What this is about

Participants in foreign trade constantly deal with customs: they declare goods, carry them under customs control and store them in warehouses. A mistake can lead to a demand to pay duties and taxes, penalty interest and fines, and for intermediaries also to claims from clients. Some of these risks can be insured, but it is important to understand exactly what insurance covers and what it does not.

Who needs it

  • customs representatives;
  • owners of temporary storage warehouses and customs warehouses;
  • customs carriers;
  • importers and exporters who declare goods themselves;
  • freight forwarders and logistics companies.

Security for payment of customs duties

In many cases customs requires security for the obligation to pay duties and taxes: for customs transit, for release of goods before checks are completed, for deferred or instalment payments, and for customs representatives and carriers. The Customs Code of the Eurasian Economic Union (EAEU) and Federal Law No. 289-FZ "On Customs Regulation in the Russian Federation" name the main forms of security: a cash deposit, a bank guarantee, a surety and a pledge of property.

In some EAEU countries an insurance contract can also serve as security. In Russia the forms listed above are primarily used in practice, so before relying on a policy as a substitute for a deposit or guarantee, check the requirements of the customs authority.

Compulsory insurance for customs intermediaries

For customs representatives and owners of temporary storage warehouses, one of the conditions for inclusion in the customs authorities' registers is a contract of civil liability insurance towards clients. The policy covers damage to clients' property and breach of contracts with them. The minimum sum insured is set by law, and the conditions for inclusion in the register must be met at all times — without a valid policy the business is at risk.

What such a policy usually covers

  • a client's losses caused by errors in declaring goods and preparing documents;
  • loss of or damage to clients' goods in storage;
  • costs of defence in a dispute with a client, if provided for by the contract.

The list of covered losses depends on the specific insurer's rules. Administrative fines are generally not reimbursed.

Voluntary insurance for importers and exporters

Companies that clear goods themselves should take a broader view — at the risks of the supply itself:

How to arrange a contract

The insurer usually needs:

  • constituent documents and registration details;
  • a description of the business: types of operations, volumes, routes, categories of goods;
  • information on staff qualifications and experience;
  • information on losses and claims in recent years;
  • for intermediaries — the standard contract with clients.

The sum insured is agreed by the parties, taking into account legal requirements and the scale of the business. The rate depends on the type of operations, loss history and the chosen deductible. The insurer determines the amount of a loss on the basis of documented claims.

When the insurer will not pay

As with any liability insurance contract, the following are usually not covered:

  • intentional acts of the policyholder aimed at causing the insured event;
  • acts recognised as an intentional crime and connected with the insured event;
  • losses already compensated by the person at fault;
  • other exclusions expressly named in the contract and rules.

Practical tips

  1. First find out what security customs requires in your situation, and only then choose the instrument.
  2. Customs representatives should check that the sum insured and policy terms meet the requirements for the register.
  3. Align the policy term with the terms of your contracts with clients and avoid gaps in cover.
  4. Keep the documents for each declaration — you will need them to settle a claim.

You can find a suitable programme by submitting a request to Polis Re specialists.