Why many customs service providers have stepped away from indirect representation – and why Cableroad takes a different approach.
The 2022 diamond heist at the TEFAF art fair in Maastricht made headlines around the world. Five armed men smashed a display case in broad daylight and escaped with jewellery reportedly worth €35 million.
What received far less attention, however, was the customs liability that followed. For customs professionals, fiscal representatives and importers alike, the case became a powerful reminder of the risks associated with indirect customs representation and acting as Importer of Record.
When a temporary import becomes a customs problem
The jewellery had been brought into the European Union under the Temporary Admission procedure. Under this arrangement, customs duties and import VAT are suspended because the goods are expected to leave the EU again after a limited period. However, when the jewellery was stolen during the exhibition, it could no longer be re-exported as intended.
As a result, customs authorities considered the temporary import procedure to have been breached and sought recovery of the suspended import charges. The amounts involved were substantial. Initial claims reportedly included approximately €4.8 million in import VAT, €500,000 in customs duties and a further €700,000 in interest. The question then became: who was responsible?
A long chain of responsibility
Like many international shipments, the import process involved multiple parties. The jewellery owner engaged a transport company. The transport company relied on specialist event logistics providers. Customs formalities were subsequently handled by customs professionals acting within the import chain.
When customs liabilities arose following the theft, attention turned to the parties that had participated in the customs declaration process and, in particular, those acting under indirect representation arrangements. The resulting dispute continued for several years and highlighted the significant financial exposure that can arise when parties assume customs responsibilities on behalf of others.
Why indirect representation matters
Under direct customs representation, declarations are lodged in the name and on behalf of the importer. The importer remains primarily responsible for customs compliance and any resulting liabilities.
Indirect representation operates differently. Under an indirect representation arrangement, the representative lodges customs declarations in their own name on behalf of the importer. This can create joint liability for customs debts arising from those declarations.
For businesses outside the European Union that do not yet have an EU establishment, VAT registration or EORI number, indirect representation can provide an efficient route to market. The costs are lower, and, for some clients perhaps more importantly, it can be set up in a matter of days. The representative, however, needs to carefully assess the associated commercial and compliance risks.
Why many providers no longer offer the service
The TEFAF case served as a wake-up call for many customs and fiscal service providers. While the circumstances were unusual, the case demonstrated how events outside a representative’s direct control can potentially result in significant customs exposure. As a consequence, many providers have reduced or ceased offering indirect representation services altogether, or at least for new clients, high-value goods or unfamiliar supply chains.
Cableroad’s approach: risk management, not risk avoidance
At Cableroad Fiscal Agents, we recognise that many international businesses need a practical way to access the European market before establishing a permanent presence in the EU. For those businesses, indirect representation can be an effective solution.
The key is understanding the risk before accepting it. Our assessment process goes well beyond standard Know Your Customer requirements. We take time to understand the client’s business model, products, supply chain, expected import volumes and compliance procedures. We evaluate the commercial realities of the transaction as well as the customs implications. This enables us to make informed decisions about whether indirect representation is appropriate for both the client and Cableroad.
As Hester Koch, Head of Asia-Pacific at Cableroad Fiscal Agents, explains, “Indirect representation remains an important solution for many international businesses entering the European market. The difference is that today, providers need to understand the risks in far greater detail than they may have done in the past. For us, the focus is not on avoiding risk altogether, but on managing it responsibly.”
Supporting growth beyond customs clearance
For many clients, indirect representation is only the starting point. As their European operations expand, they often choose to establish a more permanent structure through EU VAT registrations, fiscal representation arrangements, warehousing solutions or local entities. Cableroad supports clients throughout that journey, providing practical customs, VAT and compliance solutions that evolve alongside their business.
Customs partner
The lessons of the TEFAF case remain relevant today. Customs representation is not simply an administrative service. It carries real legal and financial responsibilities. Understanding those responsibilities – and managing them effectively – is what separates a customs provider from a customs partner.