Customs Freight Simplified Procedures (CFSP)

Foreword

This notice cancels and replaces Notice 760 (September 2009). Details of any changes to the previous version can be found in paragraph 1.1 of this notice.

1. What is this notice about?

This notice explains the purpose of Customs Freight Simplified Procedures (CFSP), the procedures available and guidance on the authorisation conditions.

It covers CFSP in sufficient detail to enable you to evaluate the different procedures available and decide how best to apply them to the particular needs of your business. It assumes that you have a basic understanding of how CHIEF operates.

Information relating to the CHIEF handling of CFSP declarations is available in the Tariff Volume 3.

The glossary at Section 15 explains the meaning of some of the words, phrases and abbreviations used.

1.1 What’s changed?

This notice replaces Notice 760 Custom Freight Simplified Procedures (CFSP) September 2009.

All CFSP Information Papers mentioned are available on the HMRC CFSP web page.

1.2 What law covers this notice?

The legal basis for CFSP is:

• the Community Customs Code (Council Regulation (EEC) 2913/92, Article 76, which makes provision for EU member states to authorise applicants to use simplified procedures under certain conditions, and
• the Implementing Regulation (Commission Regulation (EEC) 2454/93) Articles 253-278, which set out the provisions relating to the authorisation and operation of simplified procedures.

This notice explains our view of the law.

1.3 What do I do if I disagree with a Customs decision?

If you do not agree with any decision issued to you there are three options available. Within 30 days of the date of the decision you can either:

• Send new information or arguments to the decision maker,; or
• Request a review of the decision by someone not involved in making the disputed decision. Your request must be in writing and should set out the reasons why you do not agree with the decision. Please write to:

• Revenue & Customs
  Customs and International
  Review and Appeals Team
  7th Floor South West
  Alexander House
  21 Victoria Avenue
  SS99 1AA, or

• Appeal direct to the Tribunal who are independent of HMRC.

If you opt to have your case reviewed you will still be able to appeal to the tribunal if you disagree with the outcome.

Further information relating to reviews and appeals is contained in leaflet HMRC1 HM Revenue & Customs decisions - what to do if you disagree which can be obtained from our website, go to www.hmrc.gov.uk or by phoning 0845 900 0404.

2. Eligibility of goods for, and principles and advantages of CFSP

2.1 What goods are eligible for CFSP?

Most imported third country goods are eligible for CFSP. However, certain goods and procedures have been excluded, the details of which are in Section 13. There are also a number of Customs Procedures Codes (CPCs) which, because of frontier operational procedures, are excluded from CFSP. Details of excluded CPCs can be found on the HMRC CFSP web page.

2.2 The main principles of CFSP

These are:

• authorisation
• accelerated removal/release
• electronic reporting
• audit

2.3 Authorisation

You must be authorised by us to operate simplified procedures and hold a specific/general authority for any associated procedures such as Customs Warehousing, IPR, OPR, Free Zone, TA and End Use. The general authorisation criteria and conditions for CFSP are listed at Section 14.1.

Traders authorised to use simplified procedures will be issued with an authorisation letter that specifies:

• the procedures that may be used
• the Articles under which they are authorised, and
• the conditions that apply to the operation of the procedures.
• application form for authorisation to use CFSP (C&E 48) is available under ‘Forms’ on our website. Prior to authorisation you will receive a visit from an officer of HMRC who will validate, verify and test the information that you have provided and the systems which you use as well as examine your documented procedures and financial accounts.

2.4 Accelerated removal/release

Following completion of a Simplified Frontier Declaration (SFD) containing minimum details, you may remove goods from the frontier under transit to your premises for clearance using the Local Clearance Procedure (LCP) or alternatively you may release the goods to free circulation, customs warehousing, Free Zone or a Customs Procedure with Economic Impact (CPEI) using the Simplified Declaration Procedure (SDP).

2.5 Electronic Reporting

You must submit statistical and fiscal details of the goods to CHIEF (Customs Handling of Import & Export Freight) by electronically submitting a Supplementary Declaration (SD) within a defined time scale.

2.6 Audit

We may audit your commercial systems and records after the goods have cleared to satisfy ourselves that you are operating the procedures satisfactorily.

We will still treat goods imported under CFSP in the same way as goods entering the UK under normal procedures as far as anti-smuggling, health and import prohibition and restriction controls are concerned.

2.7 Advantages of CFSP

The use of CFSP will enable you to:

• gain accelerated release of your goods from Customs at the (air)port or at authorised locations inland, subject to anti-smuggling checks
• use CFSP in combination with normal entry and warehouse procedures to suit the needs of your business
• achieve cash flow benefits. For example Local Clearance allows you to store goods in Temporary Storage (TS) for up to 20 days before release to a Customs procedure or use. This means that whilst the goods are in TS, you can choose the release date (and therefore the tax point date) at the most convenient time for your business
• carry out National Transit movements under the LCP using a reduced level of guarantee
• submit frontier declarations (including National Transit) and all supplementary declarations by electronic means
• build a partnership with us so that assurance visits are cost effective, selected on the basis of risk, and test the completeness of internal controls, and
• use third-party service providers to submit electronic declarations.

3. Procedural and Documentary Requirements

3.1 Available Procedures

The simplified procedures available are:

• Simplified Declaration Procedure (SDP) for the release of goods at the frontier to most Customs procedures. See Section 5 for details; and
• Local Clearance Procedure (LCP) for the removal of goods from the frontier under transit arrangements to authorised locations, followed by TS and release to a Customs procedure. See Section 6 for details.

Both of the above procedures can be used in conjunction with Customs Warehousing, but the procedures are slightly modified. See Section 7 for details.

LCP can also be used to remove goods from Processing under Customs Control (PCC), Temporary Admission (TA) and Free Zone (FZ).

3.2 Documentary Requirements

The requirements for producing documents in conjunction with CFSP declarations are in Section 14.6.

3.3 Supplementary Declarations

The arrangements for the submission of the Supplementary Declaration (SD) are the same irrespective of which simplified procedure is used. See Section 9 for details.

4. Payment and security requirements

4.1 What type of payment will you accept?

You must pay using a duty deferment account. This is because CFSP is an electronic declaration method using CHIEF processing procedures. Therefore other payment methods such as cash or Flexible Accounting System (FAS) are not acceptable.

4.2 Do I have to use my own duty deferment account?

No. The deferment account used may be yours or the account may belong to a third party, as long as Customs has received written permission from the owner of the account for the account to be used. The deferment account(s) to be used for payment will be noted in your authorisation.

4.3 What should the deferment level be?

The level of the deferment account used must be sufficient to cover your actual duty and VAT liability for one calendar month. If the deferment level is exceeded you must contact Debt Management Banking (DMB) Southend on 01702 367425 or 01702 367431/50 to increase the level. If you fail to increase the deferment to an adequate level you may incur a Civil Penalty and/or have your authorisation suspended or revoked.

4.4 Do I have to provide security?

Yes. Under Community law you must provide security against any potential debts arising from the release of goods to a customs procedure. Community Customs Code Article 74 states:

‘Where acceptance of a customs declaration gives rise to a customs debt, the goods covered by the declaration shall not be released until the Customs debt has been paid or secured.’

The security takes the form of a blanket authority to debit the duty deferment account should the debt fail to be met. The deferment account(s) to be used for security will be noted in your authorisation.

4.5 What should the level of security be?

The deferment security level must be sufficient to cover your actual duty and VAT liability for one calendar month unless you are approved for the reduced security period (see Section 4.7) or Simplified Import VAT Accounting (SIVA) or the Excise Payment Security System (EPSS). Details can be found on our website, go to www.hmrc.gov.uk

If the security level is exceeded you must contact DMB Southend to increase it. If you fail to increase the security to an adequate level you may incur a Civil Penalty and/or have your authorisation suspended or revoked.

4.6 What if I am an Indirect Representative (IR)?

You have the choice of one of the following methods to secure the duty:

• your own duty deferment account or
• your customer’s duty deferment account (to cover the customer’s own CFSP liability).

Note: all declarations made through CFSP in your name and on behalf of your client must be secured, irrespective of whose deferment account is eventually used for payment.

This is because you are acting as an Indirect Representative and the level of security provided must be sufficient to cover your actual duty and VAT liability for one calendar month unless you are approved for the reduced security period (see Section 4.7) or SIVA or the Excise Payment Security System (EPSS)

If you are applying for CFSP and wish to use your customer’s deferment as a method of payment and a means of security you should give details on your application form. If you are an existing CFSP trader you should contact your authorising office to obtain authorisation to use your customer’s deferment account.

4.7 Reduced Security period: effect

If you are a CFSP authorised trader and pay some or all of the revenue due through an independent deferment account (such as an agent’s or client’s), you may be eligible to reduce the security required for CFSP purposes on that proportion of their transactions from a month to an eight or ten-day period. The effect of this is that:

• the reporting period for the Supplementary Declarations (SDs) will be reduced from a month to 8 days (the minimum allowable period)
• the security provided for the operation of CFSP may then be reduced to reflect the actual duty and VAT liability incurred over the 8-day period.

If you currently operate/wish to operate aggregation across the tax point you may opt to use the published aggregation (10 day) periods as an alternative. The security will need to be apportioned accordingly to reflect the period of cover. See Section 9.2 for further information on aggregation.

4.8 Reduced Security period: Conditions

Warning: failure to submit the declarations within the revised reporting periods may result in this facilitative measure being withdrawn. You may then be required to provide the full month’s security.

These reduced reporting/security periods will not affect the deferred payment periods. The deferment account through which the revenue will be paid must still be sufficient to cover a full month’s worth of duty and VAT payments.

For example:

Security provided to cover an average 8 day's revenue liability.

• SDs must be submitted as follows:
  Period 1 = 1st - 8th
  Period 2 = 9th - 16th
  Period 3 = 17th - 24th
  Period 4 = 24th to month end
• An FSD must be provided to Customs within 4 working days of the end of each period.

5. Simplified Declaration Procedure

5.1 When can the Simplified Declaration Procedure be used?

It may be used to release goods to:

• free circulation, IPR, PCC, OPR (including Simplified OPR), TA, End Use and Free Zone, or
• Customs Warehousing at the frontier (the Customs Warehousing provisions are in Section 7).

To enter goods to free circulation, IPR, PCC, TA, End Use and Free Zone using the Simplified Declaration Procedure a Simplified Frontier Declaration (SFD), containing a minimum amount of information, is required at the frontier.

You must allocate a Declaration Unique Consignment Reference (DUCR) to each consignment, which must be entered in box 44 of the SFD and SD.

Details of all relevant CFSP Customs Procedure Codes (CPCs) are at Section 8 and the requirements for supporting documentation are at Sections 8.2 and 14. The acceptance date of the SFD establishes the tax point and base date for the submission of the Supplementary Declaration (SD).

The SD is required subsequently for all goods declared using an SFD. It is an electronic message sent to CHIEF which contains fiscal and statistical information and allows Customs to calculate the tax and duties due. The SD must be sent to and accepted by CHIEF before the end of the fourth working day of the month following acceptance of the SFD.

6. The Local Clearance Procedure (LCP)

6.1 When can the LCP be used?

The LCP may be used to release goods to a Customs procedure at an authorised location. This section relates to locations other than Customs Warehouses which are dealt with in Section 7.

6.2 Are there any conditions?

Yes. You must be approved as an Authorised Consignee for Common/Community Transit (CT) or National transit (for UK only movements) and hold a transit guarantee before you can use the Local Clearance Procedures.

Additional criteria and conditions are found in Section 14.

6.3 What is Authorised Consignee status?

Authorised consignee status allows you to nominate your control office as the Office of Destination on the transit movement. You will not be required to present the goods at this office, although it will be necessary to lodge all copies of transit documents with the Office of Destination within one working day of the arrival of the goods at your premises.

If you wish to use CT, you will be required to communicate with Customs and end your transit movements electronically on the NCTS.

6.4 How do I apply for Authorised Consignee status?

You must complete an application form C1343 and return it to your CFSP authorising officer. A copy of the form can be found on our website.

6.5 Removal from the Frontier

You must allocate a Declaration Unique Consignment Reference (DUCR) to each consignment which must be entered in box 44 of the simplified and supplementary declaration.

You may use either Community Transit (CT) or National Transit procedures to move the goods from the frontier to your authorised location. If you are using CT, you can use the existing transit procedure to move the goods inland. If you are using National Transit you can submit an SFD electronically to CHIEF.

As part of the authorisation conditions you can designate more than one location to receive your goods. If you do not own the premises, an agreement must be in place between you and the owner of the premises which provides you with the authority to use the premises as an authorised consignee for transit purposes. You must be able to show that you have control over the goods.

6.6 Need for transit guarantees

If you are involved in UK only transit movements you may be able to establish entitlement to a reduced level of guarantee or a 0% guarantee (waiver).

If you wish to be authorised to move ‘high risk’ goods under transit then you will need to comply with additional conditions.

If you wish to apply for a CT transit guarantee (not restricted to UK only movements) you will need to comply with additional criteria and conditions to be eligible for a 0% guarantee (waiver).

6.7 How do I get a transit guarantee?

You must complete form C1343 and return it to your CFSP authorising officer. A copy of the form can be found on our website. See Commission Transit Part III for further information on transit guarantees.

6.8 Finalising the transit movement

The transit movement is considered to be ended when the goods arrive at the authorised location.

If using CT, you must end the transit movement electronically on the NCTS and lodge a copy of the transit document which accompanied the consignment inland, with the office of destination, within one working day of arrival of the goods at your inland location. Full requirements will be documented in your CT authorisation.

If using National Transit, you must provide us with an end of transit notification to formally discharge the transit movement.

You must:

• list details of all consignments which have moved from the frontier to your premises under National Transit each month
• send details at the end of each month by fax or email to the address shown below.

CFSP National Assurance Team (CNAT)
Fax: 0113 3894490
Email: cfsp_cope@hmrc.gsi.gov.uk

The details to be notified will be agreed with your authorising office and documented in your authorisation.

6.9 Temporary Storage (TS)

Temporary Storage arrangements must be approved by your CFSP authorising office.

When the transit movement is discharged the goods are considered to be in Temporary Storage. The consignment can remain in Temporary Storage for a period not exceeding twenty days from the date of transit discharge. It must then be entered to a Customs procedure. If, exceptionally, there is some reason why the goods cannot be entered to a Customs procedure within the twenty days you should report the facts to the CNAT, no later than five days before the twenty day deadline is due to expire. The following details must be provided:

• details of the consignment: description, commodity code, quantity, weight, value and DUCR
• date entered into TS
• the reason why the goods will not be entered to a customs procedure within the twenty days
• the length of extension required.

Requests for short extensions to the twenty-day limit will only be agreed if the delay is due to circumstances beyond your control and is evidenced to the satisfaction of the CNAT.

For further information see Temporary Storage (TS) Notice 199A on our website.

6.10 Release to a Customs Procedure

To release goods to a Customs procedure you must make an entry in your records. In some cases you may have to notify your local office of your intent to release goods to a procedure. This notification may then be followed by a period of ‘dwell time’ before release is granted and you can use the goods. The requirement to ‘pre-notify’ can be varied and will be detailed within the authorisation. All supporting documents, as specified in Volume 3, Part 3 of the Tariff must be available to your local office at the time of release.

The entry of the goods in your records establishes the tax point (unless the goods are being entered to Customs Warehousing) and sets the base date for submitting the supplementary declaration. The conditions relating to the Customs procedure chosen will apply.

7. Customs Warehousing

7.1 General

Under CFSP you can:

Enter goods to Customs Warehousing in the following ways:

• Simplified Declaration Procedure (where a Simplified Frontier Declaration (SFD) is followed by a Supplementary Declaration Import (SDI)), or
• Local Clearance Procedure (where goods move from the frontier to authorised locations under Transit procedures, then enter Temporary Storage). On removal, the goods enter Customs Warehousing, an entry is made in the local records and a Supplementary Declaration Import (SDI) is submitted.

Remove goods using:

• Local Clearance Procedure (via an entry in your local clearance records) followed by a Supplementary Declaration Warehouse (SDW).

The authorisation conditions for the above procedures are listed in Section 6. The existing requirements for your Customs Warehouse authorisation will remain unchanged.

7.2 Entry into Customs Warehousing using the Simplified Declaration Procedure

The following conditions apply depending on the warehouse type used:

Note: the acceptance date of the SFD establishes the base date for submitting the SDI. The tax point is not established at this time. CPC details are in Section 8.

7.3 Removal from Customs Warehousing using the Local Clearance Procedure

Under the Local Clearance Procedure, entry in the local clearance record establishes the tax point and creates the base date for the submission of the Customs Warehouse removal declaration (SDW).

8. Simplified Frontier Declaration (SFD)

8.1 When is the SFD used?

For CFSP, the Simplified Frontier Declaration (SFD) is used to declare imported goods at the frontier. It is submitted to CHIEF electronically. At (air)ports, that are not electronically linked to CHIEF a hard copy of the SFD is required to clear the goods. Only for certain goods will supporting documentation be required. Under the Simplified Declaration Procedure, the acceptance date and time of the SFD is used as the base date and for some Customs procedures it establishes the tax point.

The SFD is accepted and processed at both inventory linked and other customs locations using the existing DTI and other infrastructure.

The data required will vary depending on the commercial procedures (such as inventory linking) at the location and the simplified procedure used.

Information on SFD data completion is in CFSP Information Paper 49/08.

8.2 Clearance by CHIEF

CHIEF performs validation checks on the SFDs that you submit to ensure that you are authorised for the type of simplification used.

You will not normally need to present hard copy entries and supporting documentation to Customs at the frontier.

8.3 Controlled Goods (including Excise goods)

Controlled goods may only be released from the frontier using the Simplified Declaration Procedure. CFSP Information paper 43/07 provides details of controlled goods for CFSP purposes. There are special frontier CPCs which must be used and additional boxes that must be completed on the SFD.

With the exception of goods requiring Phytosanitary and/or Conformity certificates, such as bulbs, tissue culture, trees etc, seeds for planting, potatoes, certain fruit and vegetables, certain cut flowers (e.g. carnations, chrysanthemums, roses etc), restricted growing medium and wood and wood products, the Local Clearance Procedure must not be used to release controlled goods at the frontier. However these goods may later be released from warehousing and free zones using the Local Clearance Procedure.

See CFSP Information papers 42/07 and 65/09 for further details on importing goods subject to Phytosanitary/Conformity certificates.

8.3.1 Excise Goods

Current CFSP procedures only allow for the importation of third country alcohol and tobacco goods. All other excise goods must be imported using full frontier procedures.

The Local Clearance Procedure must not be used to release excise goods at the frontier. However these goods may later be released from warehousing and free zones using the Local Clearance Procedure.

There is a special frontier CPC which must be used for entering excise goods into free circulation and additional boxes that must be completed on the SFD.

9. Supplementary Declarations (SDs)

9.1 General

You are required to make a Supplementary Declaration (SD) to report fiscal and statistical information which is needed to calculate any revenue due and for gathering trade statistics.

You may submit more than one SD in respect of a single SFD. You must submit the SD electronically to CHIEF via Electronic Data Interchange (EDI) within the required reporting period. You may transmit declarations individually or in batches, although we recommend that they are sent in frequently rather than leaving them to accumulate until the end of the reporting period. On acceptance of the SD, CHIEF will respond with a CUSRES message giving the calculated revenue.

Information on SD data completion is in CFSP Information Paper 49/08.

9.2 Aggregation

You may wish to consider aggregation which will reduce the number of SDs created. Aggregation allows you to combine SDs which contain the same header and item level data into a single customs declaration. Specific rules apply to the aggregation of data, see CFSP Information Papers 31/06 and 37/07 for further details.

You must obtain prior approval from your authorising Customs office(r) before you can use aggregation across a tax point (10 day aggregation). You will have to meet additional criteria and conditions and exercise stringent controls within your system.

You will not be able to aggregate across accounting periods (for same goods with tax points of 31 March, last day of one accounting period and 1 April, first day of next).

9.2.1 Single rate of exchange

If you are approved for 10 day aggregation (see Section 9.2) you may also apply to use a single (fixed) rate of exchange across the whole aggregation period. Further details can be found in CFSP Information Paper 64/10.

Conditions of approval include:

• You must have computer software that is capable of converting the invoice currency of the goods into sterling
• you must apply a single rate of exchange to convert all elements forming the customs value of your aggregated SDs into sterling
• the customs exchange rate to be used will be the rate applicable on the first day of each aggregation period
• the single rate may not be varied during the aggregation period
• you must continue using a single rate unless there is a significant change to your business. If you wish to revert to using a flexible rate, you must first contact your supervising office.

9.3 Submitting Supplementary Declarations to Customs

You will need access to CHIEF to enable you to submit CFSP Supplementary Declarations. Your authorising officer will arrange for you to be set up with access to the system which will allow you to use specific CFSP CPCs and perform specified transactions such as submitting SDs. If you already have access to CHIEF these transactions can be added to your role (frontier DTI badge).

SDs can be transmitted to CHIEF by either:

• the existing DTI System Operator networks dealing with frontier clearances, or
• an email message via an Internet Service Provider (ISP).

An email message can contain a batch of SDs. Technical Service Knowledge (TSK) will forward the SDs to CHIEF, capture the electronic responses and forward them to the originator via the same (email) route.

Technical specifications and details of some agents and software providers can be found on the CFSP web page on our website.

You may choose whichever route suits you best. However, in either case, you must capture the electronic response and record the details in your commercial records. You must amend, resubmit rejected declarations and have them accepted by CHIEF before the end of the reporting period. No record will be kept on CHIEF and an entry reference number will not be allocated to rejected declarations.

9.4 Supplementary Declaration details

An SD contains similar data to a normal SAD with the addition of a date and time which is either:

• the acceptance date and time of the associated SFD, or
• the date and time of entry in your records if the Local Clearance Procedure is used.

9.5 Processing of accounting data on Supplementary Declarations

Customs charges are accounted for and payment is made by a deferment account for outright payment or in some cases the potential charges are secured via a deferred Miscellaneous Cash Deposit.(MCD).

No other form of payment or security may be used (see Section 4).

9.6 Deadlines for sending Supplementary Declarations to CHIEF

The SD must be sent to and accepted by CHIEF before the end of the fourth working day of the month following acceptance of the SFD, or the date of entry in the records.

Examples:

(a) If you submit an SFD for release to free circulation on 29 June (pre-lodged) but the notification of the arrival of the goods was not received until 2 July, the base date would be 2 July (i.e. the acceptance date of the SFD). You must submit an SD to CHIEF before the end of the fourth working day of August.

(b) If you submit an SFD for removal to Local Clearance on 14 August (date goods arrived) and the date of release to a Customs procedure (as recorded in the trader’s records) was 2 September, the base date would be 2 September. You must submit an SD to CHIEF before the end of the fourth working day of October.

You can submit any number of batches of SDs throughout the period and a batch of messages can contain declarations for different periods.

There is a requirement to limit the size of X400 data submitted to SMC and CHIEF. Large files can cause significant processing delays, therefore the maximum size of a file should be 3MB. If this level is exceeded the file will be rejected.

You must deal with all errors and re-send the declaration until a CUSRES has been received. This must be before the end of the reporting period. All errors must be cleared before you send your Final Supplementary Declaration (FSD) for the period (see Section 9.10).

Note: Exceptionally where public holidays affect the accounting timetable, SD details may be required by the end of the third working day of the reporting period. In these circumstances, you will be notified in advance via an Information Paper on the CFSP website. Alternatively if you are on the mailing list (see CFSP Information Paper 30/05) you will be notified via email.

9.7 Excise reporting periods

If you are authorised to import excise duty goods through CFSP you must submit the SDs (whether customs duty is also declared or not) according to the excise reporting periods. For excise duty purposes the calendar month is split into two reporting periods to allow for the collection of excise duty on the 29th of the month and the customs duty and VAT on the 15th of the month.

The two reporting periods are as follows:

• 15th – end of month (Excise 1)
• 1st – 14th of the month (Excise 2)

For example:

9.8 Adjustments to Supplementary Declarations

SDs are processed by CHIEF in a similar way to full frontier SADs.

We recognise that an SD which has been accepted by CHIEF may contain inaccuracies. Therefore you are given a period of 24 hours to amend or cancel the SD. If the declaration is not amended or cancelled within this timescale, the SD record is finalised. No amendments or deletions can be carried out after the 1st working day of the month following the month end or once the declaration has been finalised. See CFSP Information Paper 66/10 for information regarding Supplementary Declaration amendment requests

A request for amendment or cancellation of a cleared Simplified Frontier Declaration (SFD) should be sent via the CFSP notification template to:

HMRC
CFSP National Assurance Team (CNAT)
Peter Bennett House
Redvers Close
Leeds
LS16 6RQ

Fax number: 0113 389 4490
Email: cfsp_cope@hmrc.gsi.gov.uk

9.9 Late submission of Supplementary Declarations

If for any reason you are unable to submit any SDs by the due date, you must advise us of the following information by fax or email to:

HMRC
CFSP National Assurance Team (CNAT)
Peter Bennett House
Redvers Close
Leeds
LS16 6RQ

Fax number: 0113 389 4490
Email: cfsp_cope@hmrc.gsi.gov.uk

• authorised CFSP trader's EORI and deferment account number
• month in question
• total number of SDI/SDWs not submitted in time
• total amount of revenue due but not paid on the outstanding SDI/SDWs, broken down into customs duty, excise duty and VAT as applicable, and
• the sender’s name and position within the business.

This information must also be provided by the 4th working day deadline.

Customs will then arrange for this amount to be debited to your deferment account. You will still be required to submit all the outstanding SDI/SDWs as soon as possible. When this has been done you will be required to fax or email the CNAT again with the following information:

• authorised CFSP trader's name, EORI and deferment account number
• month in question
• number of previously outstanding SDI/SDWs now submitted
• total amount of revenue due, broken down as above
• list of entry numbers relating to the SDI/SDWs
• the sender's name and position within the business.

Customs will then credit your deferment account with the amount of revenue initially paid to avoid you having to pay twice. SDI/SDWs submitted after the 4th working day of the month following the month to which they relate will be accepted and processed by CHIEF, however you must show the late submission on the next FSD.

If you are late submitting your SDI/SDWs, you may incur a Civil Penalty and/or have your authorisation suspended or revoked.

9.10 Final Supplementary Declarations (FSDs)

9.10.1 Customs

If you are operating the standard customs reporting period you must submit a single FSD per authorised EORI by the 4th working day of the month following the reporting period, showing the number of SDIs and SDWs due/submitted in the reporting period. The FSD may also be used to report late declarations from previous periods. These should have already been reported to the CNAT as per Section 9.9. FSD nil returns are required.

The CPC to be used on the Customs only FSD is 06 19 090.

The acceptance date (tax point date) shown on the FSD is always the 1st day of the month being finalised.

The details of the SDIs and SDWs due and submitted must be shown in box 44 under item level AI statement ‘FINSD’. Full completion requirements are found in the CPC notes in the Tariff Volume 3, Part 3.

9.10.2 Excise

If you are using the Excise reporting periods you are required to submit an FSD by the end of the 4th working day following the end of each excise reporting period. The period (and month if there are outstanding SDs for previous periods) to which the FSD relates must be entered in box 44 under item level AI statement ‘FINSD’. Any outstanding transmissions from previous periods should have already been reported to the CNAT as per Section 9.9 above. FSD nil returns are required.

The CPC to be used on the Excise only FSD is 06 49 090.

Full completion requirements are found in the CPC notes in the Tariff Volume 3, Part 3.

Reduced Security/Reporting Periods

If you are using the reduced security/reporting periods you will be required to submit an FSD within 4 working days of the end of each reporting period.

For example for January 2007 there would be four FSDs:

FSD 1 - box 44 ‘FINSD’ statement would show period 1 ‘SDI =
8/8 SDW = 10/10’

FSD 2 - box 44 ‘FINSD’ statement would show period 2 ‘SDI =
9/9 SDW = 11/11’

FSD 3 - box 44 ‘FINSD’ statement would show period 3 'SDI =
15/15 SDW = 10/10’

FSD 4 - box 44 ‘FINSD’ would show period 4 ‘SDI = 9/9 SDW =
13/13’

An end of the month FSD is not required if you are submitting FSDs for each period during the month.

If you are operating aggregation but have not opted for the reduced security periods then you are not required to submit an FSD for each aggregation period. For traders using aggregation the FSD requirements are as detailed at 9.10.1 or 9.10.2.

If you submit your FSDs late, you may incur a Civil Penalty and/or have your authorisation for CFSP suspended or revoked.

10. Representation

10.1 What do you mean by representation?

As an authorised CFSP trader you can submit your own declarations or they may be submitted on your behalf by a nominated third party (for example a freight forwarder or an agent with access to CHIEF). The third party acts as your representative and must maintain a full audit trail of your declarations.

You must give written permission for third parties to submit CFSP declarations on your behalf. The permission must also state the form of representation which applies (see Section 10.2).

10.2 What types of representation are there?

There are three types:

Self representation

• this is where you, as an importer who is authorised for CFSP, make declarations in your own name and on your own behalf without using the services of a third party (such as a freight forwarder/agent) to submit declarations.

Direct representation

• this is where a third party acts in the name of and on behalf of the authorised importer. The authorised importer is responsible for any Customs debt, and

Indirect representation

• this is where the authorised third party acts in their own name and on behalf of the importer and is jointly and severally liable with the importer for any Customs debt.

If you are an importer and employ a third party to make declarations on your behalf, the third party (such as a freight forwarder/agent) may act as either a direct or indirect representative.

Where you are authorised to use CFSP and make declarations in your own name and on behalf of others you must act as an indirect representative. If you act as an indirect representative you are jointly and severally liable with the importer for any Customs debt. When an indirect representative uses their client’s deferment for payment purposes, the client's deferment may also be used as a means of security to cover that client’s CFSP liabilities (see Section 4 for further details).

11. Visits by HMRC Officers

11.1 Why do you visit?

One way that we ensure that the amount of tax and duty you pay is correct and that you are complying with other customs requirements is by visiting you to examine your business records, systems, trading methods, premises and goods. Visiting also gives you the opportunity to ask us to clarify issues about which you are unsure. Of course, we may not be able to look at all aspects of your records and business during the visit, so you should not assume that you are accounting for everything correctly if no errors are found. It is therefore in your own interest to ask us if you are unsure about the operation of CFSP in your business.

11.2 How often do you visit?

This will depend upon:

• the size and complexity of your business
• your use of third party representatives
• your record of past compliance.

Businesses which send in late or incorrect declarations and payments are visited more often than compliant ones.

11.3 How long will the visit take?

For a small business a visit may take only a few hours but for a large, complex business it can last two or more days. The use of third party representatives (direct or indirect) may also influence the amount of time involved.

We aim to carry out our visits as quickly and efficiently as possible. You can help us by:

• providing the relevant records and documentation
• helping us to understand them, especially if there is anything special or unusual about your particular business, and
• ensuring that responsible staff are available for interview.

11.4 Where do you visit?

We normally visit you at your main place of business. We may also wish to visit a third party representative if they hold any records relevant to your CFSP business. If any of your commercial or accounting records are kept elsewhere you should tell us when the appointment is made.

11.5 What information and documentation will I need to supply?

You will need to give us access to the systems you use to calculate duties and VAT and make your CFSP declarations.

Your visiting officer will have agreed with you at the authorisation stage the records and documentation you or your nominated third party need to maintain for CFSP. The following list is an example of the records and documents you should make available to our officer at the visit:

• sales and purchase ledgers
• journals
• sales and purchase orders, invoices and delivery notes
• commercial freight and transport documents
• import and export licences
• preference documents such as the EUR 1 and GSP certificates
• bank statements
• stock records
• valuation statements
• full annual accounts and statements, and
• complete records of all customs declarations including amendments from the simplified declaration at the frontier through to the final supplementary declaration.

You must make sure that all documents and declarations relating to your CFSP entries are retained and available for examination for four years from the date of the declaration.

With the exception of preference documents such as the EUR 1 and GSP certificates which must be retained as the original hard copy, you can store and present these documents in any readable medium including electronic means. Irrespective of the medium, we will normally expect the information to be made available on request.

If you cannot do this but can give a reasonable explanation for its non-availability and locality, we may accept this. However, we will still require the information or document to be produced within an agreed and reasonable timescale.

12. Miscellaneous

12.1 EDIFACT message handling

There are no special considerations for the handling of electronic SFDs. Apart from the reduced amount of information required to be input to CHIEF, handling is the same as for current frontier SAD declarations.

12.2 Message testing

A test kit is available from our website to enable the testing of your communications with Departmental systems. The test kit provides samples of each type of declaration (single and multi-item) including error messages and front-end credibility checks (FEC) but should not be used for high volume testing.

You should ensure that, in consultation with your authorising officer, you also carry out systems testing to test the adequacy of your system using your own data. Systems testing should include any communications links within the company - that is between data systems, stock accounts and the messaging software or between members of staff.

12.3 Response handling

If a declaration is rejected by CHIEF a response message will be returned. The message will detail the reason for rejection. No record will be retained on CHIEF and the corrected message will need to be retransmitted until it is accepted.

12.4 Email route considerations

Before transmission you should speak to your email service provider and Technical Service Knowledge (TSK), via our VAT Helpline, phone 0845 010 9000, to ensure that your system is compatible with the requirements of CFSP. Each email interchange should have a unique identification. TSK will reject an interchange as a duplicate if the same reference is used within a defined period.

12.5 Rejected imports

If, after release or removal of the goods from the frontier, you find they are defective or eligible for repayment or remission of Customs charges as defined in Notice 266 Rejected imports, you should contact our advice service on 0845 010 9000 for further advice.

12.6 Quotas

A claim to a quota may be made when you submit your SDI/SDW. Supporting documents will need to be available at that time. Where the SD is used to make a claim for quota, the date of acceptance by CHIEF of the SD (which is not the tax point date) will be the date used to schedule the claim. As it is possible that the quota may be exhausted before the SD is submitted, you may wish to consider whether to claim a quota at the frontier using conventional entry procedures instead.

12.7 X400 Message size

There is a requirement to limit the size of X400 data submitted to SMC and CHIEF. Large files can cause significant processing delays; therefore the maximum size of a file should be 3MB. If this level is exceeded the file will be rejected.

13. Goods outside the scope of CFSP

The goods identified in this section are excluded from CFSP, in other words they must not be included in a consignment covered by a CFSP declaration.

14. Authorisation criteria and conditions

To be eligible for CFSP, you have to satisfy the following basic criteria and comply with any additional criteria for the procedure(s) you intend to use.

14.1 General criteria and conditions

You must:

• Have a proven record of financial solvency
• have a good record of compliance with all customs related requirements including Intrastat submissions, VAT returns etc.
• maintain a regular pattern of third country declarations against your/your Economic Operator Registration Identification (EORI) number
• hold authorisations for the other Customs procedures to which you wish to enter goods using CFSP and, where there is an existing requirement as stated in the authorisation of a Customs procedure, record the required details in the records
• notify Customs of any changes to your business that would impact on your authorisation e.g.:
• change of business or trading name
• change of premises
• significant alterations to your business pattern (e.g. changes to the type of goods or the processing or storage procedures, changes to any Direct Representatives if used)
• significant changes to your record keeping systems (e.g. computer hardware or software, or the route by which you submit your SDs)
• maintain a set of documented procedures that accurately describe:
• the structure and internal controls of your business,
• how the audit trail is maintained,
• the back up, recovery, fallback, archiving and retrieval of your business records,
• the security and archiving of documentation,
• the procedures for the making of customs declarations, the use of customs agents and the flow of goods,
• how irregularities and errors are identified and actioned.
• calculate revenue due (for example Anti-Dumping Duty) when appropriate and report these to Customs in accordance with the Integrated Tariff of the United Kingdom Volume 3, Part 3
• report any errors found after the Final Supplementary Declaration (FSD) for the period has been submitted to the CNAT
• hold and maintain a set of commercial records and declarations for the goods declared via these procedures as specified in the Customs Traders (Accounts and Records) Regulations 1995 (SI 1995/1203)
• maintain a system in support of the records kept which:
  - establishes their relationship to the declarations made and
  - is sufficient to enable Customs to carry out effective checks on compliance with import prohibitions or restrictions or any other provisions governing release of the goods to free circulation or other Customs procedures
• keep an archive of all declarations made for 4 years after the date of their submission and make this available to Customs when asked
• allow Customs to audit your system when requested, providing our staff with access to suitable office, toilet and car parking facilities, free of charge, and
• comply with all the relevant provisions as laid down in EU and UK Customs legislation and all relevant requirements imposed by Customs which are set out in our official Notices or other official publications.

14.2 Criteria and conditions relating to individual procedures

These will be included in the authorisation where appropriate.

14.3 Conditions relating to all Simplified Procedures

General conditions

You must:

• declare only eligible goods (see Section 13)
• provide security to the satisfaction of the Commissioners for Revenue & Customs for duties, taxes and levies, which may arise in respect of goods declared under the simplified procedure
• monitor the security provided to Customs in respect of the goods declared under the simplified procedure and ensure that it is sufficient to cover your liabilities at all times. If the security is found to be insufficient, take immediate action to have it increased.
• allocate a Declaration Unique Consignment Reference (DUCR) to each import consignment (or Customs Warehouse removal declaration) which can be used to trace the consignment through your records. The DUCR declared on the SD must be the same as declared on the SFD.
• submit to Customs accurate and complete simplified and supplementary declarations
• ensure any failed messages are actioned, corrected and resubmitted within the time limit
• advise the CNAT of the details of any SDs you have failed to submit successfully within the period, by the 4th working day of the following month
• submit a Final Supplementary Declaration (FSD) to Customs by the 4th working day of the following month declaring the number of Supplementary Declarations (SDI/SDWs) that were submitted during the period, in the manner and format specified in the Tariff Volume 3, Part 3. Nil returns are required.

14.4 Specific criteria and conditions for Simplified Declaration Procedure (SDP)

14.4.1 Simplified Declaration Procedure (excluding entry to Customs Warehousing or Free Zone)

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and format specified in the Tariff Volume 3, Part 3.

Enter on the SFD either:

• CPC 06 10 040 (SDP release to Free Circulation), or
• CPC 06 10 061 (SDP release to a Customs Procedure with Economic Impact (CPEI), End Use and RGR).

For goods allocated route 1 or 2 send a hard copy of the SFD and supporting documentation to Customs at the National Clearance Hub (NCH).

14.4.2 Simplified Declaration Procedure to Customs Warehousing

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and format specified in the Tariff Volume 3, Part 3
• Enter CPC 06 12 071 (SDP release to types A, C, D and E Warehousing) on the SFD
• For goods allocated route 1 or 2 send a hard copy of the SFD and supporting documentation to Customs at the National Clearance Hub (NCH).

14.4.3 Simplified Declaration Procedure (excluding entry to Customs Warehousing or Free Zone) for controlled goods

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and the format specified in the Tariff Volume 3, Part 3.

Enter on the SFD either:

• CPC 06 20 040 (SDP Controlled goods released to Free Circulation) or
• CPC 06 20 061 (SDP Controlled goods released to a Customs Procedure with Economic Impact (CPEI), End Use and RGR) or
• CPC 06 30 040 (SDP Controlled drugs released to Free Circulation) or
• CPC 06 30 061 (SDP Controlled drugs released to a Customs Procedure with Economic Impact (CPEI), End Use and RGR ) or
• CPC 06 40 040 (SDP Excise goods released to Free Circulation).

For goods allocated route 1 or 2 send a hard copy of the SFD and supporting documentation to Customs at the National Clearance Hub (NCH).

14.4.4 Simplified Declaration Procedure to Customs Warehousing for controlled goods

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and the format specified in the Tariff Volume 3, Part 3.

Enter on the SFD either:

• 06 22 071 (SDP Controlled goods, including excise goods, released to types A, C, D and E Warehousing), or
• CPC 06 32 071 (SDP Controlled drugs released to types A, C, D and E warehousing).

For goods allocated route 1 or 2 send a hard copy of the SFD and supporting documentation to Customs at the National Clearance Hub (NCH).

14.4.5 Simplified Declaration Procedure into a Free Zone (excluding controlled goods)

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and the format specified in the Tariff Volume 3, Part 3
• use CPC 06 14 078 (SDP release into a Free Zone).

14.4.6 Simplified Declaration Procedure into a Free Zone for controlled goods

In addition to complying with the general conditions of authorisation you must also:

• Submit the SFD electronically to CHIEF in the manner and the format specified in the Tariff Volume 3, Part 3.

Enter on the SFD either:

• CPC 06 24 078 (SDP Controlled goods, including excise goods, released into a Free Zone), or
• CPC 06 34 078 (SDP Controlled drugs released into a Free Zone).

14.5 Local Clearance Procedure to authorised Temporary Storage (TS) premises

In addition to complying with the general conditions of authorisation you must also:

enter on the SFD either:

• CPC 06 11 000 (LCP release to UK National transit simplification), or
• CPC 06 11 001 (LCP release to Community Transit (NCTS) (C21)), or
• CPC 06 11 002 (LCP release to UK National Transit for goods requiring Conformity and/or Phytosanitary certificates (SFD)).

14.5.1 Removal from Customs Warehousing using the Local Clearance Procedure

In addition to complying with the conditions in the general authorisation you must also:

• Comply with the specific requirements in your Customs Warehousing authorisation (C1410) and annexes.

14.5.2 Removal from Temporary Admission Auction House Special Scheme using the Local Clearance Procedure

In addition to complying with the general conditions of authorisation you must also:

• Make entry in your Local Clearance records to establish the date of diversion from Temporary Admission to Free Circulation (the entry must be made in accordance with the requirements of your Temporary Admission Special Scheme authorisation)
• Record the tax point date in your Local Clearance records
• Submit a supplementary declaration using CPC 40 53 000 by the 4th working day of the month following the tax point month.

14.6 Requirements for Supporting Documentation

The details including (where required) the serial numbers of any supporting documents, licenses or certificates must be entered in box 44 of the SDI/SDW under the appropriate document and status code. See Appendix C11 of Volume 3, Part 3 of the Tariff for further details.

14.6.1 Simplified Declaration Procedure (SDP) to Free Circulation

For the requirements of goods going into Free Circulation using SDP see CFSP Information Paper 44/07 available from our website, go to www.hmrc.gov.uk

14.6.2 Simplified Declaration Procedure (SDP) for controlled goods and excise goods

Goods within these categories must be accompanied by a hard copy of the SFD and full supporting documentation which must be sent for verification to Customs at the National Clearance Hub (NCH). For details see CFSP Information Paper 43/07.

14.6.3 Simplified Declaration Procedure (SDP) - Type A, C, D or E Customs Warehouse

Documents are not required to be presented to Customs, however they may be required on removal from the warehouse in accordance with the rules applicable to the procedure to which they are entered.

14.6.4 Local Clearance Procedure (LCP)

Supporting documents other than those required for Community Transit are not required at the frontier. Traders must, however, make them available to Customs, if required, on release of the goods at the authorised location. The details, including (where required) the serial numbers of any supporting documents, certificates, or licenses must be entered in box 44 of the SDI/SDW under the appropriate document and status code. For details see Appendices C10 and C11 of Volume 3, Part 3 of the Tariff.

Many documents are now presented to Customs electronically, however there are specific rules for the handling and processing of certain paper documents as follows:

(a) BIS (formerly BERR/DTI) Import Licences. At the time the goods are released, the licence should be attributed by the trader to show the quantities from each SDI/SDW, indicating both the DUCR and entry reference. When the licence is exhausted, out of date or no longer required it is to be forwarded to the CNAT. Licences must be surrendered to us on request.

(b) Documentary proof of origin. You must retain these documents and indelibly endorse them with the DUCR and entry reference for each consignment covered. They must be surrendered to us on request.

(c) Preference certificates. Where a claim to preference is made, you must endorse the document with the DUCR number and the date of the claim (or alternatively if your authorising officer agrees, provide a systems usage report which must be able to link the Preference certificate to the Supplementary Declaration). You should retain the original certificate, although it must be made available to us on request. The serial number of the certificate must be entered against the appropriate document and status codes in box 44 of the SDI/SDW. See Customs Information Paper (09) 04 for details.

(d) For horticultural, planting material and plant related products requiring a Conformity and/or Phyto-sanitary and Quarantine Release Certificate. You must record the Phyto-sanitary certificate, license and status codes in box 44 of the SFD. The DUCR/part allocated to the SFD must also be recorded on the electronic Advance Notification sent to the PEACH system. Once the goods have been released inland, the details of the Conformity and/or Quarantine Release Certificate must be recorded in box 44 of the SD. You must retain the original certificate(s) for your records. See CFSP Information Paper 65/10 for details.

(e) For wood and wood products controlled by the Forestry Commission requiring a Phyto-sanitary and Quarantine Release Certificate. You must record the appropriate certificate, license and status codes in box 44 of the SFD and the DUCR and entry details allocated to the SFD on the Phyto-sanitary Certificate. Once the goods have been manually released inland, the details of the Quarantine Release Certificate must be recorded in box 44 of the SD. You must retain the original certificate(s) for your records. See CFSP Information Paper 42/09 for details.

15. Glossary of terms and abbreviations

Your rights and obligations

Your Charter explains what you can expect from us and what we can expect from you. For more information go to www.hmrc.gov.uk/charter

Do you have any comments or suggestions?

If you have any comments or suggestions to make about this notice, please write to:

HM Revenue & Customs
10th floor Alexander House
21 Victoria Avenue
Southend-on-Sea
Essex
SS99 1AA

Please note this address is not for general enquiries.

For your general enquiries please phone our Helpline 0845 010 9000.

Putting things right

If you are not satisfied with our service, please let the person dealing with your affairs know what is wrong. We will work as quickly as possible to put things right and settle your complaint. If you are still unhappy, ask for your complaint to be referred to the Complaints Manager.

For more information about our complaints procedures go to www.hmrc.gov.uk and under quick links select Complaints.

How we use your information

HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.

We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:

• check the accuracy of information
• prevent or detect crime
• protect public funds.

We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so. For more information go to www.hmrc.gov.uk and look for Data Protection Act within the Search facility.

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