Inaccurate Customs Declaration in Russia and the EAEU: Liability & Fines

 

March 30, 2024

BRACE Law Firm ©

 

One of the most critical tasks that customs authorities perform is customs control over goods moved across the customs border of the Eurasian Economic Union (the "EAEU"). One form of customs control is the verification of the accuracy and completeness of the information specified in customs documents. Customs authorities frequently identify instances of inaccurate declaration or non-declaration of goods.

In accordance with Article 104 of the Customs Code of the EAEU (the "Customs Code"), goods moved across the EAEU customs border are subject to customs declaration. This involves declaring information to the customs authority using a customs declaration regarding the goods, the selected customs procedure, and/or other information necessary for the release of goods (Subparagraph 35 of Paragraph 1 of Article 2 of the Customs Code).

Customs declaration is a necessary and mandatory step for further processing, payment of duties, compliance with non-tariff regulation measures, and the release of these goods. All batches of goods placed under one of the 17 customs procedures, as well as certain goods for personal use, vehicles, and supplies, are subject to declaration.

This article examines issues regarding the completion of customs declarations that affect the accuracy of the declaration, the status of the declarant, its rights and obligations, inaccurate declaration or non-declaration of goods, and the liability for such actions.

Violation of Requirements for Customs Declaration Content

Before considering inaccurate declaration, it is necessary to review the procedure for completing a customs declaration, as violations of this procedure are often linked to inaccurate declaring.

A customs document that contains information about goods and other information necessary for the release of goods is called a customs declaration (Subparagraph 32 of Paragraph 1 of Article 2 of the Customs Code).

Completing a customs declaration for goods is one of the most important stages in moving goods across the EAEU border. Correctly completing all boxes ensures the unimpeded placement of the transported cargo under a customs procedure, which is the first stage of declaration.

The Customs Code provides for two forms of customs declaration: electronic and written. In most cases, submission occurs via electronic declaration (except for simplified procedures where information may be provided in simple written form). In this process, the declarant generates the declaration using special software and sends it to the customs authority of declaration via communication channels. Electronic documents confirming the information declared in the declaration must be attached. The set of documents may be submitted to any customs office authorized to receive them, regardless of the declarant's place of registration or the location of the cargo.

There are several types of customs declarations:

• The declaration for goods is the most common but not the only form of customs documentation. It applies when placing products under procedures (excluding transit) and contains data necessary for calculating and paying taxes and fees, applying non-tariff restrictions, protecting intellectual property rights, and for statistical purposes. The customs value declaration is an integral part of the declaration for goods, specifying data on the chosen method for calculating the value of products and describing and calculating all expenses during a foreign trade transaction.
• The transit declaration is used during the transit of products through EAEU territory (transit procedure).
• The passenger customs declaration applies when processing goods moved by individuals for their personal use.
• The declaration for a transport vehicle is used when processing international transport vehicles.

Let us focus in more detail on the procedure for completing a declaration for goods, as it is the most common form of customs declaration.

The Customs Code, Federal Law No. 289-FZ dated August 3, 2018, On Customs Regulation in the Russian Federation and on Amending Certain Legislative Acts of the Russian Federation, Commission of the Customs Union Decision No. 257 dated May 20, 2010, On the Form of the Declaration for Goods and the Procedure for Filling It Out (the "Decision No. 257"), as well as specific regulations and technical rules, determine the procedure for completing a customs declaration. Special documents also regulate the completion of specific boxes in the declaration.

A declaration for goods is used when placing goods under customs procedures, except for the customs transit procedure, and in cases provided for by the Customs Code, for the customs declaration of supplies (Paragraph 3 of Article 105 of the Customs Code). Annex No. 2 to Decision No. 257 provides the form for the declaration for goods.

Organizations and individual entrepreneurs act as declarants. Individuals who are not individual entrepreneurs are not declarants when submitting declarations for goods, because a passenger customs declaration, rather than a declaration for goods, is completed when importing goods for personal use.

The following information must be specified in the declaration for goods (Paragraph 1 of Article 106 of the Customs Code):

• The declared customs procedure;
• The declarant, customs representative, sender, recipient, seller, and buyer of the goods;
• International transport vehicles and transport vehicles used (or to be used) to transport goods across the EAEU customs territory;
• The goods (specifically, the name, description, commodity code according to the Commodity Nomenclature of Foreign Economic Activity (the "TN VED"), origin of goods, name of the country of departure and country of destination, manufacturer, description of packaging, price, quantity in kilograms (gross weight and net weight) and in supplementary units of measurement, and the customs value);
• The calculation of customs payments, special, antidumping, and countervailing duties (rates, benefits, tariff preferences, calculated amounts, and the applied exchange rate);
• The transaction involving the goods and its terms;
• Compliance with prohibitions and restrictions in accordance with Article 7 of the Customs Code;
• Compliance with the conditions for placing goods under a customs procedure;
• Documents confirming the information stated in the declaration for goods specified in Article 108 of the Customs Code;
• Documents confirming compliance with the legislation of member states, the control of which is entrusted to customs authorities;
• The person who completed the declaration for goods and the date of its preparation;
• Other information determined by the Commission of the Customs Union.

When determining the procedure for filling out the declaration for goods form, the Commission of the Customs Union may reduce the amount of information required in the declaration for goods depending on the customs procedure, categories of goods, persons moving them across the customs border, and the type of transport used (Paragraph 2 of Article 106 of the Customs Code).

A declaration for goods consists of a main sheet and supplementary sheets. Supplementary sheets are used in addition to the main sheet if information on two or more types of goods is declared in one declaration. A single declaration for goods may declare information for no more than 999 items.

If goods contained in a single batch are declared for placement under different customs procedures, the declarant must submit separate declarations for goods for each customs procedure.

The declarant must complete the declaration for goods in block letters on a computer. If the declaration is in paper form, it must be submitted on A4 sheets and must not contain erasures, blots, or corrections. An electronic copy of the declaration, the structure and format of which are determined by a decision of the Eurasian Economic Commission, must be submitted alongside it. [1]

If there is insufficient space in the boxes of a written declaration, the information that does not fit is specified on the reverse side of the declaration or on additional A4 sheets, which are an integral part of the declaration. In such cases, the corresponding box of the declaration must contain the entry "SEE REVERSE" or "SEE SUPPLEMENT," which are not entered into the electronic copy of the declaration. The reverse side of the main and supplementary sheets must show the box number and the serial number of the declared item (if the information relates to a specific item). All supplement sheets must be numbered.

Classifiers and lists of reference information used for customs purposes are applied when declaring information.

When declaring goods in written form, the declaration must be submitted to the customs authority in three copies. Each copy is numbered in the box located to the left of boxes 2, 8, 14, 18, 21, 25, and 29 of the main sheet and distributed as follows:

• The first copy remains with the customs authority where the goods are declared;
• The second and third copies are returned to the declarant. When placing goods under a customs procedure involving the export of goods from the customs territory, the second copy is submitted to the customs authority located at the place of departure from the customs territory.

Decision No. 257 provides for specific features of completing the declaration boxes depending on the applied customs procedures.

Box 31 is of particular interest, as it must specify information about the declared goods necessary for calculating and collecting customs and other payments, the collection of which is entrusted to customs authorities, applying domestic market protection measures, ensuring compliance with prohibitions and restrictions, taking measures to protect intellectual property rights, identification, and assignment to a single ten-digit classification code according to the TN VED, as well as information about cargo spaces. This box specifies information on the quantitative and qualitative composition of the declared goods and parameters in units of measurement other than the main or supplementary units of measurement. No specific parameters for the quantitative indicator are established. Consequently, the declarant or customs representative may independently determine the parameters of the goods based on the foreign trade contract, commercial, and shipping documents and specify them in the declaration. It is important that these be quantitative characteristics significant for calculating customs payments and applying prohibitions and restrictions.

Information declared in this box is specified starting from a new line with a serial number. For example, under number 1, the name of the goods and manufacturer information are specified, and under number 4 for marked excisable goods — the series, numbers, and quantity of excise or special stamps for each series.

Completing Box 31 for export has its own specifics (Subparagraph 14 of Paragraph 18 of Decision No. 257). For example, regarding goods not subject to export customs duties, information on containers used (or to be used) to transport the goods is not specified under number 3.

If boxes 31 remain unfilled when using supplementary sheets, such boxes must be crossed out with a horizontal line.

In Box 33 "Commodity Code", the first sub-box must contain the ten-digit classification code of the goods according to the TN VED without spaces (Subparagraph 31 of Paragraph 15 of Decision No. 257).

Other information is specified in the second and third sub-boxes. For example, the letter "I" in the second sub-box of Box 33 means that the declared goods contain objects or features of intellectual property objects entered into the customs register of intellectual property objects. The third sub-box specifies the 4-digit code according to the Classifier of Additional Customs Information without spaces,[2] if the TN VED code of the declared item is included in this classifier.

Box 44 specifies information about the documents used to complete the declaration for goods that confirm the declared information for each item. Information about each document is specified starting from a new line with its code according to the Classifier of Types of Documents and Information [3] and, via a "/" separator, a symbol confirming the submission or non-submission of the document upon filing the declaration for goods.

For example, Box 44 might state: 02017/1 172MAD00118241 DATED 03.03.2024, where 02017 is an air waybill; 1 means the document was submitted upon filing the DT; 172MAD00118241 is the air waybill number; 03.03.2024 is the air waybill date.

Filing a declaration for goods does not require the physical submission to the customs authority of the documents specified in Box 44, as documents are uploaded as electronic documents signed with an electronic signature. Furthermore, such documents might not be submitted to the customs authority if they were previously submitted during customs operations or upon request during customs control and are stored by that customs authority in accordance with Article 320 of the Customs Code. In such cases, the information about these documents in the declaration for goods refers to the fact that they were previously submitted.

Box 47 of the declaration for goods specifies information on the calculation of customs payments and other payments whose collection is entrusted to customs authorities, as well as the specifics of their payment.

In Box 54 of the main sheet, the person who prepared the declaration provides their signature, the date of preparation, and certifies the information stated in the declaration with the seal of the declarant or customs representative. Also, for example, if a customs representative performed the declaration, Box 54 under number 1 must specify the number of the document certifying the person's inclusion in the Register of Customs Representatives. Under number 2, the name of the individual who prepared the declaration, the number and date of their ID, their position within the declarant's or customs representative's staff, and their contact telephone number are specified.

Who is a Customs Declarant?

Article 2 of the Customs Code defines a "declarant" as a person who declares goods or in whose name goods are declared.

Customs legislation in Article 83 of the Customs Code establishes an exhaustive list of persons who may enter into legal relationships with the customs authority as a declarant:

• A person who is a party to a transaction with a foreign person based on which goods are moved across the customs border;
• A person in whose name or on whose behalf the above-mentioned transaction was concluded;
• A person having the right of ownership, use, or disposal of goods, if the goods are moved across the customs border outside of a transaction where one party is a foreign person;
• A person who is a party to a transaction concluded with a foreign person or with a person of a member state regarding foreign goods located in the customs territory;
• A person acting as a freight forwarder — when declaring the customs transit procedure;
• A foreign person that is an organization having a representative office or branch created or registered in the territory of an EAEU member state — when declaring customs procedures only regarding goods moved for the internal needs of such representative office or branch;
• A foreign person who is the owner of the goods, if the goods are moved across the customs border outside of a transaction between a foreign person and a person of a member state;
• A foreign person having the right of possession and use of goods, if the goods are moved across the customs border outside of a transaction between a foreign person and a person of a member state — when declaring the customs warehouse procedure, the temporary import (admission) procedure, the re-export procedure, or a special customs procedure;
• Diplomatic missions, consular offices, missions of states to international organizations, international organizations or their missions, and other organizations or their missions;
• A carrier, including a customs carrier — when declaring the customs transit procedure;
• A foreign person who, in accordance with an international treaty of an EAEU member state with a third party, has received a document provided for by such treaty granting the right to export goods from the customs territory — when declaring the customs warehouse procedure, re-export procedure, or export procedure.

Article 84 of the Customs Code generally regulates the rights, obligations, and liability of the declarant. However, it should be noted that customs legislation is an extensive and specific branch of law, and consequently, most legal norms in this field are dedicated to regulating the rights, obligations, and liability of customs relationship participants, including the declarant.

The rights of a declarant under the Customs Code include, among others (Paragraph 1 of Article 84 of the Customs Code):

• Inspecting and measuring goods under customs control and performing cargo operations with them;
• Taking samples and specimens of goods under customs control with the permission of the customs authority;
• Being present during customs control in the form of a customs inspection and customs examination by customs officials and during the taking of samples or specimens of goods by these officials;
• Reviewing the results of research on samples or specimens of the goods they declared available in the customs authorities;
• Appealing decisions, actions, or omissions of customs authorities or their officials;
• Engaging experts to clarify information about the goods they declared.

The obligations of the declarant are listed in Paragraph 2 of Article 84 of the Customs Code. Specifically, the obligations of a customs declarant include:

• Performing the customs declaration of goods;
• Submitting documents to the customs authority confirming the information stated in the customs declaration;
• Presenting the declared goods;
• Paying customs payments, special, antidumping, and countervailing duties or ensuring the performance of the obligation to pay them;
• Complying with the conditions for the use of goods in accordance with the customs procedure or the conditions established for the use of specific categories of goods not subject to placement under customs procedures.

The term "customs broker" is often encountered. Until 2010, while the Customs Code of the Russian Federation was in force, the term "customs broker" was legislatively defined. In the text of the EAEU Customs Code, a "customs broker" became a "customs representative." This is a professional participant in the customs services market who has the right to perform customs operations on behalf of and as instructed by the declarant or other interested persons in the territory of an EAEU member state whose customs authority included it in the register of customs representatives.

The rights and obligations of customs representatives are regulated at the legislative level and are limited to intermediary capabilities with certain representative rights, which precludes the possibility of concluding transactions without a power of attorney or the client's permission. A special contract, which details all the terms of the agreement, must regulate the relationship between the contractor and the customer. Once such a contract (a contract for customs representation) is concluded, the customs representative performs all services based on the client's written authorization.

The declarant bears liability for the non-performance of the above obligations, for stating inaccurate information in the customs declaration, and for submitting invalid documents to the customs representative, including forged documents or those containing deliberately inaccurate (false) information, as discussed further below.

An analysis of judicial practice shows that cases of administrative liability for incorrectly specifying information about the declarant itself or the customs representative do not occur. Nevertheless, such errors may lead to financial losses for the declarant. For example, they may result in the refusal of customs authorities to register a declaration, its adjustment, or an increase in release times, which may lead to increased storage times at a temporary storage warehouse or transport vehicle downtime. [4]

Inaccurate Declaration and Non-Declaration of Goods

As noted above, the customs declaration of goods is performed by declaring to the customs authority information about the goods, their name, description, and other information necessary for customs purposes. However, during the verification of the declared information, customs authorities may identify the non-declaration of goods or inaccurate declaration.

Non-declaration of goods during movement across the border implies a factual absence of actions aimed at declaring the goods or a portion thereof. That is, the declarant took no action to declare the item. Inaccurate declaration assumes that the declarant took steps to declare the goods but submitted incorrect information to the customs authority that does not correspond to reality.

Information that, if declared inaccurately, may be used for exemption from customs duties and taxes or to reduce their amount includes:

• The name of the goods;
• The description of the goods;
• The classification code of the goods under the TN VED;
• The name of the country of origin;
• The name of the country of departure (destination);
• The quantity of goods in kilograms (gross and net weight) and other units of measurement;
• The customs value.

One of the most frequent cases of inaccurate declaration is the inaccurate determination of the classification code of the goods for customs purposes under the TN VED, linked to the complexity of preliminary identification of the goods. To exclude cases of substitution or to identify "cover" goods, which may be intentional or unintentional, it is vital to identify the goods for customs purposes with subsequent classification according to the TN VED, and to establish the correspondence of information submitted and declared in the declaration and supporting documents to the text of the TN VED commodity heading and subheading.

The declarant determines the classification code of the goods under the TN VED as an obligation. This involves declaring information in the form of a set of digits, usually at least 10 digits. However, the customs authorities verify the correctness of the classification and, based on verification results both before and after the release of goods, may disagree with the TN VED code, [5] resulting in the classification code declared in the declaration for goods being recognized as inaccurate.

To minimize the risks of declaring an inaccurate TN VED code, we draw attention to the mechanism for adopting a preliminary classification decision. [6] In other words, a foreign trade participant planning to move goods across the customs border applies to the customs authority before filing a declaration so that the customs authority classifies such goods and adopts a corresponding decision.

The indication of a certain customs value by the declarant does not guarantee its recognition as inaccurate. Customs legislation is based on the presumption of the accuracy of the information declared by the declarant. Hence, there is the possibility of releasing disputed goods under security and a simultaneous requirement for the declarant to provide accurate, quantitatively determinable, and documented information on the customs value. The burden of refuting information on the customs value and the correctness of the chosen valuation method is placed on the customs authority due to the public-law nature of the relationship. [7]

Signs of inaccuracy in the declared customs value that may attract the attention of customs, both during and after release, include:

• Inconsistency between information contained in the same document or reflected in other attached documents, as well as information, documents, and data available to the customs authorities (e.g., in the information system);
• Specifying a lower price for the goods (options here vary from comparisons with the price of identical and similar goods to comparing the cost of finished products with the price of components);
• The existence of a relationship between the parties to the transaction, if this circumstance influenced the reduction in value;
• Failure to comply with the customs value structure (e.g., failure to add transportation costs, license payments, and other additional charges to the contract price). [8]

If inaccurate data on the customs value is discovered, the inspector will request additional documents to verify the accuracy and completeness of the information provided in the DT. These may include, for example, manufacturer price lists for the imported goods, sender export declarations, or accounting documents on the acceptance of identical goods. [9]

Customs authorities also strictly control declared information on the quantity and weight of goods. Incorrectly specifying the quantity and weight of goods may be caused by contradictory information in supporting documents — for example, when different data is reflected in the packing list and the transport waybill. The latter may be caused by weighing errors or the effects of humidity or temperature during transport.

Non-declaration or inaccurate declaration entails administrative liability, which we will consider next.

What Are the Consequences and Liability for Inaccurate Customs Declaration?

An analysis of the law enforcement practice of the Federal Customs Service shows that 114,547 cases were initiated in 2020, 138,818 cases in 2021, and 146,936 cases in 2022. Penalties were imposed in 113,200 cases in 2020, 123,655 in 2021, and 147,886 in 2022.[10] One of the most common offenses is the inaccurate declaration of transported goods, for which administrative liability is provided under Parts 1–3 of Article 16.2 of the Code of Administrative Offenses of the Russian Federation (the "CAO RF"). In 2023, customs authorities initiated 28,500 cases under Article 16.2 of the CAO RF, of which 10,534 cases were initiated against legal entities and individual entrepreneurs under Parts 1 and 2 of Article 16.2 of the CAO RF. [11]

The subjective side of the offense is characterized by intentional or negligent guilt. Intent may be direct or indirect. Similarly, negligence, carelessness, or recklessness are provided for. The statute of limitations for administrative liability is two years.

Meanwhile, the distinction between Parts 1 and 2 of Article 16.2 of the CAO RF serves as a major stumbling block during the declaration of goods. Often, neither the customs authority nor the court can make this distinction. [12]

Part 1 of Article 16.2 of the CAO RF provides for liability for the non-declaration of goods in the prescribed form and carries a penalty of an administrative fine on citizens and legal entities in the amount of one-half to twice the value of the goods that were the subject of the administrative violation, with or without confiscation. Accordingly, Part 2 of Article 16.2 of the CAO RF provides for liability for the statement by the declarant or customs representative during declaration of inaccurate information on the TN VED classification code, coupled with the statement during the description of goods of incomplete and inaccurate information on quantity, properties, qualitative characteristics, name, etc. This part provides for an administrative fine on citizens and legal entities of one-half to twice the amount of customs duties and taxes payable, with confiscation of goods, provided that the duties and taxes were not paid upon import.

When distinguishing between administrative offenses provided for by Parts 1 and 2 of Article 16.2 of the CAO RF, the following should be considered:

Part 1 of Article 16.2 of the CAO RF establishes liability for the non-declaration of goods and/or transport vehicles when the person fails to perform the requirements of customs legislation for declaration and customs clearance — that is, the entire item or a portion thereof is not declared (e.g., a portion of a homogeneous item is not declared, or when declaring a batch consisting of several items, information on only one item is reported, or an item different from the one declared is presented for customs clearance).

If an item is fully declared by its quantitative characteristics, but the declarant or customs representative provides inaccurate information in the customs declaration regarding the qualitative characteristics of the item necessary for customs purposes, these actions constitute an administrative offense under Part 2 of Article 16.2 of the CAO RF, provided that such information served as a basis for exemption from customs duties and taxes or for reducing their amount. [13]

This explanation indicates that quantitative characteristics of the item serve as the most important qualifying feature for Part 1 of Article 16.2 of the CAO RF and distinguish it from Part 2. However, in practice, this seemingly clear interpretation generates many questions and disputes. In many cases, the opinions of the customs authority and the court differ regarding the correctness of the declarant's reflection of the quantitative characteristics of the goods and the influence of declaration errors on the qualification of the act. [14]

For example, in Case No. A56-95567/2018, a company imported fresh cherry tomatoes for food consumption, Class A, 2018 harvest, packed in plastic trays, placed in 5,304 cardboard boxes on 21 pallets, with a gross weight of 14,176.000 kg and a net weight of 12,888.720/11,934.000 kg. During a customs inspection, the authorities found that the actual net weight exceeded the declared weight by 153.5 kg, which served as the basis for an administrative penalty under Part 1 of Article 16.2 of the CAO RF.

However, the courts established that the quantitative characteristics of the imported goods were determined precisely by the number of boxes. The case materials confirmed that the goods were declared as 5,304 boxes, which fully corresponded to the shipping documents. Given the above, the appellate court recognized the lower court's conclusion that the disputed goods were fully declared, which did not result in an exemption from customs duties or taxes or a reduction in their amount. [15] The courts considered the circumstances confirming the event of an administrative offense under Part 1 of Article 16.2 of the CAO RF as unproven. At the same time, they noted that the incorrect specification of quantitative characteristics, including weight, indicates that the customs representative stated inaccurate information about the item during declaration, which constitutes an administrative offense under Part 2 of Article 16.2 of the CAO RF. [16]

The courts reached a similar conclusion in another case where the customs authority qualified the company's act of specifying the wrong weight of goods under Part 1 of Article 16.2 of the CAO RF. The courts found no grounds for the offense since the company reflected the total quantity (1,450 boxes of fresh oranges on 20 pallets) correctly. As stated in the judicial acts, customs determined the gross/net weight via a calculation method without evidence of the exact weight of the pallets. The customs authority provided no evidence that the company independently and inaccurately calculated the net weight of the goods in the cardboard boxes in a way that contradicted the shipping documents. [17]

On the other hand, if a declarant incorrectly declares several quantitative parameters at once, the courts take a different position. Thus, in violation of the established procedure, a company incorrectly specified the gross weight and quantity in the DT. Given that the calculation and payment of customs payments is a primary goal of declaration, and in this case, the amount of customs duty depended on the net weight, a portion of the goods was effectively not declared. In these circumstances, the company's actions constitute the non-declaration of a portion of the goods (understating weight) rather than the statement of inaccurate information. The customs authority incorrectly qualified the identified offense under Part 2 of Article 16.2 of the CAO RF. [18] In other words, the act should have been qualified under Part 1 of Article 16.2 of the CAO RF.

We draw attention to Constitutional Court of the Russian Federation Decision No. 9-P dated March 5, 2024, In the Case of Reviewing the Constitutionality of Part 2 of Article 16.2 of the Code of Administrative Offenses of the Russian Federation in Connection with Complaints by Gazpromneft-Lubricants LLC and VIREM RUS LLC. Both companies were fined for inaccurate information about goods: in both cases, the gross weight of one item in the batch was higher than declared. The total customs value of the goods did not increase, and no underpayment occurred. According to the applicants, Part 2 of Article 16.2 of the CAO RF does not comply with the Constitution of the Russian Federation because it allows for administrative liability even when such information did not and could not serve as a basis for exemption from customs duties or for reducing their amount, and moreover, led to an overpayment of customs payments. The Constitutional Court clarified that the offense provided for by the contested norm is a material one, as it assumes the non-payment or underpayment of customs payments for liability to apply. Under Russian customs regulation, such consequences are determined for the batch of goods as a whole. Imposing liability for the inaccurate weight of one item when it did not affect the customs value of the entire batch with the same calculation base and rate would turn the offense into a formal one, contradicting the legislator's intent. The Constitutional Court also noted conflicting court decisions in similar cases, which creates a threat to the principle of legal equality. This is not consistent with provisions on equality before the law and the court, requirements for fairness and proportionality, or the principle of legal certainty. After reviewing the complaints, the Constitutional Court held that Part 2 of Article 16.2 of the CAO RF does not contradict the Constitution as long as it does not imply administrative liability for the declarant for specifying the inaccurate gross weight of one item, provided this does not lead to an increase in customs payments for the batch as a whole.

In accordance with the note to Article 16.2 of the CAO RF, the declarant or customs representative may be exempt from administrative liability if, after the release of goods, they voluntarily apply to the customs authority to amend the customs declaration and attach the necessary documents.

Simultaneously, the following conditions must be met on the date preceding the registration of the application:

• The customs authority has not identified an administrative offense involving the goods specified in the application;
• The customs authority has not notified the declarant (customs representative) of customs control after the release of goods and has not started it without notification (if such notification is not required);
• The declarant (customs representative) has no outstanding customs duties, taxes, or penalties.

Part 3 of Article 16.2 of the CAO RF provides for liability for the submission of invalid documents, resulting in a violation of prohibitions and restrictions established by law. This implies that, in addition to stating inaccurate information, the declarant or representative submitted invalid documents for the goods. Unlike fines for non-declaration or inaccurate declaration, which are tied to the value of the goods, fines for submitting invalid documents are fixed. For legal entities, the penalty is a fine of 50,000 to 300,000 rubles, with or without confiscation.

When reviewing an appeal against a penalty under Part 3 of Article 16.2 of the CAO RF, the courts established that when importing a "Quadcopter", no permit from the Federal Service for Supervision of Communications, Information Technology, and Mass Media was submitted, as the imported item falls under the Regulation on the Import of Civil-Use Radio-Electronic Facilities and High-Frequency Devices into the Customs Territory of the Eurasian Economic Union, approved by Eurasian Economic Commission Decision No. 30 dated April 21, 2015. [19]

In certain cases, inaccurate declaration may also entail criminal liability. If the amount of unpaid customs payments, special, antidumping, and/or countervailing duties for goods moved across the EAEU border exceeds 2 million rubles (large scale), or 6 million rubles (extra-large scale), criminal liability applies under Article 194 of the Criminal Code of the Russian Federation. For example, Part 1 of this article provides for a fine of 100,000 to 500,000 rubles, or the amount of the convicted person's wages or other income for a period of one to three years, or mandatory labor for up to 480 hours, or forced labor for up to 2 years, or imprisonment for the same term.

In this article, we have considered the main issues related to inaccurate customs declaration. When a declarant or representative fills out declarations for goods, errors—both unintentional and intentional — may occur, aiming to mislead customs authorities and reduce payments. This can lead to administrative liability with serious fines. Meanwhile, judicial practice shows varying approaches by customs authorities and courts to qualifying offenses. Therefore, we recommend careful completion of customs declarations with the assistance of specialists.

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References

[1] Eurasian Economic Commission Board Decision No. 254 dated November 12, 2013, On the Structures and Formats of Electronic Copies of Customs Documents.

[2] FCS of Russia Order No. 1003 dated August 21, 2007, On Classifiers and Lists of Reference Information Used for Customs Purposes.

[3] Commission of the Customs Union Decision No. 378 dated September 20, 2010, On Classifiers Used for Filling Out Customs Documents.

[4] Arbitration Court of the North-Western District Decree dated April 22, 2021, in Case No. A21-4320/2020; Arbitration Court of the Far Eastern District Decree dated April 19, 2022, in Case No. A51-8234/2021.

[5] Rudneva Z.S., Mulyarchuk E.E. Economic Consequences of Stating Inaccurate Information During Customs Control of the Classification Code of Goods. Journal of Applied Research, 2021.

[6] Federal Law No. 289-FZ dated August 3, 2018, On Customs Regulation in the Russian Federation and on Amending Certain Legislative Acts of the Russian Federation; FCS of Russia Order No. 205 dated February 7, 2019.

[7] Plenum of the Supreme Court of the Russian Federation Decree No. 49 dated November 26, 2019, On Certain Issues Arising in Judicial Practice in Connection with the Entry into Force of the Customs Code of the Eurasian Economic Union.

[8] Matvienko G.V. Implementation of the Legal Status of the Declarant - Payer of Customs Payments in Light of Court Decisions. Journal "Issues of Economics and Law", 2020, No. 5.

[9] Eurasian Economic Commission Decision No. 42 dated March 27, 2018, On the Specifics of Conducting Customs Control of the Customs Value of Goods Imported into the Customs Territory of the Eurasian Economic Union.

[10] Brazhnikov D.A. Certain Aspects of the Application of Punishments for Administrative Offenses Assigned to the Competence of the Customs Authorities of the Russian Federation. Journal Society and State, 2023 No. 3 (43).

[11] Virtual Customs Website, article Analysis of the Practice of Exempting Foreign Trade Participants from Liability for Non-declaration of Goods in 2023, March 6, 2024.

[12] Polushin I.S. Non-declaration or Inaccurate Declaration: Distinguishing between Administrative Offense Compositions under Part 1 and Part 2 of Article 16.2 of the CAO RF. Alta-Soft Website for Declarants and Foreign Trade Participants, May 22, 2019.

[13] Plenum of the Supreme Court of the Russian Federation Decree No. 18 dated October 24, 2006, On Certain Issues Arising for Courts When Applying the Special Part of the Code of Administrative Offenses of the Russian Federation.

[14] Ermolaeva E.V. Quantitative Characteristics of the Item as a Qualifying Feature of Non-declaration of Goods. Journal Bulletin of the Russian Customs Academy, 2021, No. 4.

[15] Thirteenth Arbitration Appeals Court Decree dated February 8, 2019, in Case No. A56-95567/2018.

[16] Ibid.

[17] Arbitration Court of the North-Western District Decree dated March 25, 2021, in Case No. A56-65029/2020.

[18] Tenth Arbitration Appeals Court Decree dated December 21, 2018, in Case No. A41-52760/18.

[19] Arbitration Court of the Moscow District Decree dated June 6, 2022, in Case No. A41-57625/2021.