Introduction to CFSPs

HM Revenue and Customs devised the CFSP’s (Customs Freight Simplified Procedures) to facilitate the movement of goods through Customs faster and more easily. This is quite a complicated procedure and by necessity this report is an introduction only to CFSP.

There are presently two types of CFSPs, both of which are covered through the Customs Handling of Import and Export Freight (CHIEF) system. These are the Simplified Declaration Procedure (SDF) and the Local Clearance Procedure (LCP).

The relevant HMRC notice for these procedures is Notice 760 Customs Freight Simplified Procedures (CFSP).

Anyone using CFSP must be pre-authorized by Revenue and Customs to do so, and anyone wishing to apply to use these systems needs to complete a C&F 48 application form. This can be downloaded from the HM Revenue and Customs website.

There are certain qualification criteria for organizations to use a CFSP.

a) Organizations must be registered as a sole trader, partnership or limited
company and must have an EORI registration against which they declare
imports from outside the EC on a regular basis.
b) Organizations must be financially solvant and have a good compliance record
with Customs and other regulatory bodies.
c) Organizations must have access to an electronic reporting system, be
able to maintain a set of documented procedures which accurately
describes the accounting and logistical processes of the business and
enables Customs (if required) to perform audit-based controls.
d) Organizations must be able to use a duty deferment facility or that of
a third party for payment and security purposes.

Certain categories of goods, such as meat or animal products, which are subject to border health checks, are excluded from the full CFSP procedure.

It is important to remember that Authorized CFSP traders are expected to take full responsibility and complete control over the import of their goods, ensuring all goods are declared accurately and in a timely fashion.

1. Simplified Declaration Procedure (SDP)
SDP is used for releasing goods at the frontier to another customs procedure such as free circulation, IPR (Inward Processing Relief), Processing under Customs Control, End Use, Temporary Imports, movement into a Free Zone or into Customs Warehousing.

This procedure must be used when importing (amongst other items) firearms and licensable weapons as controlled goods, fireworks, hydrocarbon oil products and fresh fruit and vegetables which are subject to CAP licences.

All traders using this procedure must be approved as an Authorized Consignee for Common/Community Transit (CT) or National transit (for UK only movements) and hold a transit guarantee before they can use the LCP. Authorized Consignee status allows traders to nominate their control office as the Office of Destination on the transit movement. The goods don’t have to be physically presented at this office, but it is necessary that all copies of transit documents are lodged with the Office of Destination within one working day of the arrival of the goods at the premises. If traders wish to use CT, they are required to communicate with Customs and end their transit movements electronically on the NCTS (New Computerized Transit System).

When the goods arrive at the frontier, the trader provides minimum details using the Simplified Frontier Declaration (SFD). The trader must allocate a Declaration Unique Consignment Reference (DUCR) to each consignment, which must be entered in box 44 of the SFD and SD (Simplified Declaration)

The SD 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.

2. Local Clearance Procedure (LCP)
This procedure allows traders to remove their goods from the frontier and clear them at a designated premises inland. Please note, however, that to use LCP, the trader needs additional authorization for the transit procedures as well as the authorization for CFSP. In addition, the trader must be authorized to hold a comprehensive guarantee or guarantee waiver to become an authorized consignee.

This procedure cannot be used to import firearms or any licensable weapon, hydrocarbon oil products or fireworks (amongst other items).

On arrival at the frontier, the trader provides minimum details of the shipment using Simplified Frontier Declaration (SFD). The date on the SFD creates the base for a more detailed declaration and also the tax point for paying duty and taxes (unless the goods are entering a Customs warehouse). For controlled goods allowed under this procedure, the trader must present import licences or certificates with the hard copy of the SFD.

Generally speaking, however, most controlled goods cannot be imported under LCP. The exception is with controlled goods where authorization to enter under LCP has been pre-agreed with HM Revenue and Customs

Imports move from the frontier under either the New Computerized Transit System (NCTS) or National Transit. Once the goods have arrived at the designated premises, the transit movement is ended by the trader notifying the NCTS or the CNAT (CFSP National Assurance Team) depending on the type of transit movement used.

Once the goods have arrived and notification has been made the goods are deemed to be in Temporary Storage (TS) and the consignment details are entered into the TS records held by the trader. In most cases, consignments will be assigned immediately to a customs procedure, e.g. free circulation, providing all supporting documentation required under that procedure is available. To ensure the goods are released quickly, the correct customs procedure codes (CPC’s) must be used.

If the documentation is not available, or the trader does not wish to enter the goods immediately, the goods may remain in TS for up to 20 days, by the end of which the goods must be entered to a customs procedure.

If it appears likely that the trader cannot meet this 20 day deadline, then CNAT must be advised no later than 5 days before the 20 day deadline is due to expire, either by e-mail, fax or post. The Trader submits the Supplementary Decarlation (SD) on the import before the end of the 4th working day of the month following the month of acceptance of the SFD.

Maria Narancic from Point to Point Export Services is an independent international trade adviser who assists organisations world wide with their international trade projects, documentation, Documentary Credits and import/export training.  She is based in the United Kingdom.  If you require any further assistance with the matters mentioned above, please do contact us by e-mail on info@point-point.com or check out other international trade articles on the Point to Point Export Services website at www.point-point.com
 

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