Cancellation of a customs depot or warehouse licence
One of most severe penalties in the ABF arsenal is the cancellation of a depot or warehouse licence. A cancellation of a licence is not just an expense (such as a fine). Rather, it is the loss of your ability to carry on your business.
If you receive a notice of an intention to cancel a licence it is crucial to act quickly and comprehensively. We strongly recommend promptly obtaining professional advice from lawyers or advisors who have previously dealt with an ABF intention to cancel a licence.
When can a licence be cancelled
There are a range of reasons that the ABF can seek to cancel a depot or warehouse licence. The most common reasons are breaches of a licence condition or that the ABF is satisfied that the cancellation is necessary for either the protection of the revenue or for the purpose of ensuring compliance with the law.
Most often a notice of an intention to cancel a licence comes after repeated infringement notices and successive audits that have identified non-compliance.
For this reason we strongly recommend that depot and warehouse licence holders respond fully to even minor breaches. Such a response will help demonstrate that cancellation of the licence is not necessary to prevent further breaches.
Cancellation and suspension of the licence
At the same time as proposing to cancel the licence, the ABF may immediately suspend the licence. It should not be taken as a given that a suspension decision is correct or will not be overturned. If an identified issue can be immediately addressed, suspension is not necessary to prevent further breaches. For instance, if the issue was that an employee was not a fit and proper person, the suspension of that employee’s employment should be sufficient to address the issue pending consideration of the cancellation decision.
The suspension of a licence can ruin your business. It can be a very harsh outcome, especially if the ABF eventually make the decision not to terminate the depot or warehouse licence.
A suspension decision can be challenged at the Administrative Appeals Tribunal (AAT) and this should be seriously considered if there is a reasonable argument that the licence should not be ultimately cancelled.
Responding to the notice of the intention to cancel the licence
The legislation provides the licence holder with the opportunity to respond to the notice prior to the ABF making its final decision. Under the Customs Act a minimum of 7 days is required. However, it is likely that you will need more time than this. This is especially the case where a large number of breaches are alleged for the first time in the cancellation notice.
Our experience is that the ABF is reasonable in its response to requests to extend the 7 day timeframe.
Whatever timeframe you are given, it is crucial to respond in that time.
Issues to address
The issues that should be addressed in the response will differ in each instance. Below are issues are usually considered when framing a response:
· Did the alleged breaches occur? The laws applying to depots and warehouses are often difficult to interpret. It may be that due to factual or legal issues, the alleged breaches did not occur.
· If the breaches did occur, were the breaches beyond your control? For instance, was the breach caused by an event you could not control such as the limitations of the ICS.
· If the alleged issues did occur, can these issues be addressed other than by the cancellation of the licence. Relevant factors may be:
o Why did the issue occur;
o What steps have been taken to prevent a reoccurrence of the issue;
o How will you ensure that those steps are effective (such as a quality assurance program);
o Is the licence holder otherwise compliant;
· If the ABF claim is that cancellation is necessary for the protection of the revenue or to ensure compliance with the law, are there other alternatives to cancellation? For instances, would an infringement notice or additional licence conditions be sufficient?
What if the licence is cancelled
The decision of the ABF to cancel a depot or warehouse licence can be appealed to the AAT. If you do appeal, you may wish to seek a stay of the cancellation decision while the AAT considers the matter. If the stay is granted by the AAT, the ABF decision is out on hold and the depot/warehouse could still be operated pending the finalisation of the AAT review.
Even if the ABF had a legal right to cancel the depot / warehouse licence, the AAT will consider whether it was the correct or preferable decision. This provides the AAT with scope to overturn the decision if it considers that in the future the depot / warehouse will operate in a compliant manner.
Prevention is better than the cure
Even if you can overturn a cancellation decision, it is likely to involve considerable time and resources, on top of being very stressful. Cancellation is generally adopted as a last resort by the ABF. We strongly recommend that warehouse and depot operators address compliance issues fully and when they are first identified. Depots and warehouses deal with 1000s of consignments and it is unlikely that 100% compliance will be achieved in all instances. However, if you can show the ABF that you have systems in place to identify non-compliance and will respond appropriately to non-compliance, you will be demonstrating that cancellation of your licence is not necessary.