Taxation – Euro Customs tackled on duty

European Customs authorities have been dealt a blow in their battle to recover duty from importers who are victims of government fraud or incompetence.

Some companies have imported products on which they expected to pay no duty, only to find the products have been given a false certificate of authenticity by the national government in question. Customs has charged back-duty where such frauds have been discovered.

The European Parliament promised to discuss this issue last October but delayed the hearing until April this year, and has recently rescheduled for June.

But solicitor Titmuss Sainer Dechert told Accountancy Age this week it has helped the German importer Eyckeler & Malt to win its case against Customs, setting a new precedent for companies caught out by false certificates.

Eyckeler thought it was importing ‘Hilton Beef’ from Argentina, which was free of duty or a CAP levy. But in 1993, two years after the first import, Customs discovered that more than 460 certificates for the beef had been falsified. Consequently, German Customs tried to recover the levies on this beef.

But the Court of First Instance in Luxembourg ruled in favour of Eyckeler, concluding the burden of proving negligence on the part of the importer fell on Customs.

In addition the court said Customs was obliged to ensure the correct application of Hilton beef quotas, and was at fault for not having done so until after the event.

Malachy Cornwell-Kelly, solicitor at Titmuss Sainer Dechert, said the case could set an important precedent that when they are caught out by false certificates, importers will no longer be forced to pay back-duty.

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