On some issues of the application of customs legislation by courts
Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan dated November 29, 2019 No. 7.
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In order to form a uniform practice of applying customs legislation by courts, the plenary session of the Supreme Court of the Republic of Kazakhstan decides to provide the following clarifications:
Customs regulation in the Republic of Kazakhstan is carried out in accordance with the Constitution of the Republic of Kazakhstan (hereinafter referred to as the Constitution), international treaties included in accordance with paragraph 1 of Article 4 of the Constitution as part of its current law, and the legislation of the Republic of Kazakhstan in the field of customs.
By virtue of paragraph 3 of article 4 of the Constitution, international treaties ratified by the Republic take precedence over its laws.
International agreements regulating customs relations include:
The Treaty on the Eurasian Economic Union (hereinafter referred to as the EAEU) dated May 29, 2014 (ratified by the Law of the Republic of Kazakhstan dated October 14, 2014 No. 240-V, entered into force on January 1, 2015);
The EAEU Customs Code (Appendix No. 1 to the EAEU Customs Code Agreement dated April 11, 2017, ratified by the Law of the Republic of Kazakhstan dated December 13, 2017 No. 115-VI, entered into force on January 1, 2018, hereinafter referred to as the EAEU Customs Code);
The International Convention on the Harmonized Commodity Description and Coding System of June 14, 1983 (hereinafter referred to as the International Convention) and the Protocol amending the International Convention of June 24, 1986, to which the Republic of Kazakhstan acceded by the Law of the Republic of Kazakhstan dated February 3, 2004 No. 525;
The Agreement on the Functioning of the Customs Union within the framework of the Multilateral Trading System dated May 19, 2011 (ratified by the Law of the Republic of Kazakhstan dated November 21, 2011 No. 494-IV, entered into force on August 22, 2012);
Protocol on Certain Issues of Import and Circulation of Goods in the Customs Territory of the Eurasian Economic Union dated October 16, 2015 (ratified by the Law of the Republic of Kazakhstan dated December 9, 2015 No. 439-V, entered into force on January 11, 2016);
other international agreements concluded by the Republic of Kazakhstan with the EAEU member States, other states, international organizations and entities.
The Code of the Republic of Kazakhstan "On Customs Regulation in the Republic of Kazakhstan" (hereinafter referred to as the TC RK), being an act of national legislation, extends its effect to legal relations related to the import of goods into the Republic of Kazakhstan and their export from the Republic of Kazakhstan as part of the unified customs territory of the EAEU.
Courts should keep in mind that decisions of the EAEU's permanent regulatory body, the Eurasian Economic Commission (hereinafter referred to as the Commission), adopted within its authority, are subject to the provisions of Article 4 of the Constitution on the priority of international treaties ratified by the Republic of Kazakhstan over its laws.
The Commission's decisions infringing on the constitutional rights and freedoms of man and citizen have no priority over the regulatory legal acts of the Republic of Kazakhstan.
According to paragraph 99 of the Statute of the EAEU Court (Appendix No. 2 to the EAEU Treaty dated May 29, 2014), acts of the EAEU Court issued in accordance with its competence are binding on the parties to the dispute on which they were issued. In this regard, the acts of the EAEU Court should be taken into account by the courts when resolving disputes related to the application of the EAEU law norms, the compliance of which with the EAEU Treaty was the subject of consideration by the EAEU Court.
In accordance with part two of Article 72 of the Civil Procedure Code of the Republic of Kazakhstan (hereinafter referred to as the CPC), the burden of proof in cases specified in Chapter 29 of the CPC is placed on state authorities, local governments, public associations, organizations, officials and civil servants whose acts, actions (inaction) are being appealed.
In this regard, when assessing the compliance of a declarant or customs representative with the norms of customs legislation, one should proceed from the presumption of the reliability of the information provided by him, the burden of refuting which is assigned to the state revenue authority.
When considering disputes, all uncertainties and unresolved issues of the customs legislation of the EAEU and (or) the Republic of Kazakhstan are accepted in favor of the declarant, the customs representative.
In accordance with paragraph 1 of Article 38 of the EAEU Customs Code, the provisions governing the determination of the customs value of imported goods are based on the general principles and rules established by Article VII of the General Agreement on Tariffs and Trade of 1994 (hereinafter referred to as GATT 1994) and the Agreement on the Application of Article VII of the General Agreement on Tariffs and Trade of 1994.
The customs value of goods and information related to its determination should be based on reliable, quantifiable and documented information (paragraph 10 of Article 38 of the EAEU Customs Code).
When considering a dispute in court, the customs authority may provide evidence refuting the accuracy of the information provided by the declarant.
Courts should correctly determine the range of circumstances to be proved in this category of disputes, including the following:
the presence of signs of unreliability of determining the customs value;
the validity of the decision on the inadmissibility of the declarant's use of the first method of determining the customs value – at the transaction price of imported goods, taking into account the requirements of Article 39 of the EAEU Customs Code;
the application of a certain method of customs value with the justification of the impossibility of consistently applying all previous methods;
the validity of the backup method.
According to the rule set out in paragraph 15 of Article 38 of the EAEU Customs Code for the consistent application of methods for determining customs value when it is impossible to use the first method (for the transaction value of imported goods), each subsequent method is applied if the customs value cannot be determined by using the previous method.
Courts should take into account that if it is impossible to apply the first method, consultations may be held between the state revenue authority and the declarant in order to reasonably choose the cost basis for customs valuation – the value of transactions with identical or similar goods.
The procedure and timing of consultations between the state revenue authority and the declarant is provided for by the Order of the Minister of Finance of the Republic of Kazakhstan dated February 23, 2018 No. 264 "On approval of the Rules and timing of consultations".
When considering disputes related to the correctness of the choice of the method of determining the customs value, the state revenue authority has the right to refer to its lack of price information for using the appropriate method if it confirms the impossibility of obtaining such information or if the declarant refuses to provide the necessary information in the framework of consultations with him.
When assessing the validity of the first method of determining the customs value of imported goods, courts should be guided by the provisions of Articles 38, 39 and 40 of the EAEU Customs Code, bearing in mind that the transaction value of imported goods cannot be considered documented, quantified and reliable if the declarant has not provided evidence of the conclusion of the transaction on the basis of which the goods were purchased, in any form that does not contradict the law, or the price information contained in such a transaction does not correlate with the quantitative characteristics of the goods., either there is no information about the terms of delivery and payment of the goods, or there is evidence of its unreliability, as well as if there is no other information relevant to determining the value of the transaction in the sense of the above norms of the EAEU Labor Code.
The identification of individual deficiencies in the design of documents submitted by the declarant (contracts, specifications, invoices for imported goods, and others) that do not affect the essential terms of the transaction and do not refute the fact of concluding a transaction on certain conditions does not entail the illegality of the declarant's use of the first method.
By virtue of Articles 325, 326 of the EAEU Customs Code, the customs authority has the right to request both before and after the release of goods the documents necessary to establish the accuracy and completeness of the verified information stated in the customs declaration and (or) information contained in other documents.
When verifying documents and information prior to the release of goods, courts should take into account that, according to paragraph 4 of Article 325 of the EAEU Labor Code, a request may take place in the following cases::
The documents submitted at the time of filing the customs declaration or submitted at the request of the state revenue authority do not contain the necessary information or do not properly confirm the stated information.;
The state revenue authority has identified signs of non-compliance with the provisions of the EAEU Customs Code and other international treaties and acts in the field of customs regulation and (or) legislation of the member states, including the unreliability of information contained in such documents.
Control of the customs value of goods is carried out by state revenue authorities in accordance with the Regulation on the Specifics of Customs Control of the Customs Value of Goods Imported into the Customs Territory of the EAEU, approved by Commission decision No. 42 dated March 27, 2018 (hereinafter referred to as the Regulation).
To draw the attention of the courts to the fact that paragraph 5 of the Regulation contains a list of circumstances that are signs of an unreliable determination of the customs value of goods.
By virtue of paragraph 5 of Article 325 of the EAEU Labor Code and paragraph 7 of the Regulation, a request for documents and (or) information, including written explanations, must be justified and contain:
a list of signs indicating that the information stated in the goods declaration and (or) the information contained in other documents has not been properly confirmed or may be unreliable;
list of requested documents and/or information;
deadlines for the submission of such documents and/or information, including written explanations.
When controlling the customs value of goods, the list of documents and (or) information, including written explanations, requested by the customs authority from the declarant is provided for in paragraph 4 of Article 325 and paragraph 1 of Article 326 of the EAEU Customs Code.
The list of documents and information provided for in paragraph 8 of the Regulation, which may be requested by the state revenue authority during the control of the customs value of goods, is not exhaustive.
The final list of documents and information, including written explanations, is determined by the customs authority, taking into account the identified signs of unreliable determination of the customs value of imported goods, as well as taking into account the terms and circumstances of the transaction, physical characteristics, quality and reputation of imported goods (paragraph 7 of the Regulation).
When resolving disputes related to the determination of the customs value of goods, courts should establish which signs of an unreliable declaration of customs value were identified by the state revenue authority and confirmed during customs control, including taking into account documents (information) collected by the customs authority and additionally submitted by the declarant.
Failure by the declarant to provide additional documents (information) substantiating the declared customs value of the goods does not entail a decision by the customs authority to amend (supplement) the information stated in the customs declaration if the declarant had objective obstacles to submitting the requested documents (information) and appropriate explanations were given to the customs authority.
In accordance with Articles 325, 326 of the EAEU Customs Code, based on the results of customs value control, when establishing the facts of an unreliable declaration of customs value, the customs authority makes a decision on making changes (additions) to the information stated in the customs declaration.
Due to the fact that judicial proceedings should not replace the implementation of customs control in the relevant administrative procedure, new evidence is recognized as relevant to the case and may be accepted (claimed) by the court if the person requesting it has justified the existence of objective obstacles to obtaining this evidence before the contested decision of the state revenue authority.
New evidence may be accepted by the court if the state revenue authority has not provided the declarant with the opportunity to eliminate doubts about the authenticity of the declared customs value.
If there are no provisions in the acts of customs regulation on certain issues of valuation of goods for customs purposes, their lack of completeness or certainty, the courts may also take into account the advisory opinions, information and recommendations of the World Customs Organization adopted in accordance with paragraph 2 of Article 18 of the Agreement on the Application of Article VII of GATT 1994.
The issues of classification of goods according to the unified Commodity nomenclature of foreign economic activity of the EAEU (hereinafter referred to as HS) are regulated by Chapter 3 of the EAEU Labor Code.
In case of incorrect classification of goods during their customs declaration, the customs authority has the right to make decisions on the classification of goods (paragraph 2 of Article 20 of the EAEU Customs Code).
The court verifies the validity of the classification decision by evaluating the evidence provided by the customs authority and the declarant confirming information about the features (properties, characteristics) of the declared goods that are important for its correct classification according to the Customs Code of Foreign Economic Activity. At the same time, the court should be guided by the Basic Rules of Interpretation of the Customs Code of Foreign Economic Activity, notes to sections, groups, legally binding commodity items, and Commission decisions and clarifications related to the disputed product, adopted in accordance with paragraphs 1, 2, 6 of Article 22 of the EAEU Labor Code, as well as decisions and clarifications of the national authorized body on the classification of certain types of goods accepted on the basis of Article 42 of the Labor Code of the Republic of Kazakhstan.
When verifying the arguments of the parties to the dispute on the correctness of the classification of goods by the courts, the Explanations to the HS recommended by the Commission as auxiliary working materials designed to ensure a uniform interpretation and application of HS, as well as recommendations and clarifications on the classification of goods given by the World Customs Organization in accordance with Article 7 of the International Convention, may be taken into account.
The basis for concluding that the disputed classification decision is illegal is the incorrect classification of the goods by the customs authority. If there is sufficient evidence, the judicial act may also contain a conclusion about the correctness of the classification made by the declarant and the absence of grounds for the customs authority to make a decision on a different classification of the goods.
In accordance with subparagraph 1) Paragraph 3 of Article 40 of the Labor Code of the Republic of Kazakhstan, the decision on the classification of goods is binding, and therefore the decision on the classification of goods, on which the notification of the results of the inspection and (or) notification of the elimination of violations is based, is subject to mandatory appeal.
In accordance with Article 475 of the Labor Code of the Republic of Kazakhstan, notification of the results of the inspection and (or) notification of the elimination of violations (hereinafter referred to as the notification) may be appealed to the authorized body by the person against whom the notification was issued, or by his representative.
The decision of the authorized body taken based on the results of consideration of the complaint against the notification is not subject to judicial challenge, since it does not entail the legal consequences provided for in the first part of Article 293 of the CPC. If the notification remains unchanged, the specified notification may be challenged in court, and if it is canceled in part, a notification of the results of consideration of the complaint against the notification.
In this regard, the judge refuses to accept an application to challenge the decision of the authorized body, adopted as a result of consideration of the complaint against the notification on the basis of subparagraph 1) of the first part of Article 151 of the CPC, and in case of initiation of a civil case, the court terminates proceedings on it in accordance with subparagraph 1) of Article 277 of the CPC.
The judicial procedure for considering applications challenging the results of a customs inspection and actions (inaction) of officials of state revenue bodies is regulated by Chapter 29 of the CPC.
The time limit for filing an application to the court established by the first part of Article 294 of the CPC is calculated: in case of challenging notifications directly in court – from the date of its delivery in accordance with paragraph 10 of Article 417, paragraph 4 of Article 419 of the Labor Code of the Republic of Kazakhstan, and in case of a preliminary appeal to the authorized body – from the day when the declarant, the customs representative became It is known about the decision of this body to dismiss his complaint in full or in part. If, as a result of consideration of the complaint, a new notification is issued to the declarant or customs representative, the appeal period is calculated from the date of its delivery in accordance with the established procedure.
The act of customs inspection (desk, on-site), based on the results of which a notification was issued, is not subject to judicial appeal.
The legality of the notification is checked taking into account the conclusions set out in the customs inspection report.
An act of customs inspection may be appealed if the declarant does not agree with its conclusions, which did not result in a notification, but affect his rights and obligations. An appeal against an inspection report is regarded as an appeal against the actions of customs officials.
According to article 4 of the Constitution, this normative resolution is included in the current law, is generally binding and comes into force from the day of the first official publication.
Chairman of the Supreme Court of the Republic of Kazakhstan
J. Asanov
Judge of the Supreme Court of the Republic of Kazakhstan, Secretary of the plenary session
G. Almagambetova
© 2012. RSE na PHB "Institute of Legislation and Legal Information of the Republic of Kazakhstan" of the Ministry of Justice of the Republic of Kazakhstan
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