The Union Customs Code (UCC), which was introduced across the European Union on May 1, includes rules that can be used to tighten up the payment of customs duties and value-added taxes.

In its latest annual report , the European Commission showed that the difference between VAT due and collected amounted to 168 billion euros.

The British International Freight Association (BIFA) says that UK Revenue and Customs is placing ever-increasing emphasis on compliance and stricter enforcement. BIFA is the trade association for over 1,500 UK freight forwarding and logistics companies.

In December 2015, UK Customs raided warehouses which it was believed contained goods supplied by overseas online traders that were being sold in the UK without VAT being paid or accounted for. Goods worth many hundreds of thousands of pounds were seized during the raids.

Large internet traders have been publicly scrutinized and demands have been made that Amazon become liable for the unpaid VAT of thousands of customers. Customs has been heavily criticized for failing to take adequate steps to stamp out non-compliance.

Throughout the EU there is a move towards looking at whether third parties can be held liable for the VAT failings of their customers. Freight forwarders and logistics providers, due to their role, are obvious targets as they facilitate trade across frontiers, provide warehousing and clear goods through customs. Authorities increasingly consider that these providers have an obligation to be aware of the tax status of their customers.

“BIFA always advises that forwarders should know their customer and carry out reasonable checks on them,” said Robert Keen, BIFA’s director general.

The Union Customs Code includes a number of elements which may be used by customs authorities as part of their clampdown. One is that all warehouse operators under the UCC will be required to provide guarantees on the import duty payable. Another is that if there is no EU-based company to take responsibility for the import customs declaration the forwarder will become fully responsible for the accuracy of the customs declaration and any debts.

BIFA recommends that forwarders always carry out due diligence checks on new customers and to pay particular attention where importers are non-EU based online retailers.

“Business has and is continuing to change and it is very clear that the opportunity for fraud is rapidly increasing,” said Keen. “Asking relevant questions will likely result in those engaged in fraud to look to less diligent partners with whom to conduct business.”