Coordinator within Borders & Trade Group who will then write to the appropriate overseas customs authority.