Anastasiia Bondarenko
attorney at law, lawyer
Primary Advisors LLC
In Ukraine, martial law is still in effect, and as a result, there is a significant decrease in Ukrainian exports. Thus, according to the information data of the Association of Information Technology Enterprises of Ukraine, the percentage of funds for the export of goods has been calculated. So, in 2022, exports of goods from Ukraine decreased in value by 35% to $44.1 billion. At the same time, despite the fact that we are in a state of war, we should not forget that the customs authorities are primarily a government agency that is called upon to control the correctness of the information in the customs declaration, which sometimes destroys our idea of a truly democratic and independent country. Therefore, the issue of determining the customs value of goods and the mechanism of control over its determination is important, necessary and of top priority.
Most customs decisions are based not on the circumstances of a particular case, but on the amount of planned financial revenues to the budget. Therefore, as a rule, we have an unreasonable and unjustified overstatement of the customs value.
Therefore, a business entity must either agree with the customs value determined by the customs authorities or appeal the relevant decision.
According to the report of the State Customs Service of Ukraine, it was found that for the period of martial law starting from 2022, the courts considered more than 2,697 cases, of which 2,106 cases (78%) were decided in favor of the business entity. It is interesting to note that 1,555 cases concerned appeals against decisions on adjusting the customs value of goods.
Thus, various types of customs disputes arise between the customs authorities and declarants. The most common ones include disputes related to the determination and adjustment of the customs value of goods transported across the customs border of Ukraine and the request for additional documents.
So let’s look at an example of an appeal against a decision of the customs authorities to adjust the customs value of goods and their unreasonable request for additional documents. Firstly, such a high number of appeals against decisions is due to the fact that when determining the customs value, the customs authorities abuse their right to request additional documents confirming the amount paid for the goods or payable. Secondly, the customs authorities have the right to demand additional confirmation only if the documents provided by the declarant contain discrepancies, have signs of forgery, or do not contain all the information confirming the numerical values of the components of the customs value of goods or information on the price.
Thus, by the decision of the Supreme Court of 20.02.2018 in case No. 809/1884/16, the court recognized the decision to adjust the customs value of goods and the card of refusal to accept the customs declaration, customs clearance of release or passage of goods, commercial vehicles as unlawful and noted that the request for additional documents to confirm the declared customs value may take place only if there are reasonable doubts about the authenticity of the documents submitted to confirm the declared customs value of the goods, inconsistencies of the characteristics of the goods specified in the submitted documents, customs inspection of these goods, etc. It is mandatory for the customs authority to have reasonable doubts as to the correctness of the customs value, since the law links the possibility of requesting additional documents from the declarant to this circumstance and gives the customs authority the right to take such actions aimed at determining the actual customs value of the goods.
In its resolution dated 14.05.2019 in case No. 820/2474/16, the Supreme Court noted that the customs authority has a reasonable doubt as to the correctness of the customs value determination is mandatory, since the law links this circumstance to the possibility of requesting additional documents from the declarant and gives the revenue and duties authority the right to take further actions aimed at determining the actual customs value of the goods.
In the decision of the Supreme Court of 13.04.2023 in case No. 200/6415/20-a on the claim of PJSC “Azovstal Iron and Steel Works” against the Azov Customs of the State Customs Service, the court stated that the request for additional documents to confirm the declared customs value may only take place if there are reasonable doubts about the accuracy of the information provided by the declarant. As for the circumstances of the case, the declarant declared the customs value of the goods (ferro-alloy ferroniobium) in accordance with the foreign economic contract and provided all available documents on which the customs value was determined. However, the customs authorities based their request for additional documents on discrepancies according to the information of the Asian Metal information resource, which were established during the customs procedures. The customs also refers to a possible relationship between the declarant and the seller of the goods, which influenced the understatement of the customs value of the goods in the contract.
According to the court, the difference between the value of the goods declared by the person and the value of identical goods according to information resources on the Internet does not indicate violations on the part of the declarant and is not a basis for an automatic increase in the customs value of goods to the indicators of information resources. The court notes that the customs authority in compliance with the requirements of the customs legislation did not provide reasonable grounds to believe that the existing relationship between the seller and the buyer affected the customs value declared by the declarant.
By the decision of the Supreme Court of 20.06.2023 in case No. 1.380.2019.006247, the courts concluded that the decision to adjust the customs value of the goods was unreasonable, while the defendant’s doubts about the components of the customs value of the imported goods were based solely on assumptions and were not substantiated or confirmed in any way. The existence of a reasonable doubt as to the correctness of the customs value is a prerequisite for the customs authority, as this circumstance is the basis for the law to request additional documents from the declarant and entitles the customs authority to take further actions aimed at determining the actual customs value of the goods.
According to the court, the customs authority’s unreasonable doubts regarding the components of the customs value of the imported goods are based solely on assumptions and are in no way substantiated or confirmed. The Court emphasizes that the principle of decision-making on the basis, within the powers and in the manner provided for by the Constitution and laws of Ukraine is a guideline for the exercise of powers of the authority, which requires the latter to act in accordance with the law, under the conditions and circumstances determined by it, in compliance with the procedure established by law. The criterion of making a decision, performing (failing to perform) an action reasonably, i.e. taking into account all the circumstances relevant for making a decision or performing an action, reflects the principle of reasonableness of a decision or action. It requires the subject of authority to take into account both the circumstances which are directly indicated by the law and other circumstances relevant in a particular situation. An authority should avoid making unmotivated conclusions based on assumptions rather than specific circumstances. An unfavorable decision for a person must be motivated and meet the requirements of part two of Article 55 of the TCU.
The decision of the Supreme Court of 14.09.2023 in case No. 814/1262/16 stated that the conclusion of the courts of previous instances that the disputed decisions on customs value adjustment and the refusal card for acceptance of the customs declaration are unlawful, and the documents submitted by the plaintiff for customs clearance are sufficient to control the correctness of the customs value of the goods, have no discrepancies and contradictions, contain all the information confirming the numerical values of the components of the customs value of the goods to confirm the declared customs value. In the court’s opinion, it is necessary to request those documents that make it possible to verify the correctness or error of the declared customs value, and not all those provided for in Article 53 of the Customs Code of Ukraine. Failure to provide a complete list of requested documents may be a ground for determining the customs value other than the first method only if the submitted documents are insufficient or do not, in their entirety, refute doubts about the reliability of the information provided.
CONCLUSIONS:
In view of the above, customs authorities have the right to request only specific documents to confirm the customs value of goods, and only if there are reasonable doubts about the truthfulness of the information provided, and to determine a specific list of circumstances that give rise to doubts in such cases. As a general rule, the actions of the customs authorities in requesting additional documents from the declarant must comply with the principle of reasonableness. Analyzing the court practice, it should be noted that the arguments of the customs authorities when adjusting the customs value are recognized by the courts as formal and groundless, and as a result, the decision of the customs authority to adjust the customs value is recognized as unlawful.
© ТОВ “Інформаційно-аналітичний центр “ЛІГА”, 2024
© ТОВ “ЛІГА ЗАКОН”, 2024