What Is Indirect Customs Representation?
Indirect customs representation, also known as Mode 3 under Article 18 of the Union Customs Code (UCC), is a legal customs arrangement where a representative (usually a freight forwarder or broker) lodges import declarations in their own name but on behalf of a third party, typically a non-EU-based importer.
In this setup, the representative becomes the formal declarant and is jointly and severally liable for customs duties. While they assume customs liability, they are not automatically liable for VAT unless the national laws of the country of import specifically impose it.
This procedure is essential for UK, US, and non-EU companies that wish to import into the EU without establishing a local legal entity.
Indirect vs Direct Customs Representation
Understanding the distinction between customs modes is critical:
- Indirect Representation (Mode 3):
The customs agent acts in their own name, assumes joint liability for customs debt, and is the declarant. - Direct Representation (Mode 1):
The agent files the declaration in the importer’s name, with full liability remaining with the importer.
In indirect mode, the representative is more exposed legally, making this a higher-risk but necessary option for many non-EU businesses.
When Should You Use Indirect Representation?
Indirect representation is ideal if you:
- Are not established in the EU but need to import goods
- Have no local EORI or VAT registration in the country of import
- Are handling occasional or one-off shipments into the EU
- Are engaging a customs broker to act as declarant on your behalf
This is particularly relevant for UK exporters post-Brexit, US brands entering the EU, and global B2B traders who don’t want to set up full legal entities.
Pros and Cons of Indirect Representation
Benefits:
- ✅ Enables import without creating an EU company
- ✅ Simplifies customs clearance via experienced brokers
- ✅ Lets you leverage the broker’s local EORI, knowledge, and infrastructure
Risks & Considerations:
- ⚠️ Customs representative assumes joint liability for duties
- ⚠️ Potential VAT liability depending on national rules (e.g., France or Italy may enforce this)
- ⚠️ Requires solid legal contracts and clear power-of-attorney
- ⚠️ May incur extra costs, such as financial guarantees or insurance
Because of these risks, many brokers are reluctant to offer Mode 3 representation unless trust, creditworthiness, and documentation are fully in place.
Best Practices for Indirect Representation Compliance
To use indirect representation effectively and safely:
- Establish Clear Contracts: Ensure your broker agreement clearly defines liability, indemnities, and the scope of representation.
- Understand National VAT Rules: Check if the country of import extends VAT liability to representatives (e.g., Germany vs. France may differ).
- Keep Strong Documentation: Maintain copies of EORI numbers, customs declarations, invoices, POAs, transport records, and audit trails.
- Assess Alternatives: For frequent imports, consider switching to direct representation or setting up a local EU branch to reduce exposure and costs.
Common Use Cases for Indirect Representation
- UK companies shipping into the EU without permanent establishment
- US and global exporters handling EU fulfillment
- Businesses working with logistics providers as full declarants
- Companies conducting one-time or limited volume shipments
In complex supply chains, especially when EU establishment is not feasible, Mode 3 representation may be the only compliant route to entry.
How Transportify Supports Indirect Representation (Mode 3)
At Transportify, we offer reliable and secure indirect customs representation across the EU. Our services include:
- ✅ Acting as your formal declarant using our EU EORI
- ✅ Providing legally sound contracts with defined liabilities
- ✅ Offering fiscal representation support if required
- ✅ Delivering end-to-end audit documentation
- ✅ Helping you stay compliant with Article 18 UCC regulations
We make Mode 3 simple for importers without EU presence—no entity needed, no confusion, full compliance.
Need Indirect Representation for EU Imports?
Our team has years of experience supporting non-EU businesses through customs complexity. Whether it’s a single shipment or recurring trade, we can help.
Visit: www.transportify.co.uk/customs
Contact us at: customs@transportify.co.uk
