Given the complexity of EU customs compliance, it is possible that errors will occur when filing import or export declarations. Some errors may result in serious problems, such as declaring an incorrect customs value or incorrect classification in the Combined Nomenclature. Other errors are more “clerical,” meaning that one could argue that an error has been made, but that the consequences should be limited. Examples of errors of a clerical nature include using incorrect forms, declaring incorrect codes (not being incorrect customs classification) or not referring to the applicable preferential regime. The question is whether such clerical errors should result in monetary damages. In many cases, the customs authorities feel that clerical errors cannot be “repaired” and, as a result, the customs agent and/or importer is faced with financial damages. The ECJ, however, believes that the revision of a customs declaration can be an option. In case of an accepted revision, the clerical error should not result in a customs debt and, by extension, financial damages.
Recently, the ECJ ruled in the following case. A company manufacturing earth-moving machinery imported various items that are incorporated into that machinery from outside the EU. The customs duties on the imported items were suspended under an Inward Processing Relief (IPR). The machinery was sold to customers inside and outside the EU. For earth-moving machinery that is sold to non-EU customers, no duties are payable on the non-EU items that are incorporated in that machinery, provided that compliance with the IPR regime is ensured. One of the compliance obligations is to file a proper export declaration when the earth-moving machinery, incorporating non-EU items, is exported to non-EU destinations. The export declaration should refer to the appropriate IPR regime and the fact that it concerns a re-export of goods for which the duties are suspended. This reference should be made by mentioning code “31 51.” Instead of this code, the Terex customs agent inserted the code “10 00,” indicating an export of EU goods.
The customs authorities considered the error to have the effect of wrongly conferring on the goods at issue the customs status of EU goods. The company did not comply with the IPR obligations. In particular, the company did not properly notify customs concerning the re-export, which is obligatory under the IPR procedure. Therefore, the customs authorities assessed the duties on the non-EU items that were imported under the IPR regime.
The company sought to revise the export declarations by amending the declared code “10 00” and inserting the appropriate code “31 51”. However, the customs authorities refused to amend the declarations.
The VAT and Duties Tribunal in Edinburgh referred the following question to the ECJ: “Does the Customs Code, and in particular Article 78, permit revision of the declaration to correct the customs procedure code and if so, are HMRC required to amend the declaration and to regularize the situation?” In addition to this question, the Tribunal raised 4 more questions to the ECJ.
The ECJ ruled that the EU customs legislation allows the revision of both technical errors and omissions and errors of interpretation of the applicable law. Therefore, the situation at issue falls within the scope of article 78 of the Community Customs Code (CCC). This article provides that the customs authorities may, on their own initiative or at the request of the declarant, amend the declaration, that is to say re-examine it. The customs authorities are to take into account the possibility of reviewing the statements contained in the declaration to be revised and in the application for revision. If the revision is, in principle, possible, the customs authorities should reject the application for the revision by reasoned decision or carry out the revision.
The ECJ also noted that if the revision indicates that the IPR provisions were applied on the basis of incorrect or incomplete information and that the objectives of the IPR procedure are not threatened, the customs authorities must take the measures necessary to correct the situation, taking into account the new information available to them. Where it is apparent in the final analysis that the import duties were not legally owed, the only available remedy for correcting the situation is to remit those duties. That remission is to be made if the criteria for obtaining a refund of duties are fulfilled, in particular that there has been no manipulation by the declarant and that the remission request has been filed on time.
Based on this and previous ECJ decisions, one can conclude that the ECJ envisages more options to revise import or export declarations than the EU customs authorities. And, if a revision is allowed, such a revision can result in a refund or remittance of overpaid duties. Therefore, if customs authorities subject companies to a duty assessment or if companies believe that they have overpaid the relevant duties, it is advisable to review the options for revising the submitted declarations since such a revision could result in a lower customs debt.