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Successful appeal against the customs authority's decision to refuse to grant an export customs duty benefit Completed a project that included appealing in the court and having the customs authority's refusal invalidated to grant an export customs duty benefit to a Russian ship owner
Lawyers of Pepeliaev Group’s Customs Law practice have completed a project that included appealing in the court and having the customs authority's refusal invalidated to grant an export customs duty benefit to a Russian ship owner.

This case was unique because the client, together with Pepeliaev Group, has become a ground-breaker in applying the new customs duty connected with fuel for seismic survey ships, which was introduced by Federal Law No. 72-FZ dated 1 May 2019. This law provides that the procedure for the benefit to be applied should be established by the Russian Government. However, the Government has delayed adopting the resolution. At the client's request, Pepeliaev Group’s lawyers have prepared and presented, in the framework of public discussions, amendments to the draft resolution prepared by the Russian Ministry of Industry and Trade. Some of these amendments provided that the law could apply retrospectively. However, this proposal has been dismissed. As a result, when the company received the customs authority's refusal to apply the benefit for the reason that there was no resolution of the Russian government, it had to appeal it in the State Commercial Court.

Based on the legal position developed by Pepeliaev Group’s lawyers which took into account previous decisions on similar matters issued by the Russian Constitutional Court and the Russian Supreme State Commercial Court, the State Commercial Court of the Primorsky Territory by its Decision dated 4 December 2019 in case No. А51-20524/2019 upheld the client’s claims and invalidated the customs authority’s refusal to grant an exemption from export tax duty. By the Resolution of the Fifth State Commercial Appeal Court dated 17 February 2020 the decision of the first instance court was left unchanged and the customs authority's appeal was dismissed.
Owing to the efforts of Pepeliaev Group's lawyers, the Russian Federal Customs Service has reimbursed to our client interest on excess customs payments recovered by it The lawyers of Pepeliaev Group’s customs practice have successfully completed a project that involved protecting the interests of our client, a major Russian shipping company, before the Russian Supreme Court's Judicial Panel for Economic Disputes. 
The lawyers of Pepeliaev Group’s customs practice have successfully completed a project that involved protecting the interests of our client, a major Russian shipping company, before the Russian Supreme Court's Judicial Panel for Economic Disputes. A year after the court decided in favour of the client, owing to the efforts of our lawyers, the Federal Customs Service transferred to the client interest of almost RUB 50 million on excess customs payments it recovered. 

It is worth reminding the reader that the case concerned a customs audit resulting in the customs office’s decision that the client had violated the terms and conditions of the customs procedure of temporary import of a tanker in connection with entering into a time charter contract for such tanker. This decision resulted in the company being charged more than RUB 220 million. The client appealed this decision in the Krasnodar Territory Commercial (‘Arbitration’) Court, which decided in favour of the Company (Case No. А32-9485/2016). By the resolution of the appeal court the decision was left unchanged, but the North-Caucasian Circuit Commercial (‘Arbitration’) Court quashed the judgments of the lower-level courts and handed down a resolution in favour of the customs office. The Judicial Panel for Economic Disputes of the Russian Supreme Court accepted the circuit court’s resolution for review and, after examining the client’s complaint, cancelled such resolution and upheld the decisions of the first instance court and of court of appeal.

Legal support to a shipping company on various customs issues Our lawyers provided legal support to a shipping company on various customs issues regarding sea vessels that are used for international and domestic shipments crossing the customs border. 
Our lawyers provided legal support to a shipping company on various customs issues regarding sea vessels that are used for international and domestic shipments crossing the customs border. The work included the following:
  • obtained confirmation from the Russian Federal Customs Service that the legal position we developed regarding the customs clearance of sea vessels was lawful. The sea vessels were imported under bareboat charter contracts to be used for international and domestic shipments subject to exemptions from customs duties and taxes. Our lawyers also provided follow-up legal support;
  • developed the conditions for the customs clearance of fuel as supplies with an exemption from export customs duties;
  • analysed the possibility of clearing re-exports with a customs authority other than that with which the vessel was initially cleared when imported.
The advice was unique in that customs legislation establishes special legal regulation with respect to vehicles used in international shipments. Where certain requirements are met, the corresponding laws provide for simplified customs procedures and customs duties exemptions. However, there are numerous gaps in the legal regulation, and for this reason carriers face considerable difficulties in meeting the requirements entitling them to apply the above simplified procedures and benefits in different situations. Not only did our advice help the client to ensure that all the customs requirements had been complied with, but also enabled it to take advantage of customs benefits while avoiding the risks of breaching the law.

Given the lack of official clarifications and the case law, other carriers utilising vehicles for the international transportation of cargoes and passengers may apply the legal positions that our lawyers have developed.
Successfully protecting the interests of a large manufacturer of plastic windows in a project that involved challenging decisions of the Federal Customs Service The lawyers from Pepeliaev Group’s Customs and Foreign Trade Regulation Practice successfully defended the client in a project that involved challenging decisions of the Federal Customs Service. 
The lawyers from Pepeliaev Group’s Customs and Foreign Trade Regulation Practice successfully defended one of the major manufacturers of plastic windows - REHAU - in a project that involved challenging decisions of the Federal Customs Service. The essence of the dispute was the classification of imported REHAU goods. Konstantin Gaynullin, the Chief Executive Officer of REHAU EAE comments: ‘Cases that involve challenging decisions of the customs authorities are difficult and disputes concerning classification have always been among the hardest in the category. Nevertheless, thanks to the lawyers’ consummate professionalism and the seamless interaction within the team, Pepeliaev Group managed to prove that the classification that was initially stated was correct. REHAU’s position was supported in the state commercial courts of all three levels: both when the case was considered for the first time and when it was reconsidered’.
Representing FIFA's interests in work on a range of regulations Pepeliaev Group’s lawyers have represented FIFA’s interests having worked on these regulations, from the very outset developing their concept and producing drafts.
On March 3 and 21 respectively, the Board of the Eurasian Economic Commission (EEC) officially published its Decision No. 151 On importing (exporting) goods for the purposes of organising and holding the 2018 FIFA World Cup and the 2017 FIFA Confederations Cup and Decision No. 165 On amending the list of categories of goods in respect of which a special customs procedure may be established and the terms and conditions for such goods to be placed under the customs procedure both dated 18 October 2016. These decisions were adopted to ensure compliance by the Russian Government with the obligations it has assumed to hold the 2018 FIFA World Cup and the 2017 FIFA Confederations Cup with respect to granting an exemption from import customs duties, taxes and charges. They also ensure that simplified procedures are applied when goods that are imported with a view to organising and holding the World Cup are declared at customs and undergo customs control. The decisions allow for the taking into account of special aspects arising in the management of large international sports competitions, the removal of administrative barriers and related costs incurred by the organisers and participants of sports events, and the clarification of certain matters related to legal regulation. They will ensure more flexible application of the special customs procedure with respect to the sports events, given the international practice and the experience of holding such events in Russia. Pepeliaev Group’s lawyers have represented FIFA’s interests having worked on these regulations, from the very outset developing their concept and producing drafts. In the course of implementing this project, the firm’s lawyers have acquired tremendous experience of agreeing the decisions with the parties involved: Russian Federal authorities, government commissions, core EEC departments, and state authorities of other member states of the Eurasian Economic Union.
Involvement in the preparation of a new Resolution of the Plenum of the Russian Supreme Court on customs disputes. Pepeliaev Group’s lawyers joined the working group that has prepared the new Resolution of the Plenum of the Russian Supreme Court on customs disputes.
Pepeliaev Group’s lawyers joined the working group that has prepared the new Resolution of the Plenum of the Russian Supreme Court on customs disputes. The work continued for several months. Our proposals were reflected in Resolution No. 18 of the Plenum of the Russian Supreme Court “On certain matters connected with the courts applying customs legislation” dated 12 May 2016.
Providing advice on the customs consequences of implementing different business models

Pepeliaev Group’s lawyers advised clients on a number of matters related to customs regulation, among them: (i) customs benefits applied in special economic zones, in free warehouses and in territories of advanced social and economic development; (ii) customs consequences of applying agency (commission-based) models for supplies of goods, and the use of consignment and leasing agreements; (iii) the possibility to import and export commercial cargo by branch offices of foreign companies, and the import of goods used as contribution to the issued capital of a foreign investor.

Building positive case law on customs benefits

Pepeliaev Group’s lawyers successfully represented companies providing services in the area of mineral production. When contesting the decisions of the Sakhalin customs authorities regarding the application of customs duties for the contractor with regard to the goods imported for the Sakhalin-2 PSA, our lawyers managed build positive case law for the importer which was subsequently applied to the Sakhalin-1 PSA as well. Moreover, the practice’s lawyers challenged in a commercial (‘arbitration’) court a decision of the customs authority disallowing the application of a customs benefit with regard to equipment imported as contribution to the issued capital. Owing to the efforts of our lawyers the client managed to avoid the need to pay additionally accrued duties in the amount of RUB 20 million.

Developed the optimal scenario for the import of equipment for a major car manufacturer

Pepeliaev Group’s lawyers developed the optimal scenario to import equipment taking into consideration its specific features, the possibility to ship it in assembled form, and contractual relations between the clients and their suppliers of equipment. Our experts also developed a scenario to import the equipment in parts and components and set up a schedule for supplies of such parts. In order to develop a fitting import model, the following factors also had to be taken in account: (i) assigning CCFT codes to the imported equipment and its parts, (ii) the possibility to apply zero import duties and VAT rates to production equipment manufactured outside Russia, (iii) whether it was necessary to obtain certificates of conformity for the equipment and its parts and components as well as special aspects of calculating their customs value, and (iv) whether it was possible to repair or recycle conditionally released equipment as well as the customs requirements when doing so. 

Assisting a major investor to obtain federal benefits

Our lawyers provided legal assistance to a leading global car manufacturer in the context of building a car assembly plant in St Petersburg. The project involved negotiations with the representatives of regional state authorities on issues related to obtaining the status of a strategic investor, and providing support to the client in negotiations with the Russian Ministry of Economic Development and Trade, the Federal Customs Service, and other bodies. In addition, our lawyers provided support to the client when entering into an investment agreement, selecting a land plot, and provided advice on employment matters when putting the completed plant into operation. 

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