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Customs and Excise Act 2018

Administrative provisions - Administrative penalties

287: Calculation of amount of penalty

You could also call this:

"How to work out the amount of penalty you might have to pay if you make a mistake with customs"

Illustration for Customs and Excise Act 2018

If you make an error or omission, a penalty might be imposed under section 285. The amount of the penalty depends on what happened. If you did not pay or declare duty payable because of the error or omission, the chief executive will look at what you did. They will check if you made the error knowingly, were grossly careless, or did not take reasonable care.

If the chief executive thinks you made the error knowingly, the penalty is 100% of the duty unpaid, up to $50,000. If they think you were grossly careless, the penalty is 40% of the duty unpaid, up to $35,000. If they think you did not take reasonable care, the penalty is 20% of the duty unpaid, up to $20,000. If none of these apply, the penalty is $200.

The same rules apply if you got excess drawback because of the error or omission. If the error or omission made the entry otherwise materially incorrect, the penalty is $200. You will have to pay at least $200, even if the calculated penalty is less than this.

If you made an error in an entry under section 75, and the goods later became free of duty or had a lower duty rate, the penalty will be calculated as if the duty rate had not changed. This means you will still have to pay the penalty based on the original duty rate.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7039622.

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286: When penalty must be paid, or

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Part 5Administrative provisions
Administrative penalties

287Calculation of amount of penalty

  1. The amount of the penalty imposed under section 285 is as follows (subject to subsection (2)):

  2. if the error or omission has resulted in duty payable not being paid or declared for payment and—
    1. the chief executive is satisfied that the error or omission was made knowingly, 100% of the duty unpaid or undeclared, up to a maximum $50,000:
      1. the chief executive is satisfied that the error or omission occurred because the person was grossly careless, 40% of the duty unpaid or undeclared, up to a maximum $35,000:
        1. if the chief executive is satisfied that the error or omission occurred because the person did not take reasonable care (but was not grossly careless), 20% of the duty unpaid or undeclared, up to a maximum $20,000:
          1. none of subparagraphs (i) to (iii) applies, $200:
          2. if the error or omission has resulted in excess drawback being paid or claimed and—
            1. the chief executive is satisfied that the error or omission was made knowingly, 100% of the excess drawback paid or claimed, up to a maximum $50,000:
              1. the chief executive is satisfied that the error or omission occurred because the person was grossly careless, 40% of the excess drawback paid or claimed, up to a maximum $35,000:
                1. the chief executive is satisfied that the error or omission occurred because the person did not take reasonable care (but was not grossly careless), 20% of the excess drawback paid or claimed, up to a maximum $20,000:
                  1. none of subparagraphs (i) to (iii) applies, $200:
                  2. if the error or omission has resulted in the entry being otherwise materially incorrect, $200.

                    1. If the amount given by subsection (1)(a)(i), (ii), or (iii) or (b)(i), (ii), or (iii) is less than $200, the amount of the penalty is $200 instead of the amount given.

                    2. If an error or omission in an entry under section 75 resulted in an amount of duty payable not being paid or declared for payment but subsequently the goods become free of duty or subject to a lower rate of duty under Part 1 or 2 of the Tariff, the amount of the penalty under subsection (1) must be calculated as if the liability for duty had not changed.

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