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23 Aug 2023

Do you operate a Customs controlled area?

Tax Alert - September 2023

By Jeanne du Boisson, Haidee Watkin & Sid Mahajan

Is your Customs Controlled Area compliant?

As part of a return to pre-COVID compliance activities, New Zealand Customs Service (‘NZ Customs’) have had a renewed focus on Customs Controlled Areas (CCAs). NZ Customs officers are entitled to enter and investigate activities within a CCA at any time. The primary purpose of these investigations is to check whether obligations required under the CCA licence are being complied with. Businesses operating CCAs that have not had a compliance check with a NZ Customs Officer in the past five years should expect a visit within the next year, with more regular visits in the future.

There are currently around 1,500 CCAs across New Zealand in which NZ Customs monitors or conducts activities. There are several general obligations imposed on CCA licence holders, as well as specific obligations that relate directly to the area in question. Ensuring you are compliant with these obligations is crucial towards maintaining your licence.

What is a CCA?

Customs Controlled Areas are specific areas licenced for purposes relating to NZ Customs’ border and excise functions. The activities undertaken in CCAs include examination areas for the manufacture of excisable items (such as alcohol), examination of imports, storage areas, and export areas, as well as airport/seaport activities. These areas play a critical role in maintaining border control and security, acting as the last point of contact before items are exported or the first point of contact when items are imported, as well as allowing for the management of duty-free or excisable items.

What are the NZ Customs officers checking for?

  • Valid licence – in order to operate a CCA you need to hold a valid licence, which should be renewed annually.
  • Licence activities within the specified area – CCA licences are granted based on the specified area(s) of your premises. It is important to ensure that all your CCA-related activities remain within this area and are consistent with the floor plan submitted to NZ Customs with the licence application/renewal. If any changes are required to this area, it should be pre-approved by NZ Customs.
  • No unauthorised access – ensuring you have adequate controls in place, with only authorised people having access to your CCA. This can be supported by evidence of logs such as employee swipe cards or security cameras.
  • Signage – your CCA should be clearly marked with signage. A template signage is available on the NZ Customs’ website.
  • Inspecting of goods – NZ Customs Officers have the right to inspect goods produced or stored in a CCA. As a result, it is important to ensure that you are both able to produce goods for inspection and that goods produced are within the scope of the permission granted by your licence.
  • Tracking of inward and outward goods - the tracking of imported goods and manufactured excisable goods is key to demonstrating adequate controls in your CCA. For example, the ability to track goods throughout the entire lifecycle, i.e., when the good enters the CCA (import), any changes made to the inventory (damaged stock) and when the good exits the CCA (export).
  • Record keeping - following this, it is equally important to ensure that records are stored for a minimum period of 7 years within New Zealand, unless other relevant authorisations have been issued by NZ Customs.
  • Specified conditions – any other conditions specified in the licence to operate a CCA.

If you have a licence to operate a CCA, it is crucial to check that your controls are adequate to cover your obligations. Navigating these requirements can often be complex, so now is a good opportunity to get in touch with Deloitte about checking the controls you have in place. For more information, reach out to your usual Deloitte advisor.

September 2023 - Tax Alerts

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