Conducting a customs audit of foreign trade transactions

What is customs audit

The purpose of such an inspection is to carry out an analysis of the activities of an individual or legal entity from the point of view of risks and possible violations of customs legislation before the appointment of an inspection by government agencies.

Conducting such an audit allows the entrepreneur to independently eliminate possible violations of the established rules and norms for declaring the import and export of products and, thereby, avoid administrative and criminal liability.

It is worth noting that even the very concept of the word “audit” means not only control and verification of work results, but also observation directly in the process of completing a transaction, preparing the necessary documents, etc.

INSTITUTE OF CUSTOMS AUDIT. MYTHS AND REALITY.

Recently, the issue of the possibility and feasibility of using customs audit in customs legal relations in the EAEU member states has been discussed on numerous platforms. At the same time, in narrow circles of professionals there is no consensus on this issue, and most participants in foreign trade activities form their opinion about customs audit on the basis of a small number of publications in the media, including Internet resources, as an unnecessary and financially burdensome procedure for business.

What is a customs audit, and why is it needed?

We will try to clarify these issues, primarily on the basis of foreign experience.

“Audit” is a borrowed word in Russian. And among representatives of the business community, it is usually associated with an independent examination of an organization’s financial statements, based on checking the correctness of accounting, compliance of operations (economic and financial) with current legislation, as well as the completeness and accuracy of their reflection in the statements in order to express an opinion on its reliability .

The reason for this is the norms of national legislation (acts of Russia and Belarus are considered), which consider the term “audit” only in the specified meaning. And in accordance with existing legal norms, “audit” is one of the types of entrepreneurial activity, i.e. a service provided to the audited entity by certified auditors.

Taking into account this perception of the audit, foreign trade participants are wary of the introduction of a customs audit, considering it precisely in the context of an independent examination of financial information in the customs sector.

One of the prerequisites for the emergence of the term “customs audit” among foreign trade participants of the EAEU member states is standard 6.6 of Chapter 6 of the General Annex to the Kyoto Convention of 1973, which prescribes that “customs control systems include control based on audit methods .”

But this standard relates exclusively to the control function of the state carried out by customs authorities, and has nothing to do with business activities.

The World Customs Organization (hereinafter referred to as the WCO) provides more detail than paragraphs E3./F4. Chapter 2 of the General Annex to the Kyoto Convention clarified the concept of customs control after the release of goods using the audit method in its recommendations on post-clearance audit.

These guidelines define the post-clearance audit process as a structured examination of relevant commercial business systems, sales contracts, financial and non-financial statements, physical inventory of goods and other assets, as a means of measuring and improving compliance with technical standards.

In addition, WCO experts at a seminar on risk management and customs audit, held June 7-10, 2005 in the People's Republic of China, explained the concept of post-clearance audit as a process that allows customs officials to verify the accuracy of declarations by examining the books, records, business systems and all relevant customs business data of individuals and entities directly or indirectly involved in international trade.

It is necessary to understand that the provisions of the Kyoto Convention reflect the progressive approaches of the states that initiated the introduction of this Convention. And the need for customs control based on audit methods in these states is caused by a number of reasons.

The main one is the declaration of the principle that in order to speed up international trade and minimize costs in the supply chain, it is necessary to avoid unnecessary customs formalities when crossing the border and during customs clearance at internal customs points.

For this purpose, the customs authorities are faced with the task of releasing goods in accordance with customs procedures at the border, while avoiding the risks of violating customs rules regarding the completeness of payment of customs duties. Under these conditions, it becomes impossible for customs to make informed decisions regarding the payment of customs duties within a limited time frame.

And in this situation, the right of the customs authority, regulated by national legislation, to carry out customs control after the release of goods on the importer’s territory by comparing the information in the customs declaration with information in commercial documents makes it possible to reach a compromise between the interests of the state represented by customs and business represented by the importer.

For example, in foreign countries (using the example of the EU), control after the release of goods is based on cooperation between customs authorities and participants in foreign trade activities and is aimed not only at identifying violations of customs legislation, but also preventing them, as well as simplifying customs procedures in relation to the inspected participant in foreign trade activities. Sufficient confirmation of this is the fact that customs authorities notify the foreign trade participant in advance about the planned inspection, providing the opportunity to carry out internal control within 15 days. And if a participant in foreign economic activity independently identifies violations in his customs operations, then he is given the right to independently make changes to the information by paying additional customs duties without penalties.

Also, customs control based on audit methods is carried out by customs authorities of foreign countries in order to categorize participants in foreign trade activities within the framework of the risk management system. And it is mandatory for foreign trade participants who apply simplified customs clearance procedures (authorized customs operators). In the process of such control, not only the compliance of the information declared during the release with the company’s internal accounting data is checked, but also issues of its financial stability, the legality of foreign economic transactions, and an economic analysis of activities are reflected in order to identify risks in the implementation of foreign economic activity.

Customs control based on audit methods in the EAEU

Let's consider how the provisions of the Kyoto Convention regarding the use of audit methods during customs control are implemented into the norms of customs law of the EAEU?

It can be argued that in the realities of the EAEU there is a substitution of the concepts and principles laid down in the Kyoto Convention. This is confirmed by the description of the existing practice of customs clearance of goods imported into the EAEU:

• at the points of arrival in the customs territory of the EAEU, goods are not released into circulation, but are placed under the customs transit procedure;
• the transit procedure ends with the placement of the cargo in temporary storage warehouses with its subsequent placement under the customs procedure chosen by the recipient;
• when releasing goods in the selected customs procedure, customs control is carried out, which consists of checking documents and information confirming the information declared in the declaration for goods and, often, customs inspection of the cargo;
• when the risk indicator is triggered, cargo is released against the security of payment of customs duties, followed by the submission of additional documents and information to the customs authority;
• customs control after the release of goods is carried out only for the purpose of identifying and documenting the fact of violation.

Thus, the domestic practice of conducting customs control after the release of goods is fundamentally different from the post-customs audit used by customs administrations of foreign countries.

In order to eliminate any risks of non-payment of customs duties, the customs authorities of the EAEU apply control before the release of goods, and not control based on audit methods. And the established customs inspection units apply their right to customs control after the release of goods only for the purpose of identifying offenses in relation to goods for which, due to the imperfections of the existing risk management system, customs control operations were not properly carried out upon release of the goods. And this state of affairs is quite satisfactory for the administration of the EAEU customs authorities.

In addition, there are a number of objective reasons why the application of foreign customs control practices in the EAEU based on audit methods is premature. The main ones can be identified:

1) The release of goods at the place of arrival (at the border) in procedures other than the customs procedure of customs transit is not applicable due to the principle of residence of the declarant during customs declaration;

2) Less law-abiding environment for importers than in industrialized countries. In this connection, the customs authorities may be faced with the problem of the importer not being at the declared address, or of the lack of a properly organized accounting system;

3) The existing risk management system assumes the immediate implementation of recommended actions if information about the product does not meet the established risk criteria. For example, the release of goods against the security of payment of customs duties; direction of cargo placed under the customs transit procedure from the place of arrival to the nearest temporary storage warehouse for inspection, etc.;

4) The elements of some administrative offenses provide for the responsibility of the declarant for submitting documents containing false information . At the same time, the elements of this offense are also charged to the carrier acting as the declarant when placing the goods under the customs transit procedure. The existing reporting by the customs authorities on identified offenses, together with the amounts of fines received by the state budget as a result of the detection of such offenses, is also a deterrent to the initiative to postpone the release of goods at the border;

5) The imperfection of the existing risk management system due to the lack of technical and methodological base , as well as the existing level of bureaucracy in customs authorities;

6) The need for qualified personnel , which requires customs officers to know not only customs legislation, but also accounting rules, knowledge of specialized software products, the functioning of business processes, etc.

Taking into account all of the above, it can be stated that it is necessary to distinguish between the concepts of “customs audit” and “customs control based on audit methods”. Customs audit cannot replace customs control, the implementation of which is the exclusive right of the state represented by customs authorities.

Is it advisable to introduce “customs audit” at the legislative level as a type of business activity?

This primarily depends on what benefits customs authorities and participants in foreign economic activity will receive from it.

If the results of such an audit are used by customs authorities to simplify customs procedures in relation to audited entities, then foreign trade participants will be interested in the feasibility of conducting it. Such simplifications may include:

• automatic release of goods;
• no requirement to provide security for payment of customs duties upon release, etc.

In this case, in order to promote the development of foreign trade, customs authorities will be able to:

• distribute your limited resources more efficiently,
• prevent possible violations of customs rules,
• increase the level of trust in them from the business community.

At the initial stage of interaction, it will be sufficient to introduce mandatory requirements for the presence of an internal control system in companies that have the status of authorized customs operators, customs representatives, customs carriers. This will allow customs authorities to increase the level of trust in these participants in foreign economic activity, who receive a number of preferences when conducting customs operations. This would be quite logical - customs provides these persons with a number of advantages compared to other participants in foreign economic activity and has the right to be sure that the company carries out ongoing control to prevent violations of legal requirements for this category of participants in customs relations.

As a conclusion, the following should be noted.

Firstly , at present the concept of “audit” is not considered widespread in the customs field. At the same time, no one has any misunderstanding about conducting an audit in such areas as construction, IT security, etc. And if we consider its classification depending on the areas of conduct, that is, by object, as a type of audit, then today such a concept has the right to exist in the field of foreign economic activity.

Secondly , the implementation of internal control of their customs operations by participants in foreign economic activity has already found support from the state.

For example, the Code of Administrative Offenses of the Republic of Belarus provides for the release of the declarant from administrative liability in the event of a voluntary notification of self-identified violations committed during the release of goods (note 2 to Article 14.5 of the Code of Administrative Offenses of the Republic of Belarus). A similar rule exists in the Code of Administrative Offenses of the Russian Federation (notes 2, 4 to Article 16.2 of the Code of Administrative Offenses of the Russian Federation).

The Code of Administrative Offenses of the Republic of Belarus also provides for the possibility of issuing an administrative penalty in the form of a warning for late or incomplete payment of customs duties (Part 9 of Article 13.6 of the Code of Administrative Offenses of the Republic of Belarus). Accordingly, if a company independently identifies violations committed by it, it has the opportunity to avoid liability established by law for non-payment or incomplete payment of customs duties on time.

Thus, already now companies have the opportunity, defined by law, to avoid being held administratively liable for unintentional violations of customs legislation. The only question is the timely identification of these facts.

Our team’s independent specialists, who have expert knowledge in the customs field, can help identify existing problems in a timely manner to ensure that the company’s activities comply with the requirements of customs legislation.

The concept of a foreign trade transaction

The immediate main subject of such an audit is the relationship between persons that begins during a foreign trade transaction.

The concept of a foreign trade transaction is defined as an agreement (contract) between two or more parties that are registered in different countries. The subject of such an agreement can be both the supply of goods of a certain quality and quantity, and the provision of services in accordance with the conditions specified in the agreement.

A foreign trade transaction in the general understanding is represented as a complex of main types of commercial activities, as well as auxiliary ones, which, through their use, ensure the implementation (sale) of a product or service.

When carrying out such foreign trade transactions, the relations of the parties are necessarily formalized by a trade agreement. In world practice, the concept of agreement is often replaced by the more accepted term “contract”.

The contract serves to legally formalize the conditions for the supply of goods (provision of services), which stipulates the rights and obligations of the parties, the basic conditions of commercial relations, as well as actions and responsibilities in the event of emergency situations.

Depending on what object is the subject of the transaction, the following types of foreign trade transactions are distinguished:

• service transactions;
• work execution transactions;
• transactions of purchase and sale of goods;
• transactions of trade in intellectual property results;
• purchase and sale transactions information.

Why is a customs audit necessary?

The main task of customs control (audit) is to identify risks and prevent violations that may arise as a result of foreign trade relations and it consists of the following:

• analysis of documents that are presented to the relevant authority for customs clearance;
• analysis of compliance of a foreign trade transaction contract with the requirements and standards of regulatory authorities;
• analysis of the terms of a separate contract (agreement) to determine the cost of the goods (of particular importance when supplying products with the so-called “high degree of risk”);
• analysis of both internal and related documents to the banking system to identify the likelihood of risks associated with deviations from legislation and currency control regulations. If these are barter transactions, then determining the possibility of their implementation under specific conditions;
• analysis of documentation that is subject to storage and accounting by participants in foreign economic activity after completion of all procedures related to documentation;
• analysis of documents that must be kept by persons purchasing or selling goods imported into the country.

After analyzing all possible risks that may accompany participants in foreign trade transactions, recommendations (conclusions) are made, either orally or in writing. These recommendations describe the nature of actions aimed at eliminating or minimizing the risks identified during the audit.

Trust, but verify: principles of customs post-audit

22.02.2020

Trust, but verify: principles of customs post-audit

The principle of customs post-clearance audit can be described by the well-known phrase: “Trust, but verify.” That is, the main customs procedures, which, according to the legislation of the relevant country, must be carried out for goods moved across the border (import, export), are subject to application not at the checkpoint during the direct movement of goods or at the customs office of destination/departure, but after completion of their customs clearance and release into free circulation. In this publication, specialists from the company Cargo.kiev.ua
, specializing in the provision of customs brokerage services, customs clearance in Poland, etc., will answer questions related to the principles of customs post-audit.

Customs post-audit can be defined as a set of measures carried out by customs administrations and their officials after the release of goods into free circulation in order to establish the accuracy and reliability of the information specified in customs declarations, the timeliness and completeness of payment of customs duties and compliance with established non-tariff regulation measures by studying relevant documents of the subject of foreign economic activity (accounting and accounting books and records, business systems and commercial data), which are maintained and stored by the subjects in accordance with national legislation.

The World Customs Organization proposes a definition of the post-clearance audit process as a structured examination of relevant commercial business systems, contracts, financial and non-financial records, physical inventories and other assets, as a means of measuring and improving compliance with technical standards.

Customs post-audit in international legislation

Customs post-audit as a form of customs control is based on the Convention on the Harmonization and Simplification of Customs Procedures of 1973 (Kyoto Convention), which was developed by the Customs Cooperation Council (since 1994 - the World Customs Organization). The Kyoto Convention, to which our country joined in accordance with the Law of Ukraine dated October 5, 2006 No. 227-V (as amended by the Law of Ukraine dated February 15, 2011 No. 3018-VI) came into force for Ukraine on September 15, 2011.

The World Customs Organization, insisting on the need to use post-audit as a form of customs control to reduce the time of customs clearance, as well as reduce bureaucratic and corruption manifestations when performing customs formalities, has developed Guidelines for Customs Post-Clearance Audit (WCO – Guidelines for Post-clearance audit , 2012), containing actually step-by-step instructions on the implementation and use of this form of customs control by WMO member countries (today – 182 countries). The methodological recommendations contain advice for determining risk criteria and potential objects for inspections, offer methods and tools for their implementation and analysis of the results, define qualification requirements, primary rights and responsibilities of auditors, and highlight limitations for the use of post-audit.

In European legislation, customs post-audit is regulated by the EU Customs Code (Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 09.10.2013), which provides that for customs control, customs authorities can check the accuracy and completeness of the information provided in customs declaration, declaration of temporary storage, general declaration of import, the accuracy and validity of any accompanying document, and may also inspect the declarant's accounts and other records relating to transactions in the goods concerned, previous or subsequent commercial transactions relating to those goods after their release. Moreover, such control can be carried out on the premises of the owner of the goods or his authorized person, or any other person directly or indirectly involved in such operations, or other persons who have the necessary documents and data on the relevant foreign economic transaction.

Post-audit in national legislation

Accession to international conventions (in particular, the Kyoto Convention), as well as the desire for membership in the European Union, resulted in the need to move closer to European legislation and implement international norms into the national legislation of Ukraine.

Although the 2012 Customs Code of Ukraine (hereinafter referred to as the Customs Code of Ukraine) did not define such a concept as “post-audit”, it provided for the right of customs authorities to conduct documentary checks of compliance with the requirements of the legislation of Ukraine on issues of state customs affairs, including timeliness, reliability , the completeness of the accrual and payment of customs duties in relation to subjects of foreign economic activity after the completion of customs clearance of goods, which in its essence corresponds to the generally accepted definition of the term “customs post-audit”.

Documentary checks, in accordance with Art. 336 of the Labor Code of Ukraine are one of the forms of customs control. Consequently, it was quite logical for them to be implemented by customs officials, taking into account the availability of professional knowledge and the efficiency of obtaining and exchanging information within one department.

However, in connection with the administrative reform in 2012 and the formation of the Ministry of Revenue and Duties of Ukraine through the merger of the State Customs and Tax Services of Ukraine, changes were made to national legislation (primarily the Labor Code of Ukraine), and the powers to conduct inspections of compliance with legislation on issues of state customs affairs were transferred to the relevant Main Directorate of the Ministry of Revenue and Duties in the regions, the cities of Kyiv and Sevastopol. After the next reformation and formation of the State Fiscal Service of Ukraine against the backdrop of the Ministry of Revenue, these powers remained in the relevant State Administration.

As part of the coverage of the issues of customs control of goods after their release, I should note that the unification of tax and customs services could have an effective result. For example, in the process of importing a product, its route could be tracked from the border (and, given the possibility of international exchange of information, even from the manufacturer) to the final consumer, while ensuring the fulfillment of the protective function of the state - the main one in the activities of customs authorities (by checking the presence of all permitting documents of authorized state bodies for the import and sale of goods, identification of illegally imported or prohibited goods, compliance with measures of non-tariff regulation of foreign economic activity), and the fiscal function - the main one for tax authorities (by checking the correctness of determining the customs value of goods and paying customs duties, and also control over the accrual base and payment of VAT and income tax by subsequent consumers of imported goods).

However, control over the tax base along the entire supply chain from importer to final consumer was not organized, nor was proper exchange of information organized either at the international or national level. In addition, the effectiveness of this form of customs control was negatively affected by the lack in the Main Directorates of the Ministry of Revenue/DFS of a sufficient number of specialists with appropriate qualifications and experience in the field of state customs affairs, which can probably be considered the most important guarantee of the successful use of post-audit.

Now customs post-audit, as one of the most effective forms of customs control, has actually been leveled out and dissolved among the control and verification work of tax officials, which negates its effectiveness due to a misunderstanding of the essence and implementation process.

Consequently, continuous access to the automated system for customs clearance of goods and vehicles is provided to customs officials and their structural divisions (employees of individual structural divisions of the State Administration can gain access in agreement with the head of the relevant customs). In addition, regional risk profiles are filled in by customs taking into account the specifics of the region (area of ​​activity), goods being moved, and the reputation of the subject of foreign economic activity.

Profit from post-audit

I would like to conclude the review of the issue with something positive. For example, the positive consequences that a properly organized customs post-audit can have. It is worth noting that its results are beneficial for all parties involved in its implementation: regulatory authorities - for the lack of too limited time standards for checking many documents during customs clearance (now it is 4 hours, according to Article 255 of the Labor Code of Ukraine); to the state - through proper filling of the state budget and protection of the population from poor-quality products; law-abiding subjects of foreign economic activity - for the absence of queues at the border (after all, inspection of goods will be minimized), reduction of customs clearance time (accordingly, savings on the services of cargo customs complexes, customs warehouses/temporary storage warehouses, forwarders/carriers, etc.), reduction of bureaucratic interference, as well as corruption factors at each stage of customs clearance.

Modern international trade operates under tight deadlines, so national economic benefits can only be achieved through the smooth and timely clearance of goods. In addition, this area includes large corporations with global networks, complex business systems and supply chains. The limited number of documents provided at the time of import does not provide a complete picture of the terms of the commercial transaction necessary to correctly establish the customs value, classify the goods, and determine the preferential/non-preferential origin of the goods. Consequently, customs finds itself in a situation where it is necessary to make informed decisions, including on the obligation to pay customs duties, within extremely limited time limits and on the basis of a minimum of documents for a foreign economic transaction.

By applying risk analysis and post-clearance controls, Customs can more effectively focus its resources and work in partnership with the business community to improve levels of international compliance and trade facilitation. Therefore, most customs administrations now focus their control on the area after the entry of goods, maintaining only random checks at the border using risk analysis. For example, in France, only 5% of imported and 1% of exported cargo are subject to fundamental control, that is, a complete check of the correctness of registration and the presence of all necessary documents; the remaining 95% are subject to control within 1-3 years after registration of customs documents.

Thus, the use of customs post-audit ensures:

• reduction of customs clearance time, which results in savings of funds for subjects of foreign economic activity and the ability to accurately coordinate the timing of delivery of goods with counterparties, as well as not limiting the customs authorities for making relevant decisions either by a compressed time frame or by a lack of documents necessary for making such decisions;
• promoting increased self-organization of subjects of foreign economic activity, in particular due to the reluctance to fall into a risk group, which will result in the application of fundamental control during customs clearance, and, consequently, again an increase in time and costs;
• an increase in “white” imports, primarily through an increase in the likelihood of illegal transactions being exposed during a documentary check and, as a result, the application of administrative or criminal liability measures (by the way, today sanctions for violating customs rules are quite significant - 100% of the value of goods from their confiscation (Article 483 of the Labor Code of Ukraine), 300% of the unpaid amount of customs duties (Article 485 of the Labor Code of Ukraine));
• the ability to track goods throughout the supply chain from the importer to the final consumer, which allows for effective control over the tax base and compliance with non-tariff regulation measures, and also complicates the organization of illegal movement schemes;
• reducing corruption through reducing the influence of the human factor when moving goods, as well as the objective application of a risk management system;
• the ability to determine whether a subject of foreign economic activity meets the criteria for obtaining the status of an authorized economic operator.

It should be noted that the World Customs Organization, in its Guidelines on Customs Post-Audit, advises that the transition from border control to customs control after the release of goods usually takes several years.
At the same time, customs post-audit is not a separate process; it must be included in the broader context of trade facilitation and customs procedures. Number of impressions: 851 Rating: 3.3

Customs audit methods

There are many methods for conducting such verification, but in practice the following are most often used:

• a method of detailing that makes it possible to identify individual factors or erroneously drawn up documents that resulted in a violation of established customs norms;
• balance sheet method, based on the use of equality of funds and sources used and final profit;
• graphical method, which clearly displays the audit results;
• inventory of funds, which consists in bringing together accounting and actual balances;
• accounting methods for evaluating systems of accounts.

Cost of customs audit

The cost of services depends on many factors, the main of which are:

• specific verification task;
• scope and depth of the audit;
• on the time frame within which the client needs to receive the results of the audit;
• on the number of specialists who will be involved in the inspection;
• from the inspection stage (before cooperation during the period of concluding a contract, during production and after the release of goods, their import, after completion of customs operations);
• the number of persons being inspected (your company itself, or all parties involved in the operation, including small contractors);
• on what form of report the customer needs;
• reputation of the audit firm and how long it has been in existence.

In general, the price for this type of service can range from 20 thousand to two hundred thousand rubles. For each individual case, the cost of services may vary.

To clarify the cost of services and order them, call

Adjustment of customs value

Customs value adjustment (CVC) is a widely used method by customs to replenish the budget and fulfill the plan for collecting customs duties. The EAEU Customs Code, which entered into force on January 1, 2021, has not fundamentally changed the procedure for determining, declaring and controlling the customs value of goods.

CTS by decision of the customs authority

can be carried out before and after the release of goods during the entire period that the goods are under customs control, i.e.
within three years
from the date of issue of the declaration, and in some cases, established by the customs legislation of Russia -
five years
. According to the EAEU Customs Code, when adjusting the customs value, the following documents are drawn up to amend the declaration of goods (DT):

• before the release of goods - requirements for making changes (additions) to the declaration of goods (DT);
• after the release of goods - decisions to make changes (additions) to the DT.

Customs value control is carried out within the framework of the risk management system. If a risk is identified by customs

an analysis of documents is carried out, which must be gradually sent by the declarant upon request.
First, the customs clearance office requests a set of documents confirming the declared customs value from column 44 DT
.
If they are not provided
(the deadline is 4 hours before the expiration date for the release of goods) -
refusal to issue the DT
.
If documents are provided and customs has no doubts about the authenticity of the customs value, the goods are released. If the documents are provided, but there are signs of unreliability
of the customs value, or the submitted documents do not confirm the declared information or are insufficient, the customs office has the right to request an additional package of documents, i.e.
additional verification
is carried out .
In this case, the release of goods is carried out against the security of payment of customs duties and taxes on the basis of a calculation of the amount of security sent to the declarant. If additional documents are not submitted within the established release deadlines and security for payment of customs duties
and taxes is not provided, then
the release of goods is refused
.

Within 60 calendar days

from the date of registration of the goods, the declarant can send to the customs the requested documents that were not submitted within the time limit for the release of goods to complete the inspection.
This review must be completed within 30 calendar days
from the date of submission.
If the submitted documents are insufficient or do not contain the necessary information, customs has the right to once again request documents (3rd set), which must be provided within 10 calendar days
from the date of the request.
During the request for these documents, the verification period is suspended
and resumed from the day the additional documents are received.

The new Customs Code has made fundamental changes

regarding the grounds for CCC:
the main basis
for making a decision is not so much doubts about the reliability of documents and information, but rather
the willingness to provide other documents confirming the customs value of goods
.
According to the EAEU Customs Code, the grounds for making changes to the DT regarding information on customs value before release are: statement of undocumented information and failure by the documents provided to eliminate the basis for checking documents and information; after release - failure to submit any of the documents, information about which is indicated in the customs declaration, or the submitted documents do not confirm the information being verified. Thus, the fact of the absence of document
(s), the presence of which was often not expected at the conclusion of the transaction (price lists, etc.), or
the inability to provide them
within a short time period prior to release upon an official request, serves as
a sufficient basis for the release with CTS
or making adjustment decisions after graduation.
Those. the declarant is subject to a “presumption of guilt”
, which implies the obligation to eliminate the slightest doubt about the purity of the transaction and payments for it, and these doubts often arise
not on the basis of direct facts
, for which there is enough time to establish during a customs check, but
indirect signs
.

When declaring, the CTS can be conditional or final. On final adjustment

, which presupposes the declarant’s consent to the customs calculation, which is often required in the form of a letter,
the money is immediately written off
to budget revenue.
But in this case, the foreign trade participant is actually deprived of the opportunity
to subsequently challenge the CCC.

Conditional CTS

provides for the issuance of a declaration
with reservation of payments
in the customs account until the final decision, or, in some cases, the use of security in the form of a customs receipt, bank guarantee or other forms.
With a conditional CCC, in the event of customs disagreement with the foreign trade participant after providing the requested documents, a decision is made on the final CCC
, and
penalties are calculated
for deferring customs payments.

However, the issuance of a declaration with a conditional CTS allows the declarant to reasonably challenge

decision of customs both by higher authorities and in court.
Established arbitration practice shows the effectiveness of using judicial protection
to cancel unlawful customs decisions on customs value and return overpaid payments under the CCC.

To assess possible losses when controlling customs value as part of customs control after release (customs inspection), one should take into account the fact that it is currently practiced to make decisions for the entire period that goods are under customs control

for the entire volume of supplies under the contract or contracts for similar goods under similar transaction conditions.

With CTS, after release as a result of the inspection, you should wait for the report of the desk customs inspection. Based on the results of the inspection, the customs authorities make decisions to make changes to the DT and offer to voluntarily pay additional accrued payments and penalties. The decision on voluntary compliance with requirements or forced collection should be made individually, based on the specifics of the enterprise’s activities. But if the organization has no doubts that it is right

and readiness to defend your claims, then
you should not delay in preparing a statement of claim
, since with significant amounts of additional duties and VAT charged,
higher customs authorities are reluctant to accept the objections of declarants
.

Our qualified specialists are ready to provide comprehensive assistance in defending the interests of declarants under CCC

. Our services include:

• consultation
  with the client on the issue of returning the vehicle (analysis of the package of documents, decisions of the customs authority, determining the grounds for defending the client’s position, recommendations for preparing and obtaining additional documents, etc.);
• providing assistance in collecting all the necessary documents
  to justify the customs value, sending a complaint to a higher authority, statements of claim to the court;
• representing the client’s interests
  in customs authorities and in courts of first and subsequent instances;
• preparation and appeal
  of decisions of the court of first instance;
• assistance
  in resolving issues related to enforcement proceedings.

If your organization is faced with a CTS problem, call us right now at +7 495 268 1459 for a free initial consultation or leave a request in the form below and we will call you back as soon as possible. If your question requires detailed information and documents, please send them to [email protected]

Do I need to undergo a customs audit?

Passing a customs audit is not mandatory when carrying out foreign economic activity. But, do not forget that in the absence of knowledge of legislative norms and bases, you may encounter a large number of violations, both on the part of your company and on the part of partners and contractors.

Moreover, these problems can arise even after all operations have been completed, at the stage of verification of your activities by the customs and tax authorities.

As a result, violation of current legislation may result in a ban on the import of the products you purchased into the territory of Russia, imposition of fines, arrest or complete confiscation of a group of goods, transport downtime and damage to products or their depreciation.

Is it possible to undergo a customs audit yourself?

Of course, you can undergo a customs audit yourself.

However, conducting an inspection on your own may still involve risks for the following reasons:

• elementary ignorance of your employee engaged in auditing in the norms and laws of customs clearance and rules for the import and export of goods;
• constantly changing legislation and its features;
• double interpretation of legislative acts, when the rules are interpreted differently by the customs service and the auditor;
• a large number of regulatory authorities that can audit your company and, as a result, a huge number of existing laws.

Customs control based on audit methods

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The growth of international trade and the highly competitive relationships of international commercial activities contribute to the transition from global customs control to selective control, from control during customs operations to control after the release of goods.

The creation of a mechanism for simplifying and speeding up customs procedures is becoming especially relevant nowadays for the following reason. In November 2010, Russia acceded to the International Convention on the Simplification and Harmonization of Customs Procedures (hereinafter referred to as the Kyoto Convention) and committed itself to promoting such simplification of customs procedures.

Note. Federal Law of November 3, 2010 N 279-FZ “On the accession of the Russian Federation to the International Convention on the Simplification and Harmonization of Customs Procedures of May 18, 1973, as amended by the Protocol on Amendments to the International Convention on the Simplification and Harmonization of Customs Procedures of June 26, 1999 of the year".

As follows from standard 6.2 Ch. 6 of the Kyoto Convention, customs controls should be kept to the minimum necessary to ensure compliance with customs legislation. However, we must not forget about ensuring the effectiveness of the instruments of state regulation of foreign economic activity and the quality of customs control. Therefore, in order to speed up and simplify customs procedures and at the same time ensure the effectiveness of the instruments of state regulation of foreign economic activity, it is proposed to transfer the main burden of inspection from the stage of customs current control to the stage of control after the release of goods. The importance of this action increases given the fact that within the 1-2 days allotted by the Customs Code of the Customs Union (Article 196 of the Customs Code of the Customs Union), a complete and high-quality verification of the accuracy and documentary evidence of the information stated in the declaration for goods cannot always be carried out. Therefore, in conditions where the task before the customs service is to simultaneously facilitate trade, speed up the time for completing customs procedures, and ensure compliance with the quality of customs control, the main burden of customs control should be transferred from the stage of current control to the stages of preliminary or subsequent control. For the purposes of further research, it is necessary to consider foreign experience in conducting customs control in general and customs control after the release of goods.

As a result of the analysis of foreign experience in customs control, it was established that the customs services of foreign countries use the following methods of customs control: pre-shipment inspection (carried out before the movement of goods), control using audit methods (carried out after the release of goods). In this article we will consider the mechanisms for implementing customs control after the release of goods.

Note that in Russia some researchers call such control a customs audit. It seems to us that such an interpretation of the essence of customs audit and customs control based on audit methods is incorrect.

To reveal the essence of the methods and forms of customs control used abroad, let us turn to the consideration of customs control after the release of goods. Abroad, such control in accordance with the requirements of the Kyoto Convention is carried out on the basis of audit methods.

From definition E3./F4 of the Kyoto Convention it follows that control based on audit methods is understood as “...measures that allow the customs service to verify the correctness of filling out declarations and the reliability of the information specified in them by checking the relevant accounting books, accounts, document flow and commercial information."

Experts from the World Customs Organization at a seminar on risk management and customs audit, held from June 7 to 10, 2005 in the PRC, explained the concept of customs control after the release of goods using audit methods (post-clearance audit): “... this is a process that allows customs officials verify the accuracy of declarations by examining the books, records, business systems and all relevant customs business data of individuals and entities directly or indirectly involved in international trade.”

In order to study the modern organization of customs control after the release of goods abroad, the development of customs control after the release of goods in China, EU countries, Korea, and Japan was analyzed.

Thus, customs control using audit methods (post clearance audit) in the EU countries is the basis of customs control, and its further development is determined by one of the directions for improving the customs administration system.

In Japan, customs control using audit methods is an important tool to ensure the simplification of customs procedures while preventing violations of laws and fraud.

In the Republic of Korea, in 2000, planned customs control based on audit methods was first introduced. Later, the initiators of such control were the participants in foreign economic activity themselves, which corresponds to standard 6.8 of the Kyoto Convention. Such customs control based on audit methods is based on cooperation between the customs service and participants in foreign economic activity.

Thus, having analyzed the content of customs control using audit methods, we can conclude that its essence lies in monitoring the reliability of the information specified in customs declarations by studying accounting documents and other commercial documents. The main content of such control lies in the methods of control - checking accounting documents and reporting, as well as in the time of implementation - after the release of goods.

Let us turn to the Russian interpretation of the essence of customs audit.

The issues of development of the customs audit system in the Russian Federation were considered in their studies by A.A. Berzan, E.P. Luneva, L.A. Popova, S.A. Chepurnov, S.N. Shostak, A.S. Shvets, O.E. Kudryavtsev, V.V. Soloviev, I.V. Solovyova.

At the same time, Russian scientists highlight the following views on the essence of customs audit.

Some define it as an independent audit carried out by customs auditors - non-state bodies, considered as a system of additional control, which should be created as one of the areas of business activity - a substantive type of auditing activity (S.N. Shostak, A.S. Shvets). According to one opinion, customs audit is a business activity for the independent verification of accounting and other records, financial statements, including specialized ones, of economic entities (legal entities and individuals). It is indicated that customs audit does not replace state control.

According to the opinion of other authors (L.A. Popova, S.A. Chepurnova O.E. Kudryavtsev, V.V. Solovyov, I.V. Solovyova, E.P. Luneva, A.A. Berzan) customs audit - activities of customs authorities carried out after the release of goods, i.e. type of government control.

Thus, a customs audit is understood as “... a form of customs control, which is a systematic process of collecting and evaluating information declared during customs clearance of goods, in order to determine the degree of compliance of this information with the legislation of the Russian Federation.”

According to another definition, “...customs audit is a set of interrelated activities carried out by customs authorities with the aim of conducting audits of the activities of participants in foreign trade activities after completion of customs clearance; business entities directly or indirectly related to goods and vehicles moved across the customs border of the Russian Federation (customs brokers, customs carriers, owners of temporary storage warehouses and other legal entities and individuals), as well as owners of documents related to such movement - in order to ensure compliance with legislation and international treaties of the Russian Federation, control over the implementation of which is entrusted to the customs authorities.”

According to another specialist, “...customs audit is a set of interrelated activities carried out by customs authorities to assess the financial activities of organizations related to goods moved across the customs border in order to ensure compliance with the legislation of the Russian Federation.”

From the above definitions it follows that customs audit is considered as a type of customs control, and also that customs audit is carried out after completion of customs clearance.

In Russia, the term “audit” means “...an independent verification of the accounting (financial) statements of the audited entity in order to express an opinion on the reliability of such statements” and is not related to state control: “...auditing activities do not replace the control over the reliability of accounting (financial) statements carried out by in accordance with the legislation of the Russian Federation by authorized state bodies and local government bodies” (Article 1 of the Federal Law of December 30, 2008 N 307-FZ “On Auditing Activities”).

Therefore, there is no need to introduce the term “customs audit” and equate it with a type of customs control.

However, when carrying out customs control after the release of goods, it is necessary to use audit methods based on the study of accounting data of a participant in foreign economic activity.

Having studied the experience of using customs audit in Russia, it was found that in the region of activity of the North-West Customs Directorate of the Federal Customs Service of Russia, an experiment was conducted to determine ways to create and optimally develop a customs audit system.

In this case, customs audit was considered as one of the areas of business activity - a substantive type of audit activity. As a result, more than 20 customs brokers (according to the current legislation - customs representatives) of St. Petersburg were inspected using the customs audit methodology; serious shortcomings were identified, the suppression of which by the customs authorities (customs control department after the release of goods) would have resulted in the suspension of customs representatives and revocation of the license.

The term “ customs audit ” can only mean a substantive type of business activity, the conduct of which is methodologically similar to customs control after the release of goods.

Methodologically, a customs audit is similar to an inspection by customs authorities after the release of goods. However, the goals of customs audit and customs control carried out by customs authorities differ.

Thus, the purpose of customs control is to identify and suppress offenses related to false statements of information in the customs declaration, and the purpose of a customs audit is to form an opinion about the reliability of the information declared in the customs declaration and to identify the possibility of violations of the legislation of the Russian Federation in terms of customs legislation.

The auditor can give reasonable recommendations if violations of the law and distortions in the importer’s financial statements are detected, but he does not have the right to force decisions to be made. However, based on such recommendations, a foreign trade participant can independently change the data, for example, the value of the declared customs value, thereby avoiding the presence of an offense.

Having analyzed the current situation in the market for consulting services, we can conclude that some companies offer customs audit as one of the substantive types of business activity.

Thus, in the Russian Federation, a customs audit can only be understood as entrepreneurial activity for the independent verification of accounting and other accounting, financial statements, including specialized ones, of economic entities (legal entities and individuals). Customs audit cannot replace customs control.

Note that there is a substantive type of audit activity - tax audit. Naturally, it is not a form of state control, but refers to the substantive type of audit activity.

In the Russian Federation, regulatory legal documents were adopted, which reflect the point of view on the need to use audit methods when conducting customs control.

The Development Strategy of the Customs Service of the Russian Federation until 2020 (Order of the Government of the Russian Federation dated December 28, 2012 N 2575-r “On approval of the Development Strategy of the Customs Service of the Russian Federation until 2021”) notes that one of the directions for the development of the customs service of the Russian Federation is to improve customs control after the release of goods, which first of all requires the creation of a methodological basis for customs control after the release of goods based on audit methods and standardization of verification activities.

To carry out customs control using audit methods, qualified personnel are required who have not only knowledge in the field of customs, but also in the field of audit and financial analysis and other related industries.

Thus, in modern conditions of simplifying customs procedures, it is necessary to create methods for conducting customs control based on audit methods. However, there are not even mechanisms for introducing such control into practice.

Based on the above, we can conclude that the term “customs audit” in Russia can mean a type of business activity.

Carrying out customs control after the release of goods is a promising measure for Russia to comply with customs legislation, especially in the context of the WTO and in connection with the adoption of the Kyoto Convention. Moreover, such control should be carried out using audit methods by specialists with appropriate knowledge. However, due to the lack of a mechanism for introducing such control into practice, its creation is necessary. It is also necessary to create methods for conducting customs control based on audit methods.

June 2013

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