Introduction
The prosecution of these offenses may have consequences when you apply for an
AEO (Authorized Economic Operator) permit, as well as for your AEO status if
you already have one. Indirectly, criminal penalties can also affect your
customs permits that are closely linked to "AEO status".
This article sets out the legal framework of the relevant provisions in the
field of customs criminal law and AEO.
First of all, it is important to know that a single detected and punished
irregularity does not have a direct consequence for an AEO application or
existing AEO status. Most irregularities are dismissed as "mendum
facile" in the criminal sphere, but these "mistakes" are not
placed in a broader context where the (to be applied for) AEO status is
influenced.
Legal Provisions
Article 39(a) of the UCC (Union Customs Code) states that one of the criteria
for granting the status of "Authorised Economic Operator" or
"authorised trader" is: "no serious or repeated offences against
customs legislation and tax regulations and no criminal record of serious crimes
related to the applicant's economic activity."
This is further elaborated in Article 24 of the UCC Implementing Regulation.
Assuming that the applicant for AEO status is not a natural person, this
article stipulates that the UCC criterion is met if (in short) the applicant,
the director, or the person responsible for customs matters has not
"committed any serious or repeated offences against customs legislation
and tax regulations or had a criminal record of serious offenses related to the
economic activity in the past three years."
Several terms stand out: offenses, crimes and serious or repeated offence. What
exactly is meant by these terms?
Distinction between offences and crimes
The terms used in the Community legislation, such as serious offence, criminal
record, and serious crimes, are not further defined in Community law (UCC).
This is logical since criminal law is a domain that belongs to the sovereignty
of the member states. In other words, one must refer to national legislation
for definitions.
The distinction between offences and crimes in customs matters is determined by
whether the law provides for imprisonment for the offense. If imprisonment is
possible, it is considered an crime. If imprisonment is not possible, it is
considered an offence (Article 10:13 General Customs Act, Article 72 General
Tax Act).
Since the Community legislation refers to "serious crimes," it is not
only the distinction between offences and crimes that matters but also whether
there are serious offenses. Although we commonly refer to serious crimes or
serious offenses, this is not a legal term in itself.
In common criminal law, the distinction between minor and serious crimes is
derived from the regulations concerning the recording and retention in judicial
documentation, the "criminal record." Crimes automatically result in
a notation on this record. Offenses can also be noted if, for example, a judge
issues a conviction for the offenses (such as after filing an objection to a
tax penalty order). Therefore, offenses generally do not result in a notation
in the judicial documentation.
Minor crimes are those for which the law provides for a prison sentence of less
than 6 years. Serious crimes are those for which the law provides for a prison
sentence of at least 6 years. For minor crimes, the notation in the judicial
documentation is typically removed 20 years after the final judgment or after
full compliance with the penalty order. For serious crimes, this removal occurs
30 years after the final judgment or after full compliance with the penalty
order.
Judicial records of offenses are generally removed 5 years after the final
judgment or after full payment of a penalty order.
The concept of ‘repeated offenses
There is also no clear definition of the term "repeated offenses." It
is likely that Customs assesses the frequency in relation to the total activity
volume of the entity involved.
For example, two incorrect declarations out of ten per year is relatively much
more than 100 incorrect declarations out of 10,000 per year. However, where the
exact boundary lies is neither defined nor known.
Currently, there are no concrete examples of not obtaining, not renewing, or
revoking AEO status due to (repeated) offenses. Therefore, it cannot be
determined from practice where the boundary lies. It thus seems to be largely
an 'arbitrary matter.' The decision rests with the handling officer.
What if offenses have consequences?
Customs may decide to refuse an application for an AEO permit, not renew an AEO
permit, or suspend or revoke an AEO permit. Such a decision must be preceded by
a notice of intent. You can respond to this notice. Any decision by Customs to
proceed with one of the aforementioned actions is always an 'appealable
decision.' Therefore, you can file an objection against it or, if necessary,
present the case to the administrative court in an appeal procedure. Customs
must demonstrate and prove that the offenses are of such nature and extent that
they justify their action (rejection, non-renewal, suspension, or revocation).
Conclusion
Offenses in the customs area can affect your AEO application, your AEO status, and consequently your permits. However, it is difficult to determine when Customs will take such actions since the relevant terminology is not defined and there are no concrete examples indicating how Customs handles specific cases.
It is clear
that this assessment is highly case-specific and arbitrary. Any legal
consequence, such as rejection, non-renewal, suspension, or revocation, will be
communicated by Customs in an appealable decision. It is up to Customs to both
assert and prove that the criteria of Article 39(a) of the UCC are not (or no
longer) met. You can challenge this by filing an objection and, if necessary,
an appeal with the administrative court.
More information
For more information, please visit the website www.customsknowledge.nl or contact Lidwina Hoekstra or SamanthaZwart-Speelman.