KYC is an acronym familiar to many as ‘know your customers’.  In the competitive business environment, the relationship a service provider has with his customer is what keeps that customer coming back.  It is for this reason that many service providers go the extra mile in an attempt to better know their customers.

If that service provider is operating in the customs and excise realm, he should focus as much if not more effort on K.Y.C – know your customs legislation.  Since the Customs & Excise Act 91 of 1964 (“CEA”) is self-regulatory, the onus is on each entity operating in the customs and excise arena to know the legal provisions rules and regulations applicable to their sphere of operations.

Failure to comply with a legal provision contained in the CEA could be catastrophic for both the service provider and its customer.  If for example the entity offers a warehousing service and accepts non bonded cargo into a bonded facility without the requisite approvals from SARS, that service provider will be severely punished by SARS.  If a clearing agent passes a bill of entry for removal of goods in transit and does not ensure that the cargo is transported by a licensed remover of goods in bond and does not obtain the required acquittal documents proving export, that clearing agent and / or his customer will be liable to SARS for the VAT and duty applicable to the cargo, and could additionally incur forfeiture and other penalties.

It is imperative that each entity licensed and registered with SARS (customs) is fully aware of its rights and more importantly its obligations towards SARS.  Failure to comply with a provision of the legislation could result in massive financial penalties for the entity and severe reputational harm, whether or not the entity itself had any intent in contravening the CEA.

The CEA is one piece of legislation where the term ‘ignorance of the law is no excuse’ flourishes.