LETTER OF THE MINISTRY OF THE INCOME AND CHARGES OF UKRAINE

of July 24, 2013 No. 12884/7/99-99-10-03-02-17/2580

Rather court practice concerning appeal of decisions on determination (adjustment) of customs value

The analysis of judgments on cases on claims of customs applicants to the customs authorities connected with appeal of decisions on determination of customs value of goods confirms the legal line item created by court concerning application of minor methods of determination of customs value by customs authorities. The essence of the disputable relations is that customs authorities in case of the solution of question of customs clearance of the imported goods, without having agreed with the declared cost determined by the first method (the agreement price), determine it independently, without observance of conditions concerning the sequence of application, by the sixth method (reserve). As a result, subjects of managing have obligation concerning payment of the additional amounts of the VAT and import duty.

According to Article 266 of the Customs code of Ukraine determination of customs value of goods which are imported to Ukraine can be performed by such methods:

1) at the agreement price concerning goods which are imported (transaction cost);

2) at the price of the agreement of rather identical goods;

3) at the price of the agreement of rather similar (similar) goods;

4) on the basis of subtraction of cost;

5) on the basis of value adding (the calculated cost);

6) reserve.

The basic is the method of determination of customs value of goods at the agreement price concerning goods which are imported (transaction cost).

If customs value cannot be determined by the first method, the procedure of consultations between customs authority and the customs applicant for the purpose of the reasonable choice of the bases for determination of customs value is carried out. During such consultations the customs authority and the customs applicant can perform exchange of information which is available for each of them on condition of observance of requirements concerning its confidentiality.

In case of impossibility of determination of customs value of goods which are imported to Ukraine the price at which the estimated identical or similar (similar) goods were sold in Ukraine to the buyer who is not connected with the seller can be taken as basis.

At the same time each following method is applied if customs value of goods cannot be determined by application of the previous method.

The Supreme Court of Ukraine on May 14, 2013 (case No. of 21-130 13), refusing to East customs allowance of the application about review of the judgment of cassation instance specified that in case of determination of customs value of goods by the sixth (reserve) method, the customs authority according to requirements of Article 266 of the Customs code of Ukraine shall motivate in the decision on determination of customs value of goods of the reason of impossibility of application of consistently previous five methods.

The similar legal line item is stated by the Supreme Court of Ukraine in resolutions of 21.01.2011 (case No. of 21-56 10), of 07.02.2011 (case No. 2176a 10), of 14.11.2011 (case No. of 21-213 11), of 06.02.2012 (case No. of 21-418 11), of 03.07.2012 (case No. of 21-197 12).

In particular, in these decisions the Supreme Court of Ukraine notes that "... discretionary functions of customs authorities have legislative restrictions in disagreement cases with the declared customs value. To it, in particular, the procedure of consultations between customs authority and the customs applicant for the purpose of the reasonable choice of the bases for determination of customs value and obligation of the consecutive choice of methods (from the first to the sixth) determinations of customs value of goods belong. Therefore, conclusion of courts concerning legitimacy of actions of the defendant concerning determination of customs value of goods by the sixth method without consecutive application previous to five as it is established by part five of Article 266 of the Customs code of Ukraine, and also without reasons for impossibility of their application, is wrong and such which does not meet the requirements of the current legislation governing such relations".

"... in case of disagreement of customs authority with customs value of the imported goods he according to requirements of Article 266 of the Customs code of Ukraine shall carry out the procedure of consultations during which he would shall come to conclusions concerning application of this or that method of determination of customs value of goods, at the same time each following method is applied in case of impossibility of application previous with reduction of the corresponding arguments".

Thus, the court practice above given confirms that customs authorities in the decision on determination of customs value of goods shall prove impossibility of application of each of the previous methods, including impossibility of recognition of the customs value declared by the customs applicant.

However, specified does not demonstrate that the fact of application of reserve method of determination of customs value of goods is the unconditional basis for cancellation of the decision of customs authority. Especially as the Supreme Court of Ukraine has no powers to check correctness of the established facts of the case. As a result, if to determine courts of the previous instances that the customs authority consistently applied methods of determination of customs value of goods and proved impossibility of application of each of them, and also if the customs applicant refused to provide additional documents, then such actions of customs authority will be recognized as lawful. The certificate of it are resolutions of the Supreme Court of Ukraine of 25.12.2012 No. 21399a 12, of 09.10.2012 No. 21-252a12.

It is necessary to pay attention that in the given court practice there is a speech about application of provisions of the Customs code of Ukraine which was effective to the introduction in action of the new Customs code of Ukraine of 13.03.2012. At the same time, the above-stated conclusions of the Supreme Court of Ukraine are urgent and on the present.

So, according to Article 54 of the existing Customs code of Ukraine control of correctness of determination of customs value of goods is performed by customs authority during customs control and customs clearance by check of numerical value of the declared customs value. The customs authority for the purpose of control of correctness of determination of customs value of goods has the right:

make sure of the reliability or accuracy of any statement, the document or calculation given for the purposes of determination of customs value;

in writing to request from the customs applicant or person authorized by him stipulated in Clause 53 Customs codes of Ukraine additional documents and data if it is necessary for decision making about recognition of the declared customs value.

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