Pepeliaev Group’s Customs Practice has successfully completed a 4 year long litigation

Lawyers of Pepeliaev Group’s Customs Law Practice have won a litigation which started on 24 November 2020 (case No. А51-18513/2020). This case was instigated by the Vladivostok Customs Office, which filed with a state commercial court a claim to recover import customs duties and default interest of over RUB 1.7 billion in total because this sum included the cost of a business aircraft. In September 2019, this aircraft was imported to the customs territory of the Eurasian Economic Union (EAEU) for guests of the Eastern Economic Forum. During customs clearance, the aircraft was placed by the customs representative (broker) under the simplified customs procedure of temporary import (i.e. without declarations of goods being filed, based on an application accompanied by an undertaking that the aircraft would be re-exported, which was signed by its captain) with a full exemption for 30 days from the payment of import customs duties and VAT. Before this period expired, the aircraft had been exported, but no application was filed to terminate the temporary import by re-export. The customs office found this out only a year later, despite the fact that the aircraft had been used for international carriage several times during that year. Not only did the customs office hold the aircraft operator administratively liable under article 16.19(3) of the Code of Administrative Offences (with a fine of RUB 50,000 being charged), but it also required a payment of import customs duties and interest for the late payment of them as though the aircraft had stayed in the customs territory of the EAEU.

In order to protect the aircraft operator's interests, it was necessary to have the Notification of the unpaid customs payments invalidated together with the Decision to recover the unpaid customs payments from the cost of the goods. Acting in the aircraft operator's interests, our lawyers prepared and filed with the court an application to this effect (case No. А51-576/2021). The litigation in case No. А51-18513/2020 was suspended.

Having considered the aircraft operator’s application, the first instance court and the appellate court denied its claims. The cassation court set aside these judicial acts and referred the case to be reconsidered. During the new consideration, courts of three levels dismissed the company's claims. In view of this, proceedings in case No.  А51-18513/2020 were resumed and the first instance court upheld the claims of the customs office. However, a judge of the Supreme Court referred the company's complaint to be considered by the Judicial Board. The litigation in case No. А51-18513/2020 was once again suspended in the appellate court. The Judicial Board for Economic Disputes of the Russian Supreme Court set aside the judicial acts in case No. А51-576/2021 and referred the case to be reconsidered. Based on its interpretation of legislation and on the objectives of legal regulation, the Supreme Court agreed with the applicant's arguments that, despite the fact that the Notification and Decision being challenged were formally consistent with legal norms, they contradicted the economic grounds for customs payments to be imposed on goods which have not spent a single day in the customs territory of the EAEU in violation of economic interests of member states of the Union. Further to the outcome of the third consideration of this dispute, the judge finally upheld the company's claims in full and the customs office raised no objections. Following that, in the appellate proceedings in case No. А51-18513/2020, the customs office filed a motion of withdrawal of its claims and fully acknowledged its defeat.