CUSTOMS DISPUTES NOT SUBJECT TO REVIEW UNDER ADMINISTRATIVE COURT PROCEEDINGS
Part 7 of Article 3 of the Administrative Procedural and Process-Related Code of the Republic of Kazakhstan (hereinafter referred to as the “APPC”) provides that cases whose proceedings are governed by the legislation of the Republic of Kazakhstan on administrative offences shall not be subject to review under administrative court proceedings.
A joint-stock company (hereinafter referred to as the “Company”) filed a claim with the court against the Republican State Institution “Department of State Revenue for Pavlodar Region” seeking to have the actions taken to inspect customs declarations and issue notices declared unlawful, and to have the notices declared invalid and annulled.
By a judgment of the Specialized Interdistrict Administrative Court of Pavlodar Region dated 21 January 2022, which was upheld by the ruling of the Judicial Panel for Administrative Cases of the Pavlodar Regional Court dated 14 June 2022, the claim was dismissed.
In resolving the dispute and dismissing the claim, the lower courts, guided by Articles 393, 394 and 409 of the Customs Code, proceeded on the basis that the defendant had conducted customs control in the form of an examination of customs declarations prior to the release of goods. The claimant had been notified of the appointment of customs control using the risk management system (RMS) through the ASTANA-1 information system.
There was no requirement to issue a notice in the prescribed form regarding the commencement of the examination and its results under Article 411 of the Customs Code, since such requirements apply to the examination of customs and other documents and/or information initiated after the release of goods.
According to the statement of claim, the Company sought to have the defendant’s actions in conducting customs control without duly issuing a notice in accordance with Article 411 of the Customs Code declared unlawful. Instead of issuing a notice in the prescribed form, the defendant sent notifications that are not provided for under customs legislation and do not give rise to any legal consequences.
As established by the Judicial Panel and not disputed by the parties, the defendant had not conducted an examination under Article 411 of the Customs Code, and no acts appointing an examination or recording its results had been issued.
Pursuant to paragraph 7 of Article 393 of the Customs Code, customs control in the form of examining customs and other documents and/or information, as well as in other forms or through the application of measures ensuring the conduct of customs control, may be carried out by customs authorities through the information system of the customs authorities without the participation of customs officials.
In cases of preliminary customs declaration and periodic customs declaration, customs control over the objects specified in the fifth paragraph of Article 394 of the Customs Code shall be carried out from the moment the customs declaration is registered.
The fifth paragraph of Article 394 of the Customs Code provides that the objects of customs control include customs and other documents required to be submitted to customs authorities in accordance with the customs legislation of the Eurasian Economic Union, international treaties of the Republic of Kazakhstan, and/or the customs and other legislation of the Republic of Kazakhstan, as well as the information contained in such documents.
Pursuant to subparagraph 1) of paragraph 1 of Article 409 of the Customs Code, the examination of customs and other documents and/or information constitutes a form of customs control consisting of verifying the accuracy of completion of a customs declaration.
Under subparagraph 1) of paragraph 1 of Article 802 of the Code of the Republic of Kazakhstan on Administrative Offences (hereinafter referred to as the “CAO”), the grounds for initiating administrative offence proceedings include the direct detection by an authorised official of the fact that an administrative offence has been committed, subject to the provisions of part 3 of that Article.
Article 535 of the CAO establishes administrative liability for a declarant and/or a customs representative for violating the procedure for customs declaration of goods, namely, failing to comply with the requirements established by the customs legislation of the Eurasian Economic Union and/or the Republic of Kazakhstan concerning the procedure for completing customs declarations and declaring goods for customs purposes.
It was established that, in connection with the declarant’s violation of the procedure for completing customs declarations, the defendant drew up reports under part 2 of Article 535 of the CAO, and the specialised interdistrict courts for administrative offences issued rulings dated 25 and 27 May 2021.
Pursuant to parts 1 and 2 of Article 827 of the CAO, a person whose rights and freedoms are directly affected by an action (omission) and/or decision of a body (official) conducting administrative offence proceedings is entitled to lodge a complaint with a higher-ranking body (official) and/or a court regarding violations of the law in drawing up an administrative offence report, other actions (omissions), and decisions, except for decisions adopted following the consideration of an administrative offence case and decisions made in response to a complaint (protest) against a ruling in an administrative offence case.
Complaints shall be submitted to the body (official) or court whose actions (omissions) or decisions are being challenged. That body (official) or court is required to forward the complaint to the higher-ranking body (official) or the competent court within three days of its receipt.
In view of the foregoing, the legal consequence of conducting customs control to verify the accuracy of customs declarations is the preparation of a report by an official and the imposition of administrative liability on the declarant.
Accordingly, actions taken by customs officials to examine customs declarations and draw up administrative offence reports are subject to appeal in accordance with Chapter 44 of the CAO.
The Department’s actions in issuing notifications under Article 897 of the CAO, as well as the claim seeking to have such notifications declared invalid and annulled, likewise cannot be challenged under the APPC. This is because the notifications do not constitute adverse administrative acts; they are informational in nature and do not give rise to legal consequences for the claimant.
On the basis of the foregoing, the Judicial Panel for Administrative Cases of the Supreme Court of the Republic of Kazakhstan set aside the judicial acts of the lower courts and ordered the return of the statement of claim to the person who had filed it (Case No. 6001-22-00-6ап/1999).
LEGAL FRAMEWORK
- Constitution of the Republic of Kazakhstan dated 30 August 1995;
- Administrative Procedural and Process-Related Code of the Republic of Kazakhstan (hereinafter referred to as the “APPC”);
- Code of the Republic of Kazakhstan “On Customs Regulation in the Republic of Kazakhstan” (hereinafter referred to as the “Customs Code”);
- Customs Code of the Eurasian Economic Union, ratified by Law No. 115-VI of the Republic of Kazakhstan dated 13 December 2017 (hereinafter referred to as the “EAEU Customs Code”);
- Regulatory Resolution No. 7 of the Supreme Court of the Republic of Kazakhstan dated 29 November 2019, “On Certain Issues Relating to the Application of Customs Legislation by Courts”;
- Code of the Republic of Kazakhstan “On Taxes and Other Obligatory Payments to the Budget” (Tax Code);
- Entrepreneurial Code of the Republic of Kazakhstan (hereinafter referred to as the “Entrepreneurial Code”);
- Code of the Republic of Kazakhstan on Administrative Offences (hereinafter referred to as the “CAO”);
- Civil Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the “CPC”);
- Treaty on the Eurasian Economic Union dated 29 May 2014 (hereinafter referred to as the “EAEU Treaty”);
- Acts constituting the law of the EAEU (hereinafter referred to as the “international treaties and acts in the field of customs regulation”);
- Decision No. 42 of the Board of the Eurasian Economic Commission dated 27 March 2018, “On the Specifics of Conducting Customs Control of the Customs Value of Goods Imported into the Customs Territory of the Eurasian Economic Union.”
ABBREVIATIONS USED
JPCASC – Judicial Panel for Civil and Administrative Cases of the Supreme Court of the Republic of Kazakhstan;
JPAC – Judicial Panels for Administrative Cases of regional courts and courts equated thereto;
SIAC – Specialized Interdistrict Administrative Courts of the regions of the country;
SI – State Institution;
RSI – Republican State Institution;
SCR – State Revenue Committee;
DSR – Department of State Revenue;
USR – Управление государственных доходов (State Revenue Administration);
LLP – Limited Liability Partnership;
IE – Individual Entrepreneur.
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