Vertegenwoordiging

Many customs declarations are not submitted by the actual principal but by a representative. This representative is often a specialized (customs) agent or a logistics service provider.
Representation can occur in three ways:

-          declaration in one’s own name and on one’s own account
-          direct representation
-          indirect representation

Declaration in one’s own name and on one’s own account

Technically speaking, this is not truly representation in customs terms. All correspondence, including the initial booking and the invitation to pay for any post-clearance recovery, is directed to the representative. While this does reduce ambiguity, it creates uncertainty for the representative, as it remains uncertain whether they will be reimbursed by their principal.

Direct representation

Another option is to submit the declaration through direct representation. In the case of direct representation, the representative acts in the name and on behalf of the principal. The principal is considered as the declarant, and the representative is not liable for the customs debt.

Indirect representation

Another option is the use of indirect representation. In this situation, the representative acts in their own name but on behalf of another party. However, the representative is still considered the declarant, with the costs being billed to the principal.  

Representation is not possible in every situation

Although there are theoretically three types of representation, they cannot be chosen freely. For instance, direct representation is only possible for principals established within the EU. For indirect representation, this requirement does not apply, and principals established outside the EU may also be represented. For indirect representation, a written power of attorney is required.

Direct and indirect representation are only possible for companies with admission as a customs representative. This admission is only granted if the company meets the AEO criteria.

Practical tips

1.      Ensure a proper power of attorney

To represent a principal, a written power of attorney is required, or so it is often claimed! But is this truly the case? The answer is nuanced. It is not strictly necessary to have a “direct representation power of attorney.” What mostly matters is that it is clear that the principal has requested to be represented and has instructed the representative to submit the declaration. This can be done by phone or verbally, though this is less ideal for evidentiary purposes. A written power of attorney is therefore strongly recommended. Additionally, it is not enough to simply receive a request or instruction; it must come from an authorized individual within the principal’s organization. There are various other criteria as well.

2.      Representation is not always the solution

Direct or indirect representation is a helpful measure to limit risks for the representative. However, representation often presents a deceptive sense of security for the representative. While a declaration holds the status of “pending verification,” the guarantee provided by the declarant remains liable for any potential customs debt. This is a risk inherent to customs forwarding but one that many companies fail to fully recognize, particularly in cases involving provisional anti-dumping duties, where the verification process is often extended by customs for several months. During this period, the representative’s guarantee covers the customs debt, and if the anti-dumping duty is indeed required to be paid, customs may hold the representative accountable.

3.      Periodically review powers of attorny 

There is a risk that representation was assumed to be permitted by the representative, only for it to be invalid in retrospect. This can occur for various reasons:  

-          The power of attorney was limited to a single shipment, yet declarations were made for multiple shipments.
-          The power of attorney was not signed by an authorised person, and the absence of authority is successfully invoked at a later stage.
-          Representation rights have ended because the represented company was liquidated, declared bankrupt, or otherwise ceased to exist (for example in the case of a merger or acquisition).

Many of these situations can, however, be “rectified,” so that the customs debt does not necessarily have to be recovered from the representative. There have been several cases where claims based on an invalid power of attorney or guarantee calls were successfully challenged. We are here to assist you with these matters.