CUSTOMS AND EXCISE Citation and Commencement 1 These regulations may be cited as the Export (Penalty) Regulations 2003 and shall come into force on 23 December 2003. Interpretation 2 In these regulations— ... “ appeal tribunal ” means the First-tier Tribunal or, where determined by or under Tribunal Procedure Rules, the Upper Tribunal ; ... “ the Code ” means Regulation ( EU ) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code” ; ... ... “ contravene ” includes fail to comply with; “Delegated Regulation” means Commission Delegated Regulation ( EU ) 2015/2446 of 28 July 2015 supplementing the Code as regards certain provisions of the Code; “declaration” means a customs declaration, as defined in Article 5(12) of the Code. “ demand notice ” means a demand notice within the meaning of regulation 6; “export” means that “customs procedure” within the meaning as given by Article 5(16)(c) of the Code; “ exporter ” has the meaning assigned to it by Article 788 of the Implementing Regulation; “ HMRC ” means Her Majesty’s Revenue and Customs. “ the Implementing Regulation ” means Commission Implementing Regulation ( EU ) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation ( EU ) No 952/2013 of the European Parliament and of the Council laying down the Code ; “ notice ” means notice in writing; “ person ” means a person, of a description specified in Column 2 of the Schedule to these Regulations to whom that provision referred to in Column 1 applies; “ penalty ” shall mean a penalty up to the maximum amount specified in Column 3 of the schedule to these Regulations; “ relevant export rule ” shall mean any EU-imposed duty, obligation, requirement, or condition in relation to export imposed or implemented by or under any of the following provisions or combination of provisions in any case where Union export duty is not chargeable or payable in application of the rule— Union customs legislation in relation to export; the Act, as it applies in implementation of Union customs legislation in relation to export from the European Union ; any other Act, or statutory instrument, as it applies in implementation of Union customs legislation in relation to export from the European Union ; any directly applicable EU legislation as it applies in application of Union customs legislation in relation to export; any relevant international rules applying in relation to export; specified in Column 1 of the Schedule to these Regulations; “ relevant international rules ” means international agreements so far as applying in relation to export from the European Union and having effect as part of the law of the United Kingdom by virtue of— any directly applicable EU legislation, or any Act or statutory instrument implementing such agreement. “ representative ”, in relation to any person, means— his personal representative, his trustee in bankruptcy or interim or permanent trustee, any receiver or liquidator appointed in relation to that person or any of his property, or any other person acting in a representative capacity in relation to that person. ”Union customs legislation” means customs legislation, as defined in Article 5(2) of the Code; “Union export duty” means export duty, as defined in Article 5(21) of the Code; Penalty for contravention of a relevant export rule 3 1 If a person engages in any conduct by which he contravenes a relevant export rule specified he shall be liable to a penalty under this regulation. 2 The Schedule to these regulations shall have effect. 3 Column 1 of the Schedule specifies a relevant export rule a contravention of which gives rise to a penalty under paragraph (1) above. 4 Column 2 of the Schedule specifies the person whose conduct in contravening a relevant export rule gives rise to liability under paragraph (1) above. 5 Column 3 of the Schedule specifies the maximum penalty for contravention of a relevant export rule for which a person is liable under paragraph (1) above. Exceptions from regulation 3 4 1 A person is not liable to a penalty under regulation 3 if he satisfies— a HMRC , or b on appeal, an appeal tribunal, that there is a reasonable excuse for his conduct. 2 For the purposes of paragraph (1) above none of the following is a reasonable excuse— a An insufficiency of funds available to any person for paying any penalty due; b That reliance was placed by any person on another to perform any task; c That the contravention is attributable, in whole or in part, to the conduct of a person on whom reliance to perform any task was so placed. 3 Where, by reason of conduct falling within regulation 3(1) a person is prosecuted for an offence that conduct does not also give rise to liability to a penalty. Reduction of penalty under regulation 3 5 1 Where a person is liable to a penalty under regulation 3— a HMRC (whether originally or on review) or, on appeal, an appeal tribunal may reduce the penalty to such amount (including nil) as they think proper; and b HMRC on a review, or an appeal tribunal on an appeal, relating to a penalty reduced by HMRC under this regulation may cancel the whole or any part of the reduction previously made by HMRC . 2 In exercising their powers under paragraph (1) above, neither HMRC nor an appeal tribunal are entitled to take into account any of the matters specified in paragraph (3) below. 3 Those matters are— a The insufficiency of the funds available to any person for paying the amount of the penalty, b The fact that the person liable to the penalty, or a person acting on his behalf, has acted in good faith. Demands for penalties 6 1 Where a person is liable to a penalty under regulation 3, HMRC may give to that person or his representative a notice in writing (a “demand notice”) demanding payment of the amount due by way of penalty. 2 An amount demanded as due from a person or his representative in accordance with subsection (1) is recoverable as if it were an amount due from the person or, as the case may be, the representative as an amount of customs duty. This paragraph is subject to— any appeal under regulation 9 (appeals to tribunal); and paragraph (3) below. 3 An amount so demanded is not recoverable if or to the extent that— a The demand has subsequently been withdrawn; or b The amount has been reduced under regulation 5. Time limits for demands for penalties 7 1 A demand notice may not be given in relation to a penalty under regulation 3 more than 3 years after the conduct giving rise to the penalty ceased. 2 A demand notice may not be given more than 2 years after there has come to the knowledge of HMRC evidence of facts sufficient in the opinion of HMRC to justify the giving of the demand notice. 3 A demand notice may be given in respect of a penalty under regulation 3 to which a person was liable immediately before his death. No prosecution after demand notice for penalty under regulation 3 8 1 Where a demand notice is given demanding payment of an amount due by way of penalty under regulation 3 in respect of any conduct of a person, no proceedings may be brought against that person for any offence constituted by that conduct (whether or not the demand notice is subsequently withdrawn). Right to appeal against certain decisions 9 1 If HMRC give a person or his representative a notice informing him— a that HMRC have decided that the person has engaged in conduct by which he contravenes a relevant export rule, and b that the person is, in consequence, liable to a penalty under regulation 3, but c that HMRC do not propose to give a demand notice in respect of the penalty, the person or his representative may make an appeal to the appeal tribunal in respect of the decision mentioned in sub-paragraph(a) above. 2 Where HMRC give a demand notice to a person or his representative, the person or his representative may make an appeal to the appeal tribunal in respect of — a their decision that the person is liable to a penalty under regulation 3, or b their decision as to the amount of the liability. 3 The powers of the appeal tribunal on an appeal under this regulation include— a power to quash or vary a decision; and b power to substitute the tribunal’s own decision for any decision so quashed. 4 On an appeal under this regulation— a the burden of proof as to the matters mentioned in regulation 3(1) lies on HMRC ; but b it is otherwise for the appellant to show that the grounds on which any such appeal is brought have been established. Offer of review 9A 1 HMRC must offer a person (P) a review of a decision that has been notified to P if an appeal lies under regulation 9 in respect of the decision. 2 The offer of the review must be made by notice given to P at the same time as the decision is notified to P. 3 This regulation does not apply to the notification of the conclusions of a review. Review by HMRC 9B 1 HMRC must review a decision if— a they have offered a review of the decision under regulation 9A, and b P notifies HMRC accepting the offer within 30 days from the date of the document containing the notification of the offer. 2 But P may not notify acceptance of the offer if P has already appealed to the appeal tribunal under regulation 9F. 3 HMRC shall not review a decision if P has appealed to the appeal tribunal under regulation 9F in respect of the decision. Extensions of time 9C 1 If under regulation 9A, HMRC have offered P a review of a decision, HMRC may within the relevant period notify P that the relevant period is extended. 2 If notice is given the relevant period is extended to the end of 30 days from— a the date of the notice, or b any other date set out in the notice or a further notice. 3 In this regulation “relevant period” means— a the period of 30 days referred to in regulation 9B(1)(b), or b if notice has been given under paragraph (1) that period as extended (or as most recently extended) in accordance with paragraph (2). Review out of time 9D 1 This regulation applies if— a HMRC have offered a review of a decision under regulation 9A, and b P does not accept the offer within the time allowed under regulation 9B(1)(b) or 9C(2). 2 HMRC must review the decision under regulation 9B if— a after the time allowed, P notifies HMRC in writing requesting a review out of time, b HMRC are satisfied that P had a reasonable excuse for not accepting the offer or requiring review within the time allowed, and c HMRC are satisfied that P made the request without unreasonable delay after the excuse had ceased to apply. 3 HMRC shall not review a decision if P has appealed to the appeal tribunal under regulation 9F in respect of the decision. Nature of review etc 9E 1 This regulation applies if HMRC are required to undertake a review under regulation 9B or 9D. 2 The nature and extent of the review are to be such as appear appropriate to HMRC in the circumstances. 3 For the purpose of paragraph (2), HMRC must, in particular, have regard to steps taken before the beginning of the review— a by HMRC in reaching the decision, and b by any person in seeking to resolve disagreement about the decision. 4 The review must take account of any representations made by P at a stage which gives HMRC a reasonable opportunity to consider them. 5 The review may conclude that the decision is to be— a upheld, b varied, or c cancelled. 6 HMRC must give P notice of the conclusions of the review and their reasoning within— a a period of 45 days beginning with the relevant date, or b such other period as HMRC and P may agree. 7 In paragraph (6) “relevant date” means— a the date HMRC received P’s notification accepting the offer of a review (in a case falling within regulation 9A), or b the date on which HMRC decided to undertake the review (in a case falling within regulation 9D). 8 Where HMRC are required to undertake a review but do not give notice of the conclusions within the time period specified in paragraph (6), the review is to be treated as having concluded that the decision is upheld. 9 If paragraph (8) applies HMRC must notify P of the conclusion which the review is treated as having reached. Bringing of appeals 9F 1 An appeal under regulation 9 is to be made to the appeal tribunal before— a the end of the period of 30 days beginning with the date of the document notifying the decision to which the appeal relates, or b if later, the end of the relevant period (within the meaning of regulation 9C). 2 But that is subject to paragraphs (3) to (5). 3 In a case where HMRC are required to undertake a review under regulation 9B— a an appeal may not be made until the conclusion date, and b any appeal is to be made within the period of 30 days beginning with the conclusion date. 4 In a case where HMRC are requested to undertake a review in accordance with regulation 9D — a an appeal may not be made to an appeal tribunal— i unless HMRC have notified P as to whether or not a review will be undertaken, and ii if HMRC have notified P that a review will be undertaken, until the conclusion date; b any appeal where sub-paragraph (a)(ii) applies is to be made within the period of 30 days beginning with the conclusion date; c if HMRC have notified P that a review will not be undertaken, an appeal may be made only if the appeal tribunal gives permission to do so. 5 In a case where regulation 9E(8) applies, an appeal may be made at any time from the end of the period specified in regulation 9E(6) to the date 30 days after the conclusion date. 6 An appeal may be made after the end of the period specified in paragraph (1), (3)(b), (4)(b) or (5) if the appeal tribunal gives permission to do so. 7 In this regulation “conclusion date” means the date of the document notifying the conclusions of the review. Time limit and right to further review 10 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Powers of the Commissioners on a review 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeals to a tribunal 12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Appeal Tribunals 13 Section 85 of the Value Added Tax Act 1994 (c. 23) (settling of appeals by agreement) has effect as if the reference to section 83 of that Act included a reference to regulation 9 above. Service of notices 14 Any notice to be given to any person for the purposes of these Regulations may be given by sending it by post in a letter addressed to that person or his representative at the last or usual residence or place of business of that person or representative. Ray McAfee Commissioner of Customs and Excise