Customs Valuation: Can Customs Use National Databases?
- Arne Mielken
- Aug 19, 2024
- 4 min read
🛃 Can customs authorities rely on national databases to determine the customs value of imported bulk goods? Let's explore this critical issue and its implications for your trade operations.
What Questions We Will Answer in This Blog:
Is it lawful to reject an importer’s declared value if they fail to provide sufficient proof?
Can customs authorities bypass other valuation methods due to a lack of detailed product information?
How reliable is using filtered data from national databases in determining customs value?
Introduction
When importing goods, especially in bulk, determining the accurate customs value is crucial. Recently, a case before the Court of Justice of the European Union (CJEU) brought attention to whether customs authorities can use national databases to establish the customs value when importers fail to provide adequate information. This issue is particularly relevant for professionals managing import and export operations, as it directly impacts compliance, duty payments, and the smooth clearance of goods.
Abbreviations We Use in This Blog
To facilitate understanding, we'll define the abbreviations used in this blog:
CJEU: Court of Justice of the European Union
UCC-IA: Union Customs Code Implementing Act
TARIC: Integrated Tariff of the European Union
Can Customs Reject Declared Value Without Proof?
When customs authorities express doubt about the declared transaction value, they may request additional information under Article 140(1) UCC-IA. However, if the importer fails to provide satisfactory proof, can this be grounds for rejecting the declared value?
In the case under review, Hungarian customs authorities doubted the accuracy of the declared value for imported bulk goods. When the importer couldn't provide sufficient proof, the authorities rejected the declared value under Article 140(2) UCC-IA. The customs value was then determined using the "fall-back" method outlined in Article 144(2) UCC-IA.
What Does This Mean for Importers?
When importing bulk goods, ensuring that all required documentation and proof are readily available is vital. Failure to do so can lead to the rejection of the declared value, potentially resulting in higher duties and VAT charges. Customs professionals must ensure they provide detailed information, especially in cases where the goods’ characteristics are not immediately evident.
Can Secondary Valuation Methods Be Excluded Due to Lack of Product Information?
Another key question is whether customs can bypass other valuation methods due to insufficient product details. The Hungarian customs authorities filtered the database by declaration date, TARIC code, and country of origin because of inadequate information about the goods' essential characteristics. This filtering led to the exclusion of other secondary valuation methods.
The Implications for Your Operations
This scenario highlights the importance of providing comprehensive product details to customs authorities. Without this information, customs may resort to less favourable valuation methods, potentially increasing the cost of importation. It's crucial for customs managers and import/export professionals to work closely with suppliers and ensure all relevant product details are documented and submitted.
Is Using National Databases for Customs Valuation Reliable?
The final issue at hand is the reliability of using filtered data from national databases to determine customs value. The Hungarian authorities used a national database to select unit prices, which were then multiplied by the total weight of the imported products. However, concerns arise regarding the transparency and fairness of this approach, particularly if the database filtering process isn’t documented and shared.
Risks and Considerations
Using national databases can be a double-edged sword. On the one hand, it offers a practical solution when information is lacking. On the other hand, it may lead to unfair valuations if the process lacks transparency. Import and export professionals must know how customs authorities arrive at their decisions and ensure they are equipped to challenge any unjustified valuations.
Conclusion
Determining customs value is a complex but crucial aspect of import/export operations. This case underscores the need for transparency, thorough documentation, and clear communication with customs authorities. As the CJEU deliberates on these issues, customs professionals must stay informed to adapt their practices accordingly.
Expert Recommendations
Always Provide Comprehensive Documentation: Ensure all necessary documents and proof are ready when declaring customs value.
Be Proactive with Product Information: Detailed product descriptions and characteristics can prevent the exclusion of favourable valuation methods.
Challenge Unjust Valuations: If customs authorities use databases, demand transparency in the filtering and valuation process.
How We Can Help
📈 Customs Manager Ltd offers comprehensive support for customs valuation issues, including bespoke consultancy and practical assistance. We provide public, in-house, and on-demand training tailored for customs professionals, importers, exporters, and their partners. Our services also include UK import and export customs clearance. For more details, visit Customs Manager Ltd.
Sources That We Base Our Information On in This Blog
Where To Find More Information On This Topic
For a deeper dive into customs valuation methods and related legal frameworks, visit our Knowledge Hub Content Library and read more on the following topics.
Customs Valuation: What is that, and how Do I determine this?
Customs Valuation: Inclusive software - part of the product's price?
Maximizing Profits through Strategic Customs Valuation Techniques
EU Customs Valuation Compendium: Essential Guide for Businesses
Unlocking the Mysteries of Binding Valuation Information in EU Customs: ECCE Seminar
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Disclaimer
The information provided in this blog post is for educational purposes only and should not be construed as legal advice. Consulting with legal professionals or specialists for specific compliance requirements and guidance is recommended. Book a free call with our expert at Customs Manager Ltd.
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