ANNEX G.2.
concerning the relationship
between Customs authorities and third parties
Entered into force: 28 January 1984
April 1981
TABLE OF CONTENTS
I. Text and Commentary
- Introduction 5
- Definitions 6
- Principles (provisions 1 - 4) 6
- Provisions relating to all third parties:
a) Authorisation, rights and liability of third parties
(provisions 5 - 7) 8
b) Retention of records and papers (provisions 8 - 10) 9
c) Security (provisions 11 - 12) 10
d) Refusal by the Customs to transact business
with a third party (provisions 13 - 17) 11
- Special provisions concerning Customs clearing agents
(provisions 18 - 21) 12
- Information concerning the relationship between
Customs authorities and third parties (provision 22) 14
II. Entry into force
- Contracting Parties having accepted the Annex 15
III. Reservations
- Contracting Parties having entered reservations 17
- Reservations entered (in alphabetical order of Contracting Parties)
IV. Alphabetical Index
V. Provisions studied in detail and reproduced in Volume IV
I.-TEXT AND COMMENTARY *
* This Annex was adopted by the Permanent Technical Committee at its
101st/102nd Sessions in December 1978 and was approved by the Council
at its 53rd/54th Sessions held in Canberra in May 1979. It entered
into force on 28 January 1984.
Introduction
In connection with the fulfilment of Customs formalities required
under the law for the importation, exportation, movement and storage
of goods, the Customs authorities may deal either directly with the
persons concerned or with third parties designated by them.
The types of control exercised by Customs authorities over third
parties vary according to country and according to category of third
parties. In some countries certain types of third parties are subject
to examination and licensing while in other countries no explicitly
stated controls exist.
This Annex is generally concerned with third parties who are in direct
contact with the Customs in connection with the importation,
exportation, movement and storage of goods for and on behalf of the
person concerned. It relates primarily to those third parties who are
responsible for arranging for the clearance of goods (1). The Annex
specifically includes Customs clearing agents but also relates to
other third parties who perform clearance functions for and on behalf
of persons concerned even though that is not their major business (for
example, a carrier or freight forwarder who clears goods through
Customs as an incidental part of his main functions). On the other
hand, this Annex also relates to third parties who are not involved in
the clearance of goods but who otherwise intervene in the movement and
storage of goods which are still under Customs control (for example,
those operating carting or similar services for goods under Customs
control).
This Annex does not apply to those third parties who are only
responsible for the financial and insurance arrangements of a goods
transaction.
COMMENTARY
(1) There are normally three possible situations relating to a person
clearing goods through Customs, namely:
(a) a person clearing goods in his own name and for his own account;
(b) a person clearing goods in his own name for the account of
someone else;
(c) a person clearing goods in the name and for the account of
someone else.
Definitions
For the purposes of this Annex:
(a) the term " person " means both natural and legal persons, unless
the context otherwise requires;
(b) the term " third party " means any person who deals directly with
the Customs, for and on behalf of another person, in connection with
the importation, exportation, movement or storage of goods (1);
(c) the term " Customs clearing agent " means any third party who
carries on the business of arranging for the Customs clearance of
goods;
(d) the term " clearance " means the accomplishment of formalities
necessary to allow goods to be exported, to enter for home use or to
be placed under another Customs procedure;
(e) the term " security " means that which ensures to the
satisfaction of the Customs that an obligation to the Customs will be
fulfilled. Security is described as " general " when it ensures that
the obligations arising from several operations will be fulfilled.
COMMENTARY
(1) Employees of companies which are parties directly concerned with
the ultimate disposition of goods in an international goods
transaction are not considered to be third parties under the terms of
this Annex. Thus, for example, the export manager of a company who
clears goods through Customs for that company would not be considered
a third party.
Principles
1. Standard
The relationship between Customs authorities and third parties shall
be governed by the provisions of this Annex (1).
COMMENTARY
(1) There is no obligation on States to accept all the provisions of
the Annex and reservations in respect of any Standards and
Recommended Practices that they are not in a position to apply may be
entered (see Article 5 of the Convention).
Customs authorities may grant facilities greater than those
provided for in the Annex. The granting of such greater facilities is
recommended in Article 2 of the Convention.
2. Standard
National legislation (1)(2) shall set out the conditions under which a
person may act for and on behalf of another person in the latter's
dealings with the Customs.
COMMENTARY
(1) See commentary on Article 3 of the Convention.
(2) The term " national legislation " is broad enough to apply to
situations where third parties are acting in accordance with common
rules under national law.
3. Standard
Persons concerned (1)(2) shall have the choice of transacting business
with the Customs either directly or by designating any person to act
as third party.
Note The person acting as third party may be a person not normally
engaged in dealing with the Customs on behalf of others or a person
who normally deals with the Customs as his main business or as part of
his main business.
COMMENTARY
(1) The term " person concerned " refers to those persons on whose
behalf the third party is transacting business with the Customs. Thus
the " person concerned " may be the seller or buyer, consignor or
consignee, etc. depending on the particular transaction.
(2) In a goods transaction the " person concerned " in that
transaction with the Customs need not necessarily be the owner of the
goods.
4. Standard
Customs transactions where the person concerned elects to do business
on his own account shall not be treated less favourably
or be subject to more stringent requirements than those Customs
transactions which are handled for the person concerned by a third
party (1).
COMMENTARY
(1) The aim of this provision is to prevent discrimination against
the person concerned if he elects to deal directly with the Customs
rather than using the services of a third party. If all other things
are equal, the treatment given should normally be identical. The
Standard does not state, however that a transaction has to be treated
in exactly the same way whether it is handled by the person concerned
himself or by a third party. Differences in Customs treatment are
justified for a variety of practical reasons and the Customs
authorities are free to accord different treatment provided that this
does not constitute less favourable treatment or more stringent
requirements for the person concerned because he chooses to deal
directly with the Customs. Thus, for example, countries which grant
deferred payment facilities to third parties who regularly clear goods
would not necessarily be in violation of the Standard simply because
they are not prepared to grant such facilities to persons who do not
regularly clear goods.
Provisions relating to all third parties
[a)] Authorisation, rights and liability of third parties
5. Standard
Where Customs authorities deem necessary, third parties shall be
required to produce proof of their right to transact business with the
Customs for and on behalf of another person.
Note The proof to be produced normally consists of a document which
gives authority to the third party to transact business with Customs
for and on behalf of another person. In some countries this proof may
even be the possession of the goods or evidence thereof.
6. Standard
A person designated as third party shall have the same rights as the
person who designated him in those matters related to transacting
business with the Customs (1).
COMMENTARY
(1) This Standard refers to the rights of the third party (e.g.
pursuing appeals to Customs and through the courts) rather than to the
treatment of the person concerned, which was addressed in Standard 4.
7. Standard
National legislation shall lay down the liability of third parties
before the Customs for any duties and taxes, as well as for any
irregularities and any consequent penalties or fines.
Note In some countries, persons concerned and third parties may be
held jointly and severally responsible before the Customs for duties
and taxes. This joint and several responsibility may also apply to any
irregularities and any consequent penalties or fines.
[b)] Retention of records and papers
8. Recommended Practice
Customs authorities should require that third parties retain, for
audit and inspection, only those records and papers which are
necessary to ensure that third parties have carried out their
functions in a legal and responsible manner.
9. Recommended Practice
Customs authorities should not require third parties to retain records
and papers required for audit and inspection for a period longer than
persons concerned are themselves required to keep such records and
papers (1).
Note The required period of time is normally not longer than five
years (2).
COMMENTARY
(1) This provision is primarily intended to address those third
parties who carry out more than a single transaction with the Customs.
Third parties conducting a large amount of business with Customs
frequently have practical difficulties because of the length of time
which records must be retained. The provision requires that these time
requirements should in no case be more onerous for third parties than they
are for persons concerned.
(2) The suggestion of a five-year limit is facilitation oriented and
is intended to provide guidance for countries bringing their
legislation up-to-date.
10. Recommended Practice
With the exception of those documents bearing official stamps and
signatures, Customs authorities should allow third parties to maintain
their records and papers required for audit and inspection on media
other than paper documents.
Notes 1. Customs authorities may allow records to be kept on
media such as microfilm, magnetic tape, etc.
2. Normally these records are required to be produced to the
Customs upon request in written format for audit and inspection.
[c)] Security
11. Recommended Practice
Where Customs authorities require third parties to provide security in
order to ensure the proper conduct of their business with the Customs,
a general security should be accepted and the amount of such security
should be fixed at the lowest possible level consistent with the
obligations assumed by the third party in relation to the Customs.
Note In some countries, third parties have formed associations which
regulate the activities of member third parties and which, in
addition, provide general security on behalf of their members.
12. Recommended Practice
Where Customs authorities require security to be provided, the choice
between various acceptable forms of security should be left to the
respective third party.
Note Customs authorities generally specify the acceptable forms of
security.
[d)] Refusal by the Customs to transact business with a third party
13. Standard
National legislation shall specify the circumstances where Customs may
refuse to transact business with a third party.
Note Customs authorities may refuse to transact business with a third
party if, for example, the third party has been convicted of a serious
Customs offence within the past five years or he has acted in a
reprehensible manner by consistently not fulfilling his
responsibilities to the person who designated him or to the Customs
authorities.
14. Recommended Practice
With the exception of cases where a third party has committed a
reprehensible action of a very serious nature (e.g. Customs fraud),
Customs authorities should issue written warnings to a third party for
reprehensible actions taken by him in connection with his dealings
with the Customs before suspending or revoking any licence or
authorisation or refusing to transact business with him.
Note A written warning would normally state the type or types of
reprehensible actions as well as the measures which are open to the
Customs to deal with future reprehensible actions.
15. Recommended Practice
Customs authorities should give written notification to the third
party of a decision to suspend or revoke a licence or authorisation or
a refusal to transact business with him.
16. Recommended Practice
Where Customs authorities have suspended or revoked a licence or
authorisation, or where they have refused to do business with a
third party, he should be reconsidered upon request for permission to
deal with Customs after a certain period of time.
Note Generally, permission to do business with the Customs is
reconsidered after not more than five years.
17. Recommended Practice
Written warnings, suspensions and revocations of licences or
authorisations, or refusal by the Customs to transact business with
third parties should be open to appeal through an appropriate
administrative procedure.
Note Appeal to the Customs is normally a first remedy for a third
party and does not limit him from seeking redress through other
channels including the courts.
Special provisions concerning Customs clearing agents
18. Standard
National legislation shall set out the requirements to be met and the
formalities to be accomplished by persons establishing themselves as
Customs clearing agents (1)(2).
Notes 1. Where Customs clearing agents are legal persons, there
may also be requirements and formalities in respect of their
employees.
2. It is normally required that Customs clearing agents be
legally established within the Customs territory where the
transactions with Customs take place and be of legally responsible
age.
COMMENTARY
(1) Countries whose only national requirements regarding Customs
clearing agents are that such agents establish themselves in
accordance with normal business practice meet the requirements of this
Standard.
(2) This provision is concerned with the idea of establishing persons
as Customs clearing agents and not with governing the affairs of these
agents once they have established themselves.
19. Standard
Customs authorities shall take measures sufficient to ensure that
Customs clearing agents are properly conducting their business with
Customs (1).
Notes 1. Where the licensing of Customs clearing agents is
required, the Customs may conduct suitable examinations to ensure that
the responsible person(s) possess an adequate knowledge of Customs
laws, regulations and procedures.
2. In some countries Customs authorities monitor the activities
of Customs clearing agents to determine their competence and manner of
dealing with the Customs and with persons concerned, especially as
concerns the handling of funds for the payment of required duties and
taxes (2).
COMMENTARY
(1) This provision permits Customs authorities to use their own
discretion in deciding which measures are sufficient to ensure the
proper business conduct of Customs clearing agents. The primary
purpose of the provision is to help ensure the continuing competence
of Customs clearing agents.
(2) Although it is beyond the scope of this Annex to address the
relationship between third parties and the persons concerned, it is
not uncommon to find that Customs authorities encourage proper
business conduct of clearing agents in their relationships with the
persons concerned. This is desirable for Customs authorities as well
as the person concerned. For example, in some countries, Customs
authorities require clearing agents to set out for the person
concerned a clear statement of the amount paid or payable to the
Customs on his behalf as well as the related charges for services
rendered. This is done to instill [instil ?] public trust in entities
which handle the major portion of Customs transactions and which could
reflect on the integrity of the Customs.
20. Recommended Practice
Customs authorities should not restrict the number of locations at
which a Customs clearing agent may do business with the Customs.
Note Customs clearing agents may be required to obtain separate
authorisation to transact business for each Customs office or region
of desired operation.
21. Recommended Practice
Customs authorities should not restrict the number of persons who may
establish themselves as Customs clearing agents.
Information concerning the relationship between
Customs authorities and third parties
22. Standard
Customs authorities shall ensure that all relevant information
concerning the regulations and procedures applicable to the
relationship between Customs administrations and third parties is
readily available to any person interested.
Note In some countries, Customs authorities provide lists of Customs
clearing agents.
* * *
II.-ENTRY INTO FORCE
Contracting Parties having accepted the Annex,
with dates of entry into force
India 30 August 1985
Israel 28 January 1984
Kenya 28 January 1984
New Zealand 28 January 1984
Slovenia 23 February 1993
Switzerland 25 October 1985
United States 28 January 1984
Yugoslavia 28 January 1984
Zimbabwe 20 September 1988
III.-RESERVATIONS
Contracting Parties having entered reservations
Contracting Parties Provisions reserved
India 3 - 9
Israel 3
Kenya 21
New Zealand 3
United States 3
Zimbabwe 10 - 14 - 15 - 16 - 17 - 18
IV.-ALPHABETICAL INDEX
Provisions
Appeals to reinstate third parties 17
Authorisation to act as a third party 5
Customs clearing agents
- numerical limits 21
- operating locations 20
- proper conduct 19
- requirements 18
Information 22
Liability of third party 7
Person concerned
- Customs treatment of 4
- right of free choice 3
Refusal by Customs to transact business with a third party 13
Reinstatement of third party in dealing with Customs 16
Retention of records and papers
- allowance for non-paper media 10
- essential documents to be retained 8
- time period for retention 9
Revocation or suspension of third party rights 15
Rights
- of person concerned 3
- of third party 6
- reinstatement of third party l6
- revocation and suspension concerning third party 15
Security
- acceptable forms of 12
- allowance for general security 11
- amount 11
Suspension or revocation of third party rights 15
Third party
- authorisation 5
- rights 6
Written notice of revocations or suspensions 15
Written warnings, issuance thereof 14
V.-PROVISIONS STUDIED IN DETAIL
AND REPRODUCED IN VOLUME IV
Provisions
- Customs clearing agents - Licensing conditions, responsibilities and
control 18 to 21
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