At times, passing the customs control reminds a lottery. Despite youare sure that all supporting documents have been provided in a timely manner and in full, there is never a hundred percent guarantee that the procedure will be successful. Therefore, it is always necessary to follow the case law of the Supreme Administrative Court of Ukraine (hereinafter – the SACU).
Customs Value: When are the Requirements and Calculations of the Customs Groundless?
When determining the customs value of goods crossing the state border, customs authorities often use the right granted to them to request additional documents confirming the amount paid or payable for the goods. However, the SACU reminds that the revenues and fees service authorities has the right to request additional confirmation only if the documents provided by the declarant contain discrepancies, have counterfeit signs or do not contain all the information confirming the numerical values of the components of the customs value of the goods, or information on the prices. This is due to the fact that such flaws do not allow the revenues and fees service authorities to meet the minimum legal formalities established by law.
Thus, if the declarant has provided all the documents necessary to determine the value of the goods by the first method, and also if the remarks of the customs authority (regarding the presence of discrepancies or inaccuracies in the documents) do not relate to the numerical values of the goods value, the request to provide additional documents, the refusal to accept the declaration, the application of another method for determining the customs value are groundless. The SACU came to the similar conclusions in its Resolutions of 20.06.2017 in case No. 814/2068/15, of 12.07.2017 in case No. 815/6984/15, and of 05.04.2017 in case No. 804/1642/15.
When considering case No. 820/6248/14, the SACU also pointed out that the actions of the customs authorities to request additional documents from the declarant should comply with the principle of prudence. In particular, the list partially repeated the list of documents already submitted, some of the requested documents objectively did not concern the goods imported. This indicates a formal approach of the customs authority to checking the correctness of the declared customs value.
Mission Impossible – the Recovery of Excessively or Erroneously Paid Amounts of Customs Duties in Court.
The subject of many claims filed by declarants is to cancel the decision on adjustment of the customs value of the goods and to return excessively paid amounts. However, if the cancellation of the decision of the customs authority is a claim that may be satisfied by the court, the court leaves the matter of funds recovery at the discretion of the customs authorities.
In the opinion of the SACU, the procedure for regulating the relations between the customs authorities and the authorities of the State Treasury of Ukraine in the process of recovery of customs duties and other payments erroneously and/or excessively charged to the budget does not provide for the recovery of erroneously and/or excessively paid obligatory payments in a way of judicial collection directly (at the same time) with the implementation of judicial control over decisions, actions or inactivity of customs authorities on issues related to customs clearance and collection of customs duties. Such conclusions were reached by the SACU in its Resolution of 09.03.2017 in case 826/7075/13-а. By the way, such a position of the court also applies to cases of excessively or erroneously paid amounts of both customs duties and taxes. This is confirmed by the conclusions of the SACU in case No. 817/1923/13-a and of the Supreme Court of Ukraine in case No. 826/7631/15.
Incoterms Rules: Inattention May Lead to Adjusting the Customs Value
The application of the Incoterms rules in foreign trade agreements and other primary documents has become a practice for both Ukrainian and foreign buyers and suppliers. There are many disputes in case law in which either the terms of the contract as a whole do not meet the specified rules of trade, or there are differences in several related documents on the same transaction.
An example of such inattention of the declarant is case No. 815/1718/16. In its decision of 09.08.2017, the SACU noted that the differences in the terms and conditions of supply of goods, in foreign trade agreements, as well as in the invoices excluded the possibility of the revenues and fees service authorities to exercise control over the correct determination of the customs value of the goods by checking the numerical value of the declared customs value. At the same time, the SACU has found the conclusions of the courts of appeal and of the first instance that the DAP and CIF, FOB and CIF terms of supply of goods are similar, determine the place of delivery of the goods and do not affect the declarant’s declared customs value of the goods at the price of the agreement to be erroneous. Thus, in order to avoid problems with the determination of the customs value, it is recommended to clearly and unequivocally indicate the terms and conditions of delivery using Incoterms.
Thus, numerous disputes with the customs authorities demonstrate how important it is for the companies engaged in foreign economic activity to understand the latest trends in the case law formed when considering such disputes. This will give an opportunity to look at all supporting documents “through the eyes of the customs” and to take into account the risks that can await the declarant in the customs control areas in advance. In addition, awareness of the current case law makes it possible to interpret sometimes quite general norms of the customs legislation more accurately, as well as to identify and timely respond to potential abuse of power by the customs authorities.
Yulia Sidelnyk, Assistant Associate GOLAW