Customs House Agents (CHA) have new responsibilities. They have to follow the ‘Know Your Customer’ (KYC) guidelines issued by the Central Board of Excise and Customs (CBEC). They have to be careful not to employ persons involved in any fraudulent activity. They will also face more competition, as more CHA licences may be issued in future.
The obligation of the CHA to verify antecedent, correctness of Importer Exporter Code (IEC) Number, identity of his client and functioning of his client at the declared address by using reliable, independent, authentic documents, data or information is now a legal obligation, as a new clause has been added in the Regulation 13 of the Customs House Agents Licensing Regulations 2004. The CBEC, has in its Circular number 9/2010-Cus. dated April 8, 2010, explained that the KYC guidelines have been prescribed in the context of increasing number of offences involving various modus operandi such as misuse of export promotion schemes, fraudulent availment of export incentives and duty evasion by bogus IEC holders etc., so that they are not used intentionally or unintentionally by importers or exporters who indulge in fraudulent activities. Besides detailed guideline on the list of documents to be obtained from the client or customer and got verified, CBEC has also made it obligatory for CHA to obtain from the client or customer the photograph of the authorised signatory.
CBEC has also said any individual involved in any fraudulent activity (ie, individuals suspended or blacklisted or denied permission to work in any section of the Custom House) should not be allowed to be employed by a CHA for transacting business with Customs. An undertaking in this regard may also be taken from CHA at the time of submission of application giving details of the person proposed to be employed by them.
Only those who have qualified themselves in the examination conducted under regulation 19(3) and who have been authorised by CHA in terms of regulation 19(5) alone are allowed to sign the declarations filed before Customs for transacting the work at any Custom station. Customs will also conduct an annual review to make sure that discredited individuals are not allowed to handle the Customs work for CHA.
The Commissioner of Customs has powers to invite applications for the grant of such number of licences as assessed by him, to act as CHA in a Customs station. The regulations do not provide for any restrictions on the number of CHAs. CBEC now says that no restriction should be placed on the number of CHAs operating in the Custom Houses and the market forces should govern the number of proficient and qualified persons required to carry out the job of CHA commensurate with the volume of import or export cargo.
The Board also did not find any justification in prescribing a turnover-based criteria for ascertainment of the number of CHA licences required to be issued at a particular Custom House or Station. Therefore, any number of CHA licences can be issued by the Customs. Examinations will henceforth be held annually, instead of twice a year. A number of changes to the CHA Licensing Regulations, 2004 have also been made regarding suspension or revocation of licences and the procedures and time limits for completion of suspension proceedings.
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