Decree No.18 of the Plenum of the Russian Supreme Court “On certain issues of courts applying customs legislation” dated May 12, 2016 (the “Decree”) has been published, substituting and cancelling the previous explanations of the Russian Supreme Commercial Arbitration Court on many disputable issues occurring in the course of applying customs laws.

Due to the increased attention to the customs cost of goods following the Russian Customs Authority’s Order No.280 dated February 16, 2016 and subsequent frequent practice of releasing goods only against security for the customs payments, special attention should be paid to the Supreme Court’s clarifications concerning the declarant confirming the declared customs value.

Some of the key points of the Decree dealing with determining the customs value are as follows:

1. The price of the goods being imported cannot be rejected on the sole grounds that the customs authority does not agree with it being lower as compared to prices for similar goods or being different from the price level on the domestic market.

At the same time, the Russian Supreme Court notes that this explanation does not diminish the customs authority’s right to “make certain” that the declared customs value is valid, which in essence gives customs broad powers when assessing the customs value.

2. If there are signs that the declared customs value is invalid or if there is no due confirmation for the information on the cost of the transaction, these can serve as grounds for an additional examination, but not for automatic adjustment of the customs value.

3. The customs authority must grant to the declarant an actual opportunity to remedy any doubts as to the validity of the declared customs value, in particular:

• The customs authority must inform the declarant of the grounds on which the documents provided by the declarant do not remedy the doubts concerning the declared value (citing specific documents and information);
• The declarant has the right to contribute its objections regarding the signs of invalid declaration revealed by the customs authority, which must be taken into consideration when making the final decision.

4. The Supreme Court assumes the declarant needs to collect in advance the available evidence substantiating the acquisition of goods at the relevant price for subsequent submission of such evidence to the customs authority.

According to the Decree, the declarant is allowed to not submit such documents and information only if there are objective impediments and the appropriate explanations were given to the customs authority.

5. In case of a court dispute, new evidence supporting the declared customs value will not be accepted by the court if it was not submitted during customs control.

The court will deem it acceptable and will include it in the case materials only if the declarant had objective hindrances in obtaining such evidence prior to the customs making the disputed decision. In this connection, it is crucial to gather the full evidence base at the stage of customs control.

The explanations given in the Decree assume unequivocally that it is the declarant who is responsible for proving the declared customs value.

Based on the position of the Supreme Court, the evidence base in disputes with the customs authority is formed at the pre-trial stage, and that is why companies should pay due attention to the explanations and documents submitted to the customs authority in the course of customs control, so as to ensure in advance the complete and documented confirmation of their legal position.

Decree No.18 of the Plenum of the Russian Supreme Court “On certain issues of courts applying customs legislation” dated May 12, 2016а

Anastasiya Kuzmina    Associate   St. Petersburg   Tel.: +7 (812) 346 79 90

Additional notes

Should any questions arise in connection with the above or if you need any additional materials, please contact Anastasia Kuzmina, St. Petersburg Office of Capital Legal Services.

This Information letter keeps the clients of Capital Legal Services and other interested parties abreast of information that may, to any extent, affect their activity or cater to their particular interests. The opinions and commentaries expressed in this information letter shall not be deemed as legal opinions and do not cancel the need to obtain legal advice or legal opinion on separate issues.