THE IRON FIST OF THE CUSTOMS ADMINISTRATION

I hear from tax lawyers and tax advisors that it is nowadays more difficult than before to reach a fair agreement with tax officials on disputed points in the context of income tax and VAT audits. This appears to be no different in the field of customs and excise duties.

I hear from tax lawyers and tax advisors that it is now more difficult than before to reach a fair agreement with tax officials on disputed points in the context of income tax and VAT audits. This appears to be no different in the field of customs and excise.

The general impression is that the General Customs and Excise Administration (GCEA) is now taking a tougher stance towards companies that commit a breach of customs or excise regulations and is less cautious with its powers to institute criminal proceedings, take precautionary measures and suspend or withdraw authorizations than was previously the case.

In cases where payment of (additional) import duties is claimed, the GCEA's tougher stance can largely be explained by the pressure that the European Commission imposes on national customs authorities to effectively collect those import duties as quickly as possible and, above all, to make those import duties available to the EU as quickly as soon as possible as the import duties are regarded as the EU's own resources.

Failure to comply with these obligations may result in the Member States themselves being obliged to pay the own resources to the EU, even if they have not collected these amounts from the actual customs debtors. For example, the Court of Justice earlier confirmed the liability of the United Kingdom for the loss of own resources that was the result of insufficiently effective controls by the United Kingdom on undervaluation when importing mainly textiles and shoes from China (see ECJ March 8 2022, C-213/19, Commission v United Kingdom).

Companies that do not want to experience the increased strictness in the enforcement of customs and excise regulations would do well to strengthen and expand their efforts to act as compliantly as possible.

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Written by Jurgen Gevers.