Penalty Notice System

Administrative Penalties for Non-Compliance
Corporate Services Audit & Compliance Admin Penalities Penalty Notice System

Customs can apply administrative penalties for non-compliance with Customs legislation in relation to the provision of false or misleading statements.

Two Enforcement Options: Customs now has two options if it decides to pursue enforcement action:

  1. Prosecution
  2. Issue a notice under the Administrative Penalties Scheme

Customs will consider which sanction is the best means of achieving future compliance.

Types of Sanctions Available

Sanction Description
Warning Letters Formal written warnings for minor or first-time non-compliance.
Imposition of Penalties
  • 50% to 200% of the duty unpaid, not declared, or attempted to be avoided.
  • Where goods are exempt, free, or zero-rated from duty: a penalty of not more than 5% of the value of the goods.
Prosecution Action In some cases, Customs may also prosecute in addition to imposing a penalty.
Removal from Self-Assessment Removal from, or modification to, the self-assessment benefit by examining and verifying each transaction – which may result in delays in clearing goods.
Cancellation or Suspension of Licences Cancellation or suspension of Customs licences for clients (e.g., Customs Agents, warehouse operators).

Frequently Asked Questions

FAQ 1: Can a penalty be remitted or withdrawn?

Who Can Apply? A person to whom a penalty notice has been issued.
How to Apply? Lodge an application in writing with Customs, via the Regional Director in your region.
What to Include?
  • Your reasons for seeking remittance or withdrawal
  • Supporting evidence
Timing Application must be lodged within 30 days of the penalty notice being issued.
Payment Requirement Such application may only be made after the penalty amount has been paid.
Consequences of Non-Compliance Failure to comply with these requirements will be grounds for your application to be refused.
Decision A Customs delegate will consider each case on its merits and will advise you in writing of the decision.

FAQ 2: What if a penalty notice is not remitted or withdrawn and I still disagree?

Appeal to Commissioner-General You may appeal directly to the Commissioner-General by using the appeal mechanisms under Sections 177 and 178 of the Customs Act.
Appeal to National Court Alternatively, you may choose to lodge an appeal in the National Court.

FAQ 3: What happens if I don't pay?

Consequences of Non-Payment
False/Misleading Statement Resulting in Duty Loss The lost duty must be paid in addition to the penalty imposed.
Refusal to Pay The amount of duty lost, together with the penalty, will become a debt to the State. Customs will pursue the debt through the Courts.
Subsequent Importations/Exportations Customs may refuse to clear any subsequent importations or exportations.
Seizure and Sale of Goods In certain cases, Customs may seize your goods and sell them to pay off the debt.

Compliance Checklist – How to Avoid Penalties?

Here's a simple checklist to ensure compliance with Customs requirements and avoid the imposition of a penalty:

Have you consulted with your service providers (e.g., your Customs Agent) or with Customs to verify that the tariff classification, tariff treatment, and valuation of the goods you import and export are in accordance with the requirements of the Customs Act?

Can you produce to Customs sufficient documents and supporting information, including certificates of origin, that we need to verify your import and export transactions?

Have you ensured that your imported and exported goods comply with the requirements of other agencies (e.g., NAQIS, Police, Censorship Board, CITES)? Do you have all the necessary licences and permits?

Are there systems links between your Customs documents and your purchasing, receiving, vendors' invoice, and payables processes? Have you documented these processes to identify any shortcomings?

Have you verified the links between your Customs documents and your accounting systems and procedures? In other words, have you selected a representative sample and conducted an audit?

Have you determined your current level of compliance as well as that of your service providers? Have you identified any shortcomings in your systems or processes that you need to address?

Do you have a plan to address any shortcomings you identified in your systems or processes?

Does your plan include a strategy for monitoring compliance over time?

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