Customs authority's decision on non-execution of notice reversed by court

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Situation

When importing goods into the EAEU territory, the customs authority detected indications of incorrect determination of customs value — the price of the imported goods was below the price of identical goods according to the customs declarations database. The client received a notice to remedy breaches in the amount of 3,684,786 tenge. The client disagreed with the notice and, within the prescribed period — on the 19th working day — submitted to the customs authority a detailed written response with a full set of documents for each goods declaration: invoices, packing lists, CMR, export declarations, price lists, transportation acts, accounts, payment orders, contract with the supplier, contracts with carriers, bank statements, technical descriptions of the goods. Nevertheless, the customs authority issued a decision deeming the notice not executed, citing the absence of a contract and transport documents — which had in fact been attached to the response. A complaint to the State Revenue Committee (КГД МФ РК) was unsuccessful.

Our actions

We identified the key breach: under sub-clause 2) of art. 417(3-2) of the Customs Code of Kazakhstan, the submission of a written response with supporting documents in case of disagreement with identified breaches is itself recognised as execution of the notice. The rule is mandatory — submitting the response automatically means execution of the notice regardless of the customs authority's assessment of the documents' content. We demonstrated that by issuing the non-execution decision, the customs authority had effectively entered into a discussion of the sufficiency of the documents submitted to confirm customs value — which is the subject of an unscheduled on-site audit, not desk control. Such actions exceed the customs authority's competence at that stage. This position is confirmed by a ruling of the Supreme Court of Kazakhstan: when considering disputes challenging decisions arising from customs desk control, the court is not entitled to enter into a discussion of the issue of customs value.

Result

The СМАС of Astana granted the claim in full. The customs authority's decision deeming the notice to remedy breaches not executed was declared unlawful and reversed. The state fee was returned to the client. The court stated: submission of a written response with documents within the prescribed period is execution of the notice by direct operation of law. The customs authority is not entitled to deem the notice not executed on the basis of its assessment of the sufficiency of documents to confirm customs value.

Project team

Alibayev Yerkebulan

Director

Khassanov Yerbolat

Managing partner

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Часто задаваемые вопросы

Under sub-clause 2) of art. 417(3-2) of the Customs Code of Kazakhstan, in case of disagreement with the notice its execution consists in submitting a written response with supporting documents within 20 working days. The rule is mandatory — submitting the response within the deadline itself constitutes execution of the notice.

No. Assessing the sufficiency of documents to confirm customs value is the subject of an unscheduled on-site customs audit. At the desk control stage the customs authority is not entitled to refuse recognition of the notice as executed on grounds of incomplete documentation.

Reversal of the decision restores the declarant's legal position to that before it was issued. The customs authority is entitled to initiate an unscheduled on-site audit in the established manner, but the unlawful decision on non-execution of the notice cannot serve as a basis for assessing additional customs payments.

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