CFOs often confide that customs compliance feels like a blind spot; an area carrying risk but (un)comfortably outside their direct remit.
When onboarding new clients, we ask: “Who is responsible for your customs strategy?”.
The answers are consistently unclear. Customs sits across multiple departments but is owned by none. We believe finance should ultimately oversee it, even if not managing the day-to-day operations.
In private, finance leaders acknowledge that customs rarely command attention in the way VAT, corporate tax, or transfer pricing do. These are familiar, well-trodden paths; customs, by contrast, often lie within logistics or procurement – their details left hazy. Some CFOs admit that millions of pounds of exposure may sit with junior staff with little customs expertise. Yet, the subject rarely makes the priority list until a problem arises.
Before Brexit, customs duties flowed to the European Union. Today, the UK collects approximately £5.5 billion annually – a valuable new revenue source. HMRC audits are now more frequent, detailed, and protracted. A recent Freedom of Information request revealed that penalties have surged since the UK’s departure from the EU.
Customs is a complex, specialised, and often misunderstood field. Without a dedicated, fit-for-purpose function, gaps are almost inevitable.
We frequently encounter CFOs experiencing ‘fear of finding out’ when it comes to customs. They suspect there are issues, but lacking expertise, they defer action until HMRC initiates an audit. Once an audit starts, voluntary disclosures are off the table, and the business is exposed to penalties and fines.
This isn’t a conscious decision. It’s human nature, backed by decades of neuroscience and psychology.
Many businesses assume customs brokers or freight forwarders ensure compliance. But outsourcing processes does not outsource liability. In reality:
Customs is frequently viewed as an operational issue. If shipments move and invoices are paid, its easy to assume all is well. This is exactly how the Fear of Finding Out manifests.
Avoidance behaviour is a typical response to uncertainty. A 2000 study by Meiser and Dunn on Huntington’s disease found that although genetic testing was available, only 10% of at-risk individuals pursued it. In contrast, over 90% of non-at-risk individuals would want to know.
This illustrates a fundamental truth: when potential bad news looms, many opt for ignorance, and senior leaders are no exception.
In customs, we sometimes offer CFOs a free analysis session to identify risks and opportunities. Despite strong credentials, we’re occasionally told, “We have this covered” or “Our in-house team is solid.” That may be true, but a second pair of eyes never hurts, particularly when there’s no fee. We’ve often suspected CFOs hesitate not because they’re complacent, but because they’re reluctant to probe an area they feel sits outside their remit.
Neuroscience points to three key drivers:
In short: fear of uncovering risk breeds inaction – but ignorance is no defence when HMRC comes knocking.
A UK retailer misclassified goods under a higher duty rate for two years. The finance team trusted the broker and never questioned the process. By the time they realised, the reclaim window had closed, costing hundreds of thousands of pounds in avoidable costs.
CFOs must ensure visibility over customs. No news is not necessarily good news.
What can CFOs do to break the FOFO cycle and gain control over customs risk?
1. Ask the Right Questions
Rather than assuming customs is under control, CFOs should ask:
2. Implement Internal Checks
Even when customs is managed externally, finance should maintain oversight mechanisms, such as:
3. Leverage Technology
Tools like CAT360 can instantly identify duty reclaim opportunities, compliance risks, and cost-saving measures, giving CFOs oversight without requiring deep customs expertise. This provides CFOs with financial oversight without dragging them into daily operations.
The Fear of Finding Out is natural, but in customs compliance, it’s costly. Post-Brexit, CFOs can no longer afford a hands-off approach. The goal isn’t for CFOs to become customs experts, but to ask the right questions, implement safeguards, and ensure customs risk is actively managed.
By acting now, CFOs can transform customs compliance from a contingent liability into a source of strategic advantage.
Start your free 14-day trial of CAT360 today and see how AI² — the fusion of automation and expert insight — can uncover savings, reduce risk, and give you full control of your customs operations. No card required, just instant intelligence.
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