Bonded warehouse licences are mainly available to export-oriented manufacturers and to deemed exporters who supply inputs, such as accessories and packaging, to export-oriented industries. Applicants usually need a registered company, an export registration certificate, membership of the relevant trade association, a trade licence, tax and VAT registration, suitable premises with secure storage, and the ability to provide bonds and guarantees. Specific criteria depend on the sector and current rules. We assess eligibility before application, identify gaps in documents or premises, and prepare a complete file for the bond commissionerate. Incomplete files are a common cause of delay.

Entitlement is the quantity of duty-free inputs a licensee may import, determined by reference to export orders, production capacity and input-output coefficients that reflect how much raw material is needed per unit of finished goods, with allowances for wastage. For garments, utilisation declarations are issued through the relevant trade bodies for each export contract, while other sectors use utilisation permissions. Errors in coefficients or wastage rates can cause shortfalls or audit discrepancies. We review the basis of entitlement and help factories apply for revisions supported by technical evidence. Keep technical data and past declarations on file to support revisions.

The bond commissionerate checks whether duty-free imports during the period have been used for export production, by comparing imports, entitlement, consumption, wastage, stock and exports against utilisation documents and records. Officers may physically verify stock. Any unexplained difference may be treated as goods released into the local market, leading to a demand for duty, taxes and penalties. Reconcile imports, consumption and stock regularly so discrepancies surface before officers find them. We review records in advance, help resolve gaps, attend audit meetings and respond to findings before they become formal demands or a basis for suspending the licence.

The authorities can take urgent steps, such as blocking imports or suspending facilities, where they suspect serious misuse, but adjudication of liabilities and cancellation of a licence generally require notice and an opportunity to be heard. The precise procedure depends on the Customs Act 2023, the rules and the facts. Suspension can stop production quickly, so the response must be immediate. We seek urgent hearings, present evidence, propose safeguards and, where the action is plainly unlawful, consider appeals or writ proceedings to restore the licence. Stock and utilisation records produced promptly are usually the strongest answer to alleged misuse.

Transfers of bonded raw materials between licensees, units or subcontractors are possible in some circumstances, but they must be authorised and documented under the applicable procedures. Unauthorised transfers are one of the most common causes of audit discrepancies and leakage allegations. Subcontracting arrangements need particular care. We advise on the permissions required, the documents that must accompany each transfer and the contractual terms between principal and subcontractor, so that both factories can account for the goods at their next bonded warehouse audit. Records must travel with goods. Subcontract terms should also cover liability for shortages.

Read the notice carefully, note the reply deadline and gather all relevant records: import documents, utilisation declarations, stock registers, production and wastage data, export documents and bank records. Do not reply without checking calculations, because demands are often based on assumptions that can be corrected. We analyse the legal basis and the arithmetic, prepare a written reply with evidence, request a personal hearing, and where appropriate negotiate the amount or payment terms. A well-prepared reply often reduces or removes the bonded warehouse liability. Ask for any working papers behind the figures, as these show how the demand was calculated.

Appeal deadlines are set by the Customs Act 2023 and are short, and some appeals require a deposit of part of the demanded amount unless waived or reduced. Missing a deadline can leave the order final and enforceable. Appeals typically go to the Commissioner (Appeals) or to the Customs, Excise and VAT Appellate Tribunal, with further routes to the High Court Division on questions of law. We calculate the applicable deadline as soon as an order is received and prepare the appeal and any stay application promptly. Keep the order and proof of the date it was received.

A buyer should check whether the licence is valid and renewed, whether bonds and bank guarantees are in place, whether annual audits are closed, whether any demands, show cause notices or appeals are pending, and whether entitlement balances and stock match the records. Criminal cases involving directors or alleged leakage should also be identified. In an asset purchase, the licence may not transfer automatically. We carry out this review, report risks clearly and draft conditions, warranties and indemnities covering historic customs liabilities in the purchase documents. Ask the seller for recent audit reports and customs correspondence early.