Overview
Customs Freight Simplified Procedure (CFSP) is an electronic customs declaration for speeding up the importation of goods. When CFSP goods arrive at a frontier from outside the EU, an initial declaration known as a Simplified Frontier Declaration is submitted by the trader to allow the release of the goods. Subsequently, details of the consignment are sent via a Supplementary Declaration which is sent to HMRC within a set time. It is possible to use CFSP alongside other favourable custom procedures.
In order to operate CFSP, the business or trader must be authorised by HMRC. In order to qualify for use, the business or the agent must have access to the electronic recording system, have a unique trading reference number, have a good record of compliance and be able to use its duty deferment facility HMRC will inspect books, records and procedures to verify that it is appropriate for the procedures.
Under CFSP, a duty deferment account is operated through HMRC. Traders and representatives must pay by the duty deferment account.
HMRC treat goods imported under CFSP in the same way as goods entered under the normal procedures. On arrival in the EU, HMRC may check the goods for any smuggling, animal and plant health standards and other controls.
Eligible Goods
Many products imported into the UK from other EU countries are eligible to use the Custom Freight Simplified Procedure. Certain goods are not eligible. These include goods governed by the Common Agricultural Policy, licensed goods, goods controlled under certain simplified procedures e.g. custom warehousing, inward processing, outward processing relief and goods moving through the UK under community transit.
Most imported goods are eligible for CFSP.Some are excluded. Some customs procedures codes are excluded because of operational and pragmatic issues. They include hydrocarbon oils
- ATA carnet goods
- goods removed from a customs warehouse that are exported
- personal effects
2016 Updates
The customs freight simplified declaration procedure was updated following the EU’s revised customs regulations made in 2013 which became effective in 2016.
There are now two types of authorisation. The simplified declaration procedure allows release of goods at the frontier to most custom procedures.
The local clearance procedure is renamed Entry in the declarants’ records (EIDR) procedure. The declaration is made in the trader’s records directly rather than to HMRC and they are thereby released to a customs procedure.
CFSP Declaration Procedure
There are two ways that agents can use the CFSP procedure, the declaration procedure and local customs clearance(Now EIDR; See below). Once goods reach the frontier, they may be released into free circulation or into another customs process, inward processing relief, processing under customs control, inward or outward processing relief, a free zone or customs warehousing.
The CFSP is carried out in two stages.
Stage 1 – trader provides minimum details of the consignment to the frontier using a simplified frontier declaration (SFD). This creates a basis for submitting a further more detailed supplementary declaration.
Stage 2 – trader submits the supplementary declaration of import before the end of the fourth working day of the month following the date of acceptance.
Controlled goods are subject to additional procedures.
Simplified Declaration
A simplified declaration procedure can be used to release goods to
- free circulation
- customs warehousing at the frontier
- declarations from CW to OSR
- certain other procedures.
In some cases, the declaration may be made without documentation which is not available at the time of submission.When goods are released from customs warehouse to OS for an SDI return must be made containing the required OSR information
To enter goods to free circulation and certain other processes, a simplified frontier declaration embodying minimum information is required at the frontier. A declaration unique consignment reference (DUCR) is required. It must be entered on the simplified frontier declaration and the supplementary declaration. The acceptance of the SFD establishes the tax point and base date for submission of the SD.
It is made by electronic message sent to CHIEF with the fiscal and statistical information. The supplementary declaration must be sent to and accepted by CHIEF by the end of the fourth day of the month following acceptance of the SFD.
Simplified frontier declaration (post 2016 Revisions)
With the customs freight simplified procedure, the simplified frontier declaration is submitted to CHIEF electronically. A hard copy may be required at ports and airports that are not electronically linked to CHIEF. Under the simplified frontier declaration, the acceptance date and time is the base date and for some customs procedures establishes the tax point
The simplified frontier declaration is accepted and processed sing direct trader input (DTI) or other infrastructure. The extent of data required depends on the commercial procedure and the simplified procedure used.
CHIEF performs validation checks on frontier declarations. Immediate clearance is usually given through CHIEF, subject to anti-smuggling checks and certain other product specific controls
Controlled goods may only be released from the frontier using procedures for those goods. Further boxes on the form may be required to be completed on the simplified frontier declaration form with certain exceptions. EIDR may not be used to release controlled goods at the frontier. They may be later released from warehousing and free zones using EIDR.
Excise goods are subject to special controls
CFSP Local Clearance Procedure (Now EIDR)
Under this procedure, the Community Transit or National Transit procedures may be used to move the goods from the frontier to a designated inland premises. It is necessary to have an additional authorisation for transit procedures as well as authorisation for CFSP. The trader must be authorised and must hold a comprehensive guarantee or guarantee waiver and an authorised consignee. The transit procedure is discharged on arrival at inland premises, after which goods may stay in temporary storage for up to 20 days.
Traders can use LSP to release goods to customs procedure in five stages:
Stage one: Trader provides minimum details of the consignment to CHIEF at the frontier.
Stage two: Trader uses Community or National Transit procedure to move the goods to designated inland premises.
Stage three: Trader uses local clearance to enter goods to a customs procedure.
Stage four: Traders submit a supplemental declaration before the end of the fourth working day of the following month.
Stage five: Unless goods are re-entered traders submit the final supplementary declaration before the end of the fourth day of the working month.
EIDR
From 1 May 2016 this is the new name for the local clearance procedure EIDR special procedures transfers. There is a slight change in the processes for which EIDR is available
EIDR may be used to release goods to a customs procedure at an authorised location or at the frontier. Goods can be moved under the community transit system provided the trader has permission to use that system. The national transit procedure is no longer available
A DUCR number is assigned to each consignment and entered in the the entry in the records and in the supplemental declaration
Under EIDR goods are released from a manifest/inventory using form C 21 and may be put into a frontier temporary storage premises. They may be removed from the frontier under NCTS or transfer into TS records to an inland authorised TS location. They are declared to customs procedure using EIDR prior to the end of the TS period which is usually 90 days.
EIDR can be used to move goods between special procedures subject to specific conditions. The goods must previously have been entered into the first special procedure and then discharged and moved to a subsequent special procedure. Provided the holders of both special procedures are the same persons the first special procedure was entered by a full declaration or had a supplementary declaration the first special procedure is discharged by placing the goods under the second procedure.
Supplemental Declaration
To allow import goods at the frontier, it is necessary to submit a clear SFD via customs handling and import and export freight system (CHIEF). The Supplemental Declaration must be submitted by the prescribed deadline. This is usually the fourth working day of the month following the date of acceptance of the SFD. This is treated as equivalent to the SAD.
The effect of CFSP is that duty on imports becomes due later in the process. The SFD and SD can be submitted by the importer directly or by an agent. SD can be submitted electronically and the amount of duty and taxes are notified by a Customs response message.
Supplemental Declaration (post 2016 Revisions)
A supplementary declaration is required to CHIEF. It may include more than one simplified frontier declaration. CHIEF responds with a message giving the calculated revenue.
Aggregation permits the combination of simplified declarations containing the same classification level data into a single customs declaration over a period. Authority must be obtained to use aggregation. A single rate of exchange may be permitted in respect of a ten-day period. There are conditions for approval.
Supplementary declarations are submitted to CHIEF. The supplementary declaration contains the normal single administrative document information together with details of the time and date of the associated simplified frontier declaration or EIDR.
Making the SD
The supplementary declaration must be sent and accepted by CHIEF by the end of the fourth working day of the month following the date of the simplified frontier declaration or EIDR.
Batches can be submitted containing declarations for different periods.There are limitations on the size of data submitted.
Excise goods are subject to a different accounting period. There are two accounting periods on the 15th and 29th of each month; excise on the 29th of the month and customs duty and VAT on the 15th. The date runs from the base date established as above
The clearance time for supplementary declarations is approximately 10 minutes if the declaration is not amended or cancelled The record is finalised . Adjustments may be required in the event of an error.
If a trader is not able to submit the declarations by the due date, it may advise HMRC who may accept incomplete particulars and payments. The account is debited with an adjustment for any refund due. A failure to pay on time may incur a civil penalty penalty
A final supplementary declaration is required by the fourth day of the month following showing the number of SDI and SDW due or submitted in the period. It may be used to declare late declarations from previous periods.
For excise goods a supplementary return is required by the fourth working day following the end of each excise period.
Accounting for Tax
Traders must pay duty using a duty deferment account. The procedure uses an electronic declaration through CHIEF.
Customs charges are accounted for and payment is made through a deferred account, secured by a comprehensive guarantee The account may be that of the trader or an agent. The deferment account must be sufficient to cover the duty and VAT liability for at least a month.Security is required .
This must cover duty and VAT unless the trader is approved for the simplified import VAT accounting (SIVA) and / or the excise payment security system.
Traders may represent themselves or may be represented by a third party acting in their name and on their behalf. The authorised importer is responsible for the customs debt.
A trader may be indirectly authorised in which case the importer and authorised third-party are jointly and severally liable to HMRC for a customs debt.An agent (and indirect representative may have its own account or a customer’s duty deferment account
Eligibility
To be eligible for Customs freight simplified procedures a trader must
- have a good record of compliance in VAT returns customs requirements
- duty deferment
- intrastat submissions
- maintain a regular pattern of third country declarations against economic operator registration identification number
- hold authorisations for any other requisite customs procedures desired to be used with CFSP
- notify changes to customs
- maintain the requisite documented procedures
- describing controls audit Trail recovery retrieval of records
- calculated revenue due and report it in accordance with the integrated tariff
- report errors promptly
- hold requisite records and declarations
- maintain systems in support of records
- keep linking records and declarations such as to allow sufficient controls
- keep archives for four years plus and make them available
- allow for customs audit
- comply with all requisite EU and UK customs legislation
Authorisation Conditions
The authorisation will include criteria and conditions depending on the nature of the arrangement. In the case of EIDR this may include
- suitable facilities for unloading examining sampling clearing goods
- provision of safe working conditions for customs staff attending premises
- provision of all necessary equipment for weighing measuring et cetera
- have the requisite guarantees
- be approved as an authorised consignee
- move goods under NCT from frontier to authorised location without delay
- nominate competent person to examine all vehicles arriving
- reconcile records with receipts and investigate differences promptly
- notify customs of any discrepancies
Further Conditions
There are separate and further controls in respect of entities permitted to remove from customs warehousing using EIDR including
- authorised customs warehousekeeper of a certain type
- have the mechanisms to use EIDR at the authorised presmies
- notifies warehousekeeper of removals in certain cases
- promptly undertake all reporting of simplified declarations and supplementary declarations
There are criteria for a trader using a third-party service provider as an indirect representative
There are further specific requirements in respect of release from simplified declaration procedure to
- specified warehousing including release to customs warehousing
- release to a free zone
- entry into temporary storage premises after EIDR
- removal from customs warehousing
- release into free circulation
- release of controlled goods and excise goods/
Supporting Documents
In the case of entry in the declarant’s records (EIDR) supporting documents are not usually required at the frontier. They must be made available to customs if required upon the release of the goods at the authorised location The certificates and licenses must be entered in the returns
Details including serial numbers of supporting documents
- documentary proofs of origin and preference
- certificates of conformity
- phytosanitary serts
- release certificates
must be retained and endorsed with the UCR ((unique consignment number).
