Who is the ‘declarant’ in the context of customs declarations?

1. Introduction

In several recent cases handled by the (economic) criminal court, this question played a significant role as it involved the accusation of ‘making an incorrect declaration’ (Article 10:5 of the General Customs Act) against the freight forwarder. When do you ‘make’ a declaration? And does it matter whether the declaration was made under direct or indirect representation? In this article, we will answer these questions.

2. Difference between direct and indirect representation

In the Netherlands, direct representation is possible in all customs processes and (legal) actions under customs legislation. With direct representation, the representative acts in the name and on behalf of the represented party. Essentially, the represented party acts, but uses the arm of the representative. Only the represented party is, in principle, responsible for the customs and/or fiscal consequences of the action. For instance, Article 5(15) of the Union Customs Code (UCC) states that the represented (and not the direct representative) is the declarant. If a declaration results in a customs debt (e.g., a declaration for placing goods into free circulation), then only the represented party is liable for the import duties and other import taxes. Only in the situation described in Article 77(3) UCC (indirect representation) are other persons also liable.

Indirect representation is also possible in all customs processes and (legal) actions under customs legislation. With indirect representation, the representative acts in their own name but for the account of the represented party. Both the representative and the represented party are, in principle, responsible for the customs and/or fiscal consequences of the action. The primary responsibility lies with the representative. Here too, Article 5(15) UCC states that the represented (and not the indirect representative) is the declarant. However, if a declaration results in a customs debt (e.g., a declaration for placing goods into free circulation), both the representative and the represented are liable for the import duties and other import taxes (Article 77(3) UCC).

3. Declaration ‘handling’, ‘submitting’, or ‘making’

The Dutch Customs Handbook makes a distinguishment between handling declarations, submitting declarations, and making declarations. Handling declarations is applicable when there is a general reference to representation (without specifying the form). The (direct or indirect) representative handles the declaration for their client.

With direct representation, the customs agent performs a service, a factual action that does not have legal consequences for them. The customs agent only ensures that the declaration of the interested party reaches Customs. The agent acts in the name and on behalf of the interested party. The interested party is the declarant and thus the person legally bound. The customs agent submits the declaration.

With indirect representation, the customs agent submits the declaration in their own name. This has legal consequences because they are the declarant and responsible for the content of the declaration and for fulfilling the obligations related to making the declaration. The customs agent performs a legal action: they make the declaration. Thus, there is a difference depending on whether the representation is direct or indirect.

4. Court's judgment

What is the view of the Dutch court on the foregoing? In one of the relevant cases, the freight forwarder acted both under direct and indirect representation. The court considered that the criminal provision of article 10:5 of the General Customs Act (making an incorrect declaration) is directed not at the ‘declarant’ but at ‘the person’ making an incorrect or incomplete declaration. According to the court, this means that the freight forwarder (in this case) is the one who can be held criminally liable for making an incorrect declaration.

This judgment – in itself – aligns with the Customs Handbook regarding indirect representation. However, the case also involved direct representation. The Customs Handbook specifically states that in the case of direct representation, the freight forwarder does not ‘make’ the declaration but ‘submits’ it on behalf of the represented party. Although this terminology is quite similar, the fact that this distinction is made implies that it should also result in a legal distinction. The court, however, did not make this distinction between direct and indirect representation.

The court referred – in this context – to another part of the Customs Handbook, which states that the customs representative is responsible for the correctness of their actions, also if they make a declaration in the name and on behalf of another (direct representation). This is – of course – generally correct. However, if the content of the declaration is incorrect due to inaccurate information received from the represented party, it is difficult to assert that the freight forwarder is making mistakes. Let alone that the freight forwarder should be held criminally responsible for this. Nevertheless, this is currently the case. In my opinion, this is incorrect.

5. Criminal record

It is important to note that a criminal record (regardless of the size of the fine) can impact the application for or already existing (customs) authorisation. Other interests are therefore also at stake. From this perspective, Customs or the court should not take lightly (or decide lightly) on criminal prosecution for (relatively speaking) minor infractions such as an incorrect declaration (e.g., an incorrect goods code or an incorrect customs value).

6. Conclusion

A mistake in a declaration can easily lead to criminal prosecution. This can be an  unpleasant surprise for the freight forwarder, with other (business) interests at stake besides the fine. It is therefore worth considering whether a response to Customs and/or the court is advisable. Customs Knowledge is happy to assist you!

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