Meaning
Legal arrangements require a customs representative to act in their own name but on behalf of another person, making both parties jointly and severally liable for customs debt. The use of indirect representation often occurs when the importer is not established in the territory of the customs authority.
Joint Liability
Both the agent and the importer are responsible for the payment of all duties and any penalties that may arise from a faulty declaration. This creates a high level of risk for the customs broker, who must perform thorough due diligence on their client’s battery products and pricing. If the importer disappears or fails to pay, the broker is legally obligated to settle the debt.
Broker Responsibility
Because they are acting in their own name, the representative must verify every detail of the shipment personally. They often require a larger deposit or a detailed indemnity agreement from the client to mitigate the financial exposure. This model is more expensive for the importer because the broker charges a higher fee for taking on the shared legal burden.
Fiscal Security
Customs authorities prefer this model for foreign companies as it ensures there is always a local entity to hold accountable for the tax debt. It provides a layer of security for the state revenue when dealing with high value battery components arriving from overseas. The representative serves as the primary point of contact for all regulatory inquiries and audits.
