Customs Compliance & Risk Management
Knowledge
Customs-competent staff: nice to have or a must?
Customs compliance is full of challenges and ‘surprises’ from counterparties, customs brokers, carriers and other persons involved. Unpredictable risks and conditions are the inevitable companions of international trade. However, there are many areas where companies might keep most of the risks under their control. What are these areas? What should companies do to mitigate such risks and meet the related challenges?
The biggest challenges in ensuring customs compliance in a company
‘Compliance starts from managers’ awareness’, ‘You can want the best specialists, but you can choose only among those available and fitting into your budget’, ‘Frequent legal changes and lack of guidance introduce instability’ - these and many more aspects were highlighted by experts from various countries representing business, customs, and academia during the 12th Authors’ Meeting.
Q&A
Software installation and origin of goods
Reader's question: ‘We export certain devices to Ukraine. The product-specific rule is based on the value criterion. Can the value of expensive software, which was created and developed in the EU, be counted as the value of originating materials?’ To answer this question, we review various aspects of the topic, which is becoming increasingly important, as more and more goods do not function without software.
Case law
Alcohol turned into water in a customs warehouse: who pays the customs bill?
A customs warehouse stored bottled alcohol (vodka). Customs audited the warehouse, took a sample, and found that there was water instead of vodka in the bottles! Customs ordered the warehouse to pay €308,455 customs debt (import duties and taxes, fines and interest). A dispute arose regarding who must pay the customs debt, as the customs warehouse is not obliged to take samples of the goods. Let's look at the clarification of the Supreme Administrative Court of Lithuania (SACL) in this case.
ECJ rules on liability of indirect customs representative
This article looks what the ECJ decided in its recent Case C-714/20 (U.I.). In addition, the article will analyse this case in light of the previous ECJ cases on similar matters. It also touches upon the deductibility of the import VAT by the forwarders and carriers. Finally, the article looks at the practical implications of this case for the EU, particularly the Netherlands and some other EU Member States.
Extinction of customs debt - does it include VAT and excise?
Knowing how provisions of one or another customs and tax legislation are applied, protects business from financial and time losses intended for the resolution of disputes in courts. In this review of the judgement of the Court of Justice of the European Union, we draw attention to the aspects related to excise duty and VAT debt for goods illegally imported into the EU from the third countries - whether it is extinguished together with the import duty debt.
Overviews and comments
Resolving trade disputes beyond borders: the role of the WTO
In international trade, the policies of the government of the trading partner such as the country of destination for exports may affect the business of a company. If a company conducting international trade believes that another member country of the World Trade Organization (WTO) is not complying with its obligations under a WTO Agreement and is creating trade barriers then what remedy is available under international trade law? Who can help a business entity in such a situation, which is beyond the jurisdiction of the home country? Is there any effective dispute resolution mechanism available under international trade law? How does it work? What are its strengths and weaknesses? What are the timelines for dispute resolution? How does it affect business environment? In this article these important aspects are explained for a better, certain, predictable, and fair international trading environment.
Targeting compliance in the minefield of customs (trade) rules
‘I would recommend trade compliance to anyone with the ability to distil complex, rigid structures down to a practical reality. Trade compliance rules are a minefield that even the most seasoned professionals cannot confidently claim they have a complete grasp of. If you're willing to constantly be challenged and willing to continuously learn you'll probably fit in well.’– says Samuel Draginich, Senior Trade Compliance Manager, EMEA (Europe, Middle East, and Africa), Amazon EU and Member of the Editorial Board of CCRM journal.
Types of import and export declarations in the EU: have you set the code correctly? (Part)
In the previous issue of the CCRM journal, it was overviewed what codes should be indicated in case of import or export of goods in the first subdivision of box 1 of the single administrative document (SAD). As the SAD box 1 also has a second subdivision, let's overview what codes go into it and what are the rules of filling it out.
Customs broker’s profession: to be or not to be licensed?
This is the third article in our study of customs broker activity in different countries. The first one concerned the peculiarities of the customs broker profession in different EU countries. The second one contained insights and news not only from the EU, but also from the UK and Canada. We dedicate the third article to the approaches of regulation of customs broker’s profession in different countries. For this purpose, we conducted a small survey among our readers before. The results turned out to be quite interesting, especially in the context of their comparison with the current situation in various countries.
Learning the lingua franca of international trade
What is the language of international trade? Who should learn it? Why it is important to learn? How to use this language for international trade? What are the international themes in the development and application of this language? What are its advantages and disadvantages? How to develop the skill of using this language? This article finds answers to these important questions for the information and learning of the international trading community.
EU law
EU law news: August/September 2022
News in week 39: new package of restrictive measures against Russia including measures to prevent circumvention; Lithuanian customs informs about cases of mis-classification of goods to circumvent sanctions, and provides numerous examples; amendment of Convention on a common transit procedure; EU and Kosovo agree to apply an alternative set of rules of origin based on those of the amended PEM Convention; and more news!
Country update
Ukraine customs and trade news: August/September 2022
News at a glance: amendments to the Customs Code of Ukraine; customs ‘visa-free’ regime; updating the Customs Tariff of Ukraine; termination of safeguard investigations; upgrade of the free trade agreement between Ukraine and the UK; the Digital Trade Agreement between Ukraine and Great Britain.