Clarifications that require clarification: the Russian Ministry of Finance updates its position on inclusion of dividends in the customs value

We have already covered this issue during a series of customs webinars, as well as in previous publications on the development of judicial practice and the letter of the Ministry of Finance dated 27 June 2024. However, legal uncertainty remains, and the courts, with few exceptions, continue to support the customs authorities.

Recently, the Russian Ministry of Finance (“Ministry of Finance”) sent the Russian Federal Customs Service its position on this issue (“LetterLetter No. 27-01-21/11349 dated 10 February 2025”). However, the much-anticipated Letter of the Ministry of Finance, in our opinion, does not so much clarify the issue as add new contradictions and risks for Russian importers.

Key points

The Ministry of Finance speaks about minimising the risks of elements of the value of goods being manipulated, but does not oblige customs authorities to prove the understatement of the customs value

According to the position of the Ministry of Finance, in order to minimise the risk of elements of the customs value being manipulated, as pointed outSee Rulings of the Judicial Panel for Economic Disputes of the Supreme Court of the Russian Federation of 1 December 2022 No. 305-ES22-11464 in case No. A40-20125/2021, of 2 December 2022 No. 310-ES22-8937 in case No. A09-1129/2021, of 2 December 2022 No. 310-ES22-9639 in case No. A09-1751/2021 by the Supreme Court of the Russian Federation, customs authorities need to analyse the circumstances surrounding the sale, including:

• the conditions of acquiring goods; and
• the procedure (methodology) of pricing by the exporter.

The Ministry of Finance’s indication of the need to analyse the circumstances surrounding the sale of goods is a positive step, as it may change the practice whereby customs authorities by default include dividends in the customs value of goods in all intra-group transactions.

However, the Ministry of Finance has not indicated the necessity for customs authorities to establish that the customs value is understated, which does not eliminate the existing legal uncertainty.

Limitation of ways to prove the absence of manipulation of elements of the value of goods

The Ministry of Finance actually imposed on the declarant the obligation to prove that the price of goods was formed under competitive market conditions. If the declarant fails to confirm the market conditions or provide information on the seller’s pricing methodology, then dividends should be included in the customs value, according to the Ministry of Finance.

Therefore, instead of imposing the obligation on the customs authority to prove the manipulation of elements of the customs value, the Ministry of Finance has obligedClause 5 of Article 39 of the Customs Code of the EAEU, Section IV of the Rules approved by Decision of the Board of the Eurasian Economic Commission No. 283 “On the Application of the Method for Determining the Customs Value of Goods at the Transaction Value of Imported Goods (Method 1)” (together with the “Rules for the Application of the Method for Determining the Customs Value of Goods at the Transaction Value of Imported Goods (Method 1)”) dated 20 December 2012 the declarant to prove the opposite and in only one way, as compared to the statutory ones.

 For many, this may prove to be very problematic, at least for the following reasons:

• if goods are imported by a single authorised distributor, there may simply be no examples of other persons importing the same goods;
• even if there are, it would not be surprising if their purchase prices are higher than those of the authorised distributor subsidiary;
• most sellers are not willing to disclose pricing information.

Furthermore, the Ministry of Finance requires the declarant to confirm the “marketability of the price” of goods, but does not disclose the content of the indicated definition, which is absent in the customs legislation. This leaves a wide scope for different interpretation by customs authorities and declarants.

However, speaking about the need to include payments in the customs value, the Ministry of Finance mixes the concepts of “dividends” and “payments that are dividends only in form,” which does not correspond to the positionSee the abovementioned Rulings of the Judicial Panel for Economic Disputes of the Supreme Court of the Russian Federation, as well as the Decision of the Panel of the EAEU Court of Justice of 22 October 2024 in Case No. C-10/24, the Decision of the Appeal Chamber of the EAEU Court of 12 February 2025 in Case No. C-10/24 of the highest courts.

The possibility of including dividends in the customs value of goods supplied by a person who is not a founder is permitted

In the Letter, the Ministry of Finance uses the phrase “a transaction made between members of the same group of companies” and also points to payments that ensure that “the seller, including members of the same group of companies as the company’s participants” receives part of the income due.

Therefore, in the opinion of the Ministry of Finance, dividends may be included in the customs value of goods supplied by any interrelated person within a group of companies, which also formally diverges from the above position of the Supreme Court of the Russian Federation.

Possibility of applying the procedure for the deferred determination of customs value to include dividends

The Ministry of Finance admits the possibility of applying the procedure for the deferred determination of the customs value to include dividends, but this approach is most likely not feasible in practice.

The problem is that at the time of filing the customs declaration, the decision to pay dividends has not yet been made, and neither their existence nor their amount is known. Therefore, the requirement for the contract to contain a clause stipulating a portion of the income to the seller and the procedureDecision of the Panel of the Eurasian Economic Commission of 19 June 2018 No. 103 “On Approval of the Procedure for the Deferred Determination of the Customs Value of Goods” for calculating that portion is not met in the case of dividends. This casts doubt on the possibility of applying the deferred customs valuation mechanism.

Recommendations

It is still unclear how the customs authorities will interpret the new position of the Ministry of Finance and whether it will affect judicial practice.

The main argument of businesses remains the argument about the economic inexpediency of paying a part of the value of goods to the seller under the guise of dividends and the loss of the aggregate state budget from the position of customs authorities, but the Ministry of Finance still does not hear it.

Currently, the possibility of developing a legal act at the EEC level to clarify the procedure for including part of the income (proceeds) from the sale of goods, directly or indirectly due to the seller, in the customs value of goods is being discussed, which should bring uniformity to the law enforcement practice of the EAEU member states on this issue.

Given the ambiguity of the Ministry of Finance’s position, our recommendations on the need to confirm the marketability of pricing by all means available in each specific case remain particularly relevant.