Following is an article I had published in Lloyds List in June 2016
The old administrative penalty scheme allowed people to avoid an administrative penalty for a false or misleading statement resulting in an underpayment of duty by stating their uncertainty as to the correctness of certain information, and their reasons for that uncertainty, at the time of lodgement of the import entry. Industry referred to this as ‘amber line’.
Under the current legislation, ‘amber line’ has been retained and appears in Customs Act subsections 243T (5) and (6) as exceptions to the strict liability offence for false statements resulting in a loss of duty. The rationale for keeping the provision is because the penalty is directly related to the amount shortpaid and has no maximum limit.
It should be noted however that amber line is only available in respect of false or misleading statements that may result in a loss of duty. It cannot be used for exports or for imports where the statement does not result in loss of duty or in cargo reports or outturn reports.
The most important matter of which to be aware when considering sending a FID ‘amber line’ is that amber line no longer provides protection from penalties being imposed after goods have been cleared.
Inputting “amber line” statements on FIDs.
Section 243U provides that a person lodging an ‘amber line’ FID must make a statement that is similar to the following:
“In accordance with subsection 243T (5) of the Customs Act 1901, I am uncertain as to information pertaining to [describe information, e.g., classification] in lines [ ] and consider that as a result of including that information, this statement might be false or misleading in a material particular. I am uncertain as to the information for the following reasons [ ].”
The import declaration provides a field for amber line statements to be made. If you are lodging electronically direct into the ICS, you can access an amber continuation screen by pressing <enter> with a blank control field and an amber statement continuation screen will be displayed. If there is insufficient space on the statement for all the grounds for the uncertainty to be detailed, an attachment should be attached to the entry, which will probably be redline. This attachment should:
- be on company or agency letterhead
- specify the number of the and line numbers covered
- identify the uncertainty or omission
- give reasons or grounds for that uncertainty and
- be signed by the owner of the goods or their agent.
Authority to deal and an exception to 243T
Please carefully note that DIBP advice, after lodging amber line, that the goods are available for payment, or may be delivered, does not mean that the criteria in subsection 243T (5) or (6) have been accepted as met because DIBP may continue to investigate the matter. FIDs with amber statements are generally automatically set to a HOLD status and DIBP can request further documentation or arrange for the goods to be examined before providing an authority to deal. The provision of an authority to deal after verifying the particulars of an amber line entry also does not guarantee the criteria in the legislation have been met in order to avoid a penalty.
If after review and whether or not an authority to deal has been issued, DIBP consider that a false statement is serious enough to warrant consideration for an infringement notice, a delegate of the CEO will then examine the matter to ascertain, among other considerations, if the criteria in subsection (5) or (6) have been satisfied.
It is therefore important that brokers are aware that the amber line does not provide protection from penalty. If a FID is to be lodged amber line they should ensure they have met the criteria contained in subsection 243T (5) or (6), and that any necessary post warrant amendments are entered and paid in a timely and accurate manner.
Importantly, DIBP require that if uncertainty exists, reasonable inquiry has been undertaken to clarify the matter before lodging ‘amber line’ , which effectively means that if, for example, you are uncertain of tariff classification or the application of a particular TCO , lodge an application for tariff ruling before lodging the FID in preference to lodging it amber. A TA should provide protection against penalty, provided any posts required after the decision are lodged in a timely manner. Amber line does not provide a similar protection.