ISSN 1175-396X
14B
CUSTOMS FACT SHEET
» IMPORTANT INFORMATION
ADMINISTRATIVE PENALTIES
– ENTRIES MADE ON OR AFTER
6 APRIL 2012
The New Zealand Customs Service can impose a monetary penalty on anyone who makes an
entry containing an error or omission.
WHAT IS THE PURPOSE OF
ADMINISTRATIVE PENALTIES?
WHAT HAPPENS IF AN ERROR OR
OMISSION IS FOUND?
Part 10 (sections 128 to 130) of the
Customs and Excise Act 1996 (the Act)
contains legislative provisions designed
to reduce errors and omissions on
entries. Anyone who makes an entry
could be liable to an administrative
penalty if it has certain types of errors
or omissions.
If an entry contains an error or
omission that causes a shortfall in
duty or makes it materially incorrect, a
penalty notice may be issued.
Administrative penalties are designed
to ensure data integrity and encourage
compliance, reasonable care, self
assessment and voluntary disclosure
of errors.
Customs relies on those making an entry
to ensure that it is correct and complete.
This is important because errors and
omissions can:
» cause incorrect duty payments
» impact on the Crown’s revenue
» result in incorrect data being used
for risk management
» affect the integrity of the data on
which trade and industry relies
» impact on the effectiveness of
industry assistance policies at the
border.
The notice will be given in writing to the
person that made the entry. This could
be the exporter, importer, licensee, and/
or their agent, and/or the declarant,
and/or their employer.
The penalty must be paid within 20
working days after the date of issue
of the penalty notice.
WHAT ENTRIES ARE SUBJECT TO
ADMINISTRATIVE PENALTIES?
Entries include import and export
entries, entries seeking drawback, excise
entries and other documents that need
to be lodged to clear low value import
and export consignments.
» For any imported goods that are
deemed to have been entered
without an import entry being made,
a document that is required to be
lodged with Customs before the
goods will be deemed to be entered
» For any exported goods or goods
that are to be exported that are
deemed to have been entered
without an export entry being made,
a document that is required to be
lodged with Customs before the
goods will be deemed to be entered.
WHAT IS THE AMOUNT OF THE
ADMINISTRATIVE PENALTY?
If an error or omission has resulted
in Customs duty not being paid or
declared, the penalty is the greater
amount of either $200 or an amount
equal to:
» an entry required under the Act
» 20 percent of the unpaid or
undeclared duty, where the person
did not take reasonable care, or
» every declaration, invoice, certificate,
written statement, or other
document required or authorised
by or under the Act to be made or
produced by a person making the
entry
» 40 percent of the unpaid or
undeclared duty, where the person
was grossly careless, or
» 100 percent of the unpaid or
undeclared duty, where the error or
omission was made knowingly.
» every amendment of the entry
The maximum penalty that may be
imposed is $50,000.
An entry is:
Issue date August 2013
CUSTOMS FACT SHEET 14B
Customs duty includes duty under the
Tariff Act, excise and excise equivalent
duty, anti-dumping duty, Goods and
Services Tax (GST) and any levies
payable under the Act.
The same penalty structure applies to
an export entry seeking drawback which
is materially incorrect, by reference to a
percentage of the excess drawback paid
or claimed.
If the error or omission does not relate
to the payment or drawback of duty,
a fixed penalty of $200 per entry will
apply.
IS EVERY ERROR OR OMISSION
LIABLE TO A PENALTY?
No. Only those errors or omissions on
entries that cause a shortfall in duty,
or which are materially incorrect, are
subject to penalty.
WHAT IS THE DEFINITION OF
MATERIALLY INCORRECT?
For an entry under section 39 of the
Act, materially incorrect means that the
entry contains an error or omission in
relation to any of the following matters:
i.
the overseas supplier’s identity
ii.
the importer’s identity
iii. the identity of the person making
the entry
iv. the identification of the importing
craft or its voyage number
v.
the bill of lading, air waybill, or
container identification details
vi. the supplier’s invoice number
vii. any permit number or code
viii. the Tariff item in which the goods
are classified under the Tariff Act
1988
xiii. the country of origin of the goods
xiv. the country from which the goods
have been exported
xv. the amount paid or payable to
transport the goods to New Zealand
from the country of exportation,
including any amount paid or
payable for internal transportation
of the goods in that country
xvi. the insurance costs associated
with transporting the goods to
New Zealand, inclusive of any
insurance costs in the country
of exportation.
For an entry under section 49 of the
Act for goods for which drawback of
duty may be allowed, materially incorrect
means that the entry contains a material
error or omission in relation to a matter
the entry is required to address.
For an entry not under section 39 or 49
of the Act, materially incorrect means
that the entry contains a material error
or omission in relation to a matter the
entry is required to address.
WHAT ERRORS ARE EXEMPT FROM
PENALTY?
A person is not liable to an
administrative penalty in the following
circumstances:
(a) Voluntary disclosure
The error or omission is voluntarily
disclosed to Customs, before Customs
notifies the person that, in relation to
the relevant entry, it:
(i) has selected the goods for
examination
(ii) requires documentation to be
presented
ix. the statistical quantity of the goods
(iii) intends to conduct an audit or
investigation.
x.
(b) Reasonable view of facts
the currency code for the currency
in which the goods are traded
xi. the value for duty expressed in the
currency in which the goods are
traded
xii. the value for duty expressed in
New Zealand currency
The person satisfies the Chief Executive
of Customs that they formed a view as
to the relevant facts relating to the entry,
which, while incorrect, was reasonable,
having regard to the information
available to that person when the entry
was prepared.
Administrative Penalties – Entries On or After 6 April 2012
(c) Reasonable reliance on
information from importer or
supplier
The person satisfies the Chief Executive
of Customs that he or she acted in
good faith on information provided by
the importer, exporter or supplier of
the goods, and reliance on the accuracy
or completeness of the information
provided was reasonable in the
circumstances.
(d) Prosecution initiated
An information for an offence against
the Act has been laid in relation to
the error or omission. (Similarly, if an
administrative penalty has been paid, the
person is not liable to prosecution for
an offence in relation to that error or
omission.)
(e) Entry more than four years old
The period between the date of
lodgement of the entry and the date on
which the error or omission was first
identified exceeds four years.
(f) Reliance on Customs Ruling
The person shows that they relied on a
Customs Ruling relating to the relevant
matter that was current at the time the
entry was made.
WHAT HAPPENS IF THE PENALTY
IS NOT PAID?
If the penalty is not paid by the due
date, additional penalties are imposed.
The additional penalties are:
» 5 percent of the penalty if unpaid by
the due date
» 2 percent of the penalty, including
any additional penalty, if unpaid
within one month after the due date,
» 2 percent of the penalty, including
any additional penalties, if unpaid at
the end of each subsequent period
of a month.
Issue date August 2013
2
CUSTOMS FACT SHEET 14B
CAN A PENALTY NOTICE BE
REVIEWED?
CAN I APPEAL A CUSTOMS
DECISION?
Yes. A request for review must be
submitted in writing within 20 working
days after the date of issue of the
penalty notice. The request should
include reasons why the penalty should
be removed.
Yes. A person who is dissatisfied with
Customs’ decision to impose a penalty,
the calculation of the penalty amount,
or a decision on a penalty review, may
appeal to a Customs Appeal Authority
within 20 working days after the decision
notice is given to that person.
It is important to note that the applicant
is still required to pay the penalty. If
the outcome of the review is a decision
that the penalty should not have been
imposed, the full amount of the penalty
paid will be refunded together with
interest.
Requests for review should be sent to:
Administrative Penalties Reviews
Legal Services
NZ Customs Service
PO Box 29
Shortland Street
AUCKLAND 1140
Email: [email protected]
The review will be conducted by a
Customs officer with the necessary
delegated powers who was not
responsible for issuing the penalty.
FOR FURTHER INFORMATION
Visit the Customs website
www.customs.govt.nz, contact your
nearest Customs office, or call
Customs on 0800 428 786
(0800 4 CUSTOMS).
It is important to note that the applicant
is still obliged to pay the penalty. If the
outcome of the appeal is a decision
that the penalty should not have been
imposed, the full amount of the penalty
paid will be refunded together with
interest.
The Notice of Appeal must be
submitted using Form 14. This is
available in Schedule 2 of the Customs
and Excise Regulations 1996 or on the
Customs website www.customs.govt.nz.
The Notice of Appeal, together with the
filing fee of $410, should be sent to:
The Registrar,
Customs Appeal Authority,
Tribunals Unit,
Ministry of Justice,
Private Bag 32001,
Panama Street,
Wellington 6146.
Office of the Comptroller of Customs, PO Box 2218, Wellington
Phone: +64 4 901 4500 » Fax: +64 4 901 4555 » www.customs.govt.nz
ISSN 1175-396X
Administrative Penalties – Entries On or After 6 April 2012
Issue date August 2013
3