Contract with a customs broker: key clauses and liability
A contract with a customs broker is an agreement (by its nature a mandate agreement) that gives the broker the right to declare cargo on the client's behalf and sets out the services, the cost and the liability of the parties. Its basis is Article 416 of the Customs Code of Ukraine: it is the contract that defines the relationship between the broker and the person they represent. Without a written contract the client has neither guarantees nor a clear allocation of liability.
In the contract it is important to fix not only the subject and the price, but also the type of customs representation — direct or indirect — because it determines who is responsible for paying the customs payments. Below we break down the key clauses, the division of liability and what to check before signing.
Why a contract with a customs broker is needed
A broker may clear cargo only on the basis of a contract with the client — this follows directly from Article 416 of the CCU. The contract solves three tasks: it describes exactly what the broker does, fixes the cost and the payment procedure, and allocates liability between the parties. It also protects the client: if clearance goes wrong, the limits of liability are determined precisely by the terms of the contract. Who a broker is and what their services include is covered in the material on the customs broker.
Key clauses of the contract
A good contract is not limited to the subject and the price. Below are the clauses worth checking and what each of them fixes.
| Clause | What it fixes |
|---|---|
| Subject of the contract | The list of services: declaration, clearance, storage, payment of charges on the client's behalf |
| The broker's powers | The right to represent the client before the customs authorities and the scope of these powers |
| Type of representation | Direct or indirect — liability for customs payments depends on it |
| Goods, timeframes, places | The groups of goods cleared, the approximate timeframes and the customs posts |
| Cost and payment | The price of the services, the procedure and timing of payment, prepayment, reimbursement of costs |
| Confidentiality | Protection of the client's commercial secret (Article 419 of the CCU) |
| Liability of the parties | What the broker is responsible for, what the client is responsible for, the reimbursement procedure |
| Term and termination | The period of validity and the conditions for terminating the contract |
| Force majeure and disputes | Actions in the event of force majeure and the dispute-resolution procedure |
Direct and indirect customs representation
Ukraine has introduced two types of customs representation modelled on the EU, and this directly affects liability for payments. The difference lies in whose name the declaration is filed under.
- Direct representation — the broker acts in the name of and on the instructions of the client. The client remains the declarant, and the broker is not liable for the customs debt arising under the declaration.
- Indirect representation — the broker files the declaration in their own name, albeit in the client's interests. In this case the broker themselves becomes the declarant and bears joint and several liability with the client for the payment of the customs payments.
The practical conclusion: the type of representation must be chosen consciously and written directly into the contract. Who becomes the declarant and how liability is allocated is covered in the material "Customs agent and declarant".
The broker's and the client's liability: who is responsible for what
The contract and the Customs Code allocate liability between the parties. Mixing up their areas is not advisable — it is a frequent source of conflicts.
| The broker is responsible for | The client is responsible for |
|---|---|
| The correctness of the declaration and the selection of the UKT ZED code | The accuracy of the source documents and the information about the goods |
| Compliance with the procedure and the clearance timeframes | The timely transfer of documents and powers |
| Confidentiality of the commercial secret (Article 419 of the CCU) | The actual availability of permit documents |
| Liability within the limits of the law and the contract | Payment of the customs payments to the budget |
For violations in broker activity the broker bears the liability established by the CCU and other laws — up to and including financial and, in certain cases, criminal liability. But the client is responsible for the accuracy of the invoice, the contract and the characteristics of the goods: if the data is inaccurate, the broker's liability is limited.
How to conclude a contract with a customs broker
How to conclude a contract with a customs broker
The procedure for arranging contractual relations with a customs broker before the first supply begins.
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Check the brokerMake sure the company is entitled to carry out broker activity before signing the contract.
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Agree the subject and the servicesFix the list of operations: declaration, calculation of payments, support, storage.
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Determine the type of representationWrite in direct or indirect representation — liability for payments depends on it.
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Agree the cost and paymentThe price of the services, the procedure and timing of payment, reimbursement of costs.
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Set out liability and confidentialityThe limits of the parties' liability and the protection of the commercial secret.
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Sign the contract and arrange the powersThe contract and the authorising documents give the broker the right to clear cargo.
The material on the register of customs brokers will help you check the company before signing.
What to check in the contract before signing
- Whether the subject is clearly described — which services exactly and for which goods.
- Whether the type of representation (direct/indirect) is indicated and whether the consequences for liability are clear.
- Whether the cost is transparent: the price of the services, the payment procedure, the reimbursement of costs.
- Whether there is a section on the parties' liability and the dispute-resolution procedure.
- Whether confidentiality of the commercial information is fixed.
- Whether the term of validity, the termination conditions and force majeure are set out.
Frequent mistakes when concluding a contract
- A vague subject — it is unclear from the contract what is included in the service and what is paid for separately.
- The type of representation is not indicated — the parties do not understand who is responsible for paying the charges.
- One order to several brokers — one supply cannot be entrusted to different brokers in parallel; this creates confusion and risks.
- No section on liability — in the event of a problem there is nothing to confirm who is responsible for what.
- Ignoring confidentiality — commercial data is left unprotected.
Working under a contract with Trans-Hope
Trans-Hope has been working in the foreign-trade market since 2009 and clears cargo under a transparent contract with clear liability — in combination with customs clearance and logistics in a single window. We agree the type of representation for the particular supply, fix the cost and scope of services and carry out clearance in Kyiv, Odesa, Lviv, Kharkiv and Dnipro. The cost of services and the calculation procedure are on the customs broker services cost page. Send the invoice and a description of the goods — and we will propose a plan of work and calculate the payments.
What type of contract is concluded with a customs broker?
