What Is Customs Law? When Is a Lawyer's Support Needed?

customs legislation

For companies engaged in international trade and for persons carrying out import or export transactions, customs procedures do not consist solely of the entry of goods into, or their exit from, the country. Many legal and administrative steps — such as preparing the declaration, correctly classifying the goods, determining the customs value, calculating the taxes and drawing up the relevant documents — form part of the same process.

For this reason, a minor error in a declaration or a misinterpretation of the legislation may give rise to serious financial consequences. In particular, where customs penalties, additional tax assessments or administrative disputes are encountered, proper management of the legal process becomes important.

So what exactly does customs law cover? In which situations is the support of a customs law lawyer needed? How are customs disputes handled? In this article, we discuss the importance of legal support in customs transactions and the key points to which attention should be paid.

What Is Customs Law?

Customs law is the field of law that regulates the rules to be applied in foreign trade transactions, above all imports and exports. Many matters — from taxes to customs declarations, and from the tariff classification of goods to the various customs regimes — fall within this field.

In Türkiye, customs transactions are carried out within the framework of various laws, regulations, communiqués and other secondary legislation. The Ministry of Trade (Ticaret Bakanlığı) also publishes current legislation, documents, practices and information resources relating to customs transactions.

Customs law does not cover only the transactions that arise while goods are being cleared through customs. Subsequent controls, tax and penalty decisions, objection procedures and administrative disputes are also important parts of this field.

Why Is Customs Legislation Important?

Information such as the nature, origin, value and tariff position of the goods used in foreign trade may directly affect the customs procedures to be applied. For this reason, having up-to-date knowledge of customs legislation is important not only for completing transactions quickly but also for reducing potential legal and financial risks.

Since customs legislation may change over time, it may not be correct to assume that a transaction carried out previously will be treated in the same way today. Businesses that import or export on a regular basis in particular need to follow legislative changes.

The main matters to which businesses should pay attention are as follows:

·         The accuracy of the information in the customs declaration

·         Assessment of the goods under the correct tariff position

·         Correct determination of the customs value

·         Correct calculation of taxes and other financial obligations

·         Complete preparation of import and export documents

·         Timely procurement of the relevant permits and documents

·         Monitoring of the controls carried out by the customs administration

A problem in any of these matters may turn into a customs dispute at later stages.

In Which Matters Does a Customs Law Lawyer Provide Support?

It cannot be said that a lawyer must necessarily be present at every stage of customs transactions. However, where the transaction carries legal or financial risk, specialist legal support may provide a significant advantage.

A customs law lawyer may help plan the legal process by assessing the relevant legislation according to the nature of the case. In particular, when an administrative act or a penalty is encountered, rather than looking only at the outcome of the decision, it is necessary to examine on what grounds the decision was made and whether it complies with the relevant legislation.

The main areas in which a customs law lawyer may provide support may include the following:

·         Examination of legal problems arising from customs declarations

·         Assessment of disputes concerning customs taxes and additional assessments

·         Examination of the legal remedies against customs penalties

·         Assessment of problems relating to customs value and tariff classification

·         Conduct of application and litigation processes against acts of the customs administration

·         Prior assessment of legal risks in import and export transactions

·         Legal consultancy aimed at resolving customs disputes

Coşkun GENÇ provides legal consultancy and litigation services on matters such as customs declarations, determinations of the Customs Tariff Statistical Position (GTİP), inward and outward processing regimes (dahilde ve hariçte işleme rejimleri), refunds of customs taxes, objections to customs penalties and the resolution of customs disputes.

In Which Situations May Customs Penalties Arise?

Where a breach of the legislation is identified in customs transactions, various administrative sanctions may arise. However, the sanction to be applied may vary according to the nature of the case, the type of breach and the resulting loss of tax.

For example, the fact that the declared value is lower than the value that should have been determined under the legislation may, in some cases, result in the imposition of a fine in addition to the tax difference. Statements by the Ministry of Trade indicate that, under the relevant provisions of the Customs Law (Gümrük Kanunu), different sanctions are provided for different types of breach.

For this reason, where a business receives a customs penalty, rather than focusing solely on the amount of the penalty, it is necessary to examine the legal basis of the decision and the specific circumstances of the case.

Where customs penalties are encountered, it is particularly important to carefully assess the following documents:

1.      Customs declaration

2.      Invoice and commercial documents

3.      Transport documents

4.      Certificates of origin

5.      Findings and decisions of the customs administration

6.      Tax and penalty calculations

7.      Documents relating to the tariff classification and valuation of the goods

Since the legal remedy that may be pursued may vary according to the particular features of the specific case, it is important to obtain a professional assessment so that time limits are not missed.

How Do Customs Disputes Arise?

Customs disputes mostly stem from legal disagreements arising between the customs administration and importers, exporters or other persons concerned.

For example, the parties may hold different views as to the GTİP under which a product should be assessed. Similarly, disputes may also arise regarding the customs value of the goods, their origin or the tax rates to be applied.

In some cases, additional assessments and penalty decisions may arise as a result of a post-clearance control (sonradan kontrol) or secondary control (ikincil kontrol) carried out after the customs transactions have been completed. The Ministry of Trade has announced that, in recent years, significant amounts of additional assessments and penalty decisions have been issued as a result of examinations carried out within the scope of post-clearance control and secondary control.

For this reason, one should not assume that customs disputes arise only while the goods are at customs. Audits carried out after the transaction has been completed may also have legal consequences.

In Which Situations May It Be Beneficial to Obtain the Support of a Lawyer?

Not every customs transaction involves litigation or a legal dispute. However, in the following situations, obtaining the support of a customs law lawyer may be of particular importance:

Where There Is a Dispute Involving a High Amount

Where the tax difference or the penalty that may be imposed is high, it is important to examine the legal aspect of the transaction in detail. Even a declaration discrepancy that appears minor may give rise to significant financial consequences.

Where a Customs Penalty Has Been Served

Upon service of the customs penalty, the relevant time limits and avenues of application become important. The lawfulness of the decision and the remedy that may be pursued should be assessed on the basis of the specific case.

Where There Is a Disagreement Concerning the Tariff or GTİP

The tariff classification of goods may have significant consequences in terms of the tax and other obligations to be applied. Customs disputes arising in this respect may require both technical and legal assessment together.

Where a Post-Clearance Control Is Being Carried Out

The fact that a customs transaction has been completed does not mean that all risks relating to the matter have ended. Past transactions may be re-examined within the scope of subsequent controls. At this stage, it is important to assess the documents and the findings of the administration from a legal perspective.

How Can Legal Risks in Customs Transactions Be Reduced?

From the perspective of customs law, the most effective approach is to identify risks in advance as far as possible, rather than intervening after a problem has arisen.

Some basic steps that companies can take are as follows:

·         Checking the necessary documents before the transaction

·         Correctly carrying out the tariff classification of the goods

·         Keeping documents relating to the customs value in an orderly manner

·         Following legislative changes

·         Comparing the information in declarations with the commercial documents

·         Examining notifications and decisions from the customs administration without delay

·         Obtaining legal consultancy for risky or complex transactions

Particularly for businesses that engage regularly in foreign trade, preventive legal consultancy may facilitate the management of customs disputes that may arise later.

Conclusion:

Although customs transactions are an important part of commercial activities, they are subject to a large number of legal and administrative rules. An error made within the framework of customs legislation may give rise to consequences such as a tax difference, an administrative sanction or a customs penalty.

For this reason, businesses that import and export need to pay attention not only to the completion of the transaction but also to the transaction being carried out in accordance with the law. Particularly in transactions involving high financial risk, in customs disputes or when faced with penalty decisions, specialist legal support may help the process to be assessed more soundly.

Coşkun GENÇ provides consultancy and dispute resolution services in the field of customs law. If you are experiencing a legal problem with your customs transactions or would like your current transaction to be assessed from a legal perspective, you may obtain professional legal support by providing the relevant documents.

Frequently Asked Questions

What transactions does customs law cover?

Customs law covers many legal matters connected with foreign trade transactions, such as imports, exports, customs declarations, taxes, tariff classification, customs regimes, administrative sanctions and customs disputes.

When should a customs law lawyer become involved?

Where a customs penalty, an additional tax assessment, a tariff classification disagreement or an administrative act is encountered, it may be beneficial for a customs law lawyer to carry out a legal assessment. Preventive consultancy may also be obtained for risky foreign trade transactions.

Can legal action be taken against customs penalties?

Depending on the particular features of the specific case, there may be legal remedies available in respect of the customs penalty and the related administrative acts. However, since the applicable remedy may vary according to the content of the decision and the relevant legislation, the file needs to be examined by a specialist.

Do customs disputes arise only during importation?

No. Customs disputes may arise during the transaction, and they may also arise as a result of controls and examinations carried out after the transaction has been completed. For this reason, it is important to keep the documents relating to past transactions in an orderly manner.

Why is it important to follow changes in customs legislation?

Since customs legislation consists of various laws, regulations, communiqués and other provisions, practices may change over time. Following current regulations helps reduce the legal and financial risks that may arise from incorrect or incomplete practices in foreign trade transactions.