Our Trade, Industry and Logistics team regularly publishes articles as part of the series “Ten Frequently Asked Questions About…”. Through this series, we aim to provide accessible and practical information on specific legal concepts, topics and current developments. Should you have an eleventh question after reading these ten frequently asked questions, we would of course be happy to assist you. You can contact one of our TIL (Trade, Industry & Logistics) colleagues for further information.
In this article, we answer the ten most frequently asked questions about UTB (Invitation to Pay).
The ten most frequently asked questions about UTB (Invitation to Pay).
1. What does UTB stand for?
UTB stands for Invitation to Pay (Uitnodiging tot Betaling).
2. What is a UTB?
An Invitation to Pay (UTB) is a post‑clearance assessment. It is issued when, according to customs authorities, a customs debt has arisen. In practice, customs authorities do not always assess matters correctly, which means that an objection can be lodged against a UTB. A key requirement is that the amount stated in the UTB must be paid, or security must be provided, before an objection can be pursued.
3. What is a customs debt on import?
A customs debt on import is the obligation of a person, whether a natural or legal person, to pay the amount of import duties due under customs legislation.
4. Can you give an example of a situation in which a customs debt arises?
A customs debt arises when one of the obligations relating to the movement, processing, storage, temporary storage, temporary admission or disposal of non‑Union goods subject to import duties is not fulfilled. A practical example is a situation in which customs authorities take the view that the importer should have used a different commodity code (HS code) when releasing goods originating from China for free circulation.
Customs will inform the representative, for example the customs broker, of the intended correction of the declaration. The representative may disagree and submit a response. If this does not lead customs to change its position, customs may issue a UTB, in other words a formal assessment.
5. What is indirect representation?
In the case of indirect representation, the customs representative submits the import or export declaration in its own name but on behalf of the principal. This has legal consequences, as the customs representative is considered the declarant and is responsible for the content of the declaration. The representative is also liable for compliance with the obligations associated with submitting the declaration.
If an import declaration submitted under indirect representation results in a customs debt, the indirect customs representative, as the declarant, is the debtor of that customs debt. The represented party is a joint debtor. Both parties may be held jointly and severally liable by customs, meaning that a UTB may be issued to either or both parties.
6. What is direct representation?
In the case of direct representation, the customs representative performs a service without creating a legal obligation for itself. The direct representative merely ensures that the declaration of the interested party is submitted to customs. The representative acts in the name and on behalf of the interested party. Acting as a direct representative does not in all circumstances fully shield the representative from being designated as a joint debtor for the customs debt in the UTB.
7. Who issues a UTB and within what timeframe?
Customs authorities issue the UTB. Prior to issuing a UTB, customs will first send a so‑called intention to issue a UTB. The recipient of this notice is usually given 30 days to respond. It is important to submit such a response, as it may reveal, for example, that the customs officer made a calculation error. It is also possible to request access to the documents on which the intended assessment is based and to discuss these with the customs officer. After this 30‑day period, customs may issue the UTB. An objection can then be lodged against it.
8. Who receives a UTB?
Customs authorities may directly address the declarant, meaning the principal in the case of direct representation. In some cases, the customs broker or carrier may also be addressed.
9. In which cases can you receive a UTB?
A UTB may be issued if the information stated in the customs declaration is incorrect, for example:
- the goods have been incorrectly classified in the customs nomenclature, resulting in an incorrect commodity code and duty rate
- the customs value of the goods has not been correctly determined
- the origin of the goods has not been stated or has been stated incorrectly
- required documents supporting the declaration cannot be produced
10. What should you do after receiving a UTB?
After a UTB has been issued, it is important to protect your legal position. There are generally two options: 1) pay the amount and close the matter, or 2) lodge an objection, usually within six weeks of the date of the UTB. In that case, the UTB must still be paid or security must be provided, for example by means of a bank guarantee. It is advisable to contact a customs lawyer so that you receive proper advice and assistance in any objection and appeal proceedings against the UTB.
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