Firstly, the Supreme court reiterated that the burden of proof in respect of circumstances that served as the ground for adjusting the customs value is on the customs authority and cannot be shifted to the declarant or customs representative.
Secondly, the Supreme court stated that information from foreign websites, including trading platforms and price aggregators, cannot be considered either as sufficient or independent evidence of the value of goods being understated or as price sources for adjustment purposes.
Background
Case No. A51-4600/2024 was heard by the Supreme court of the Russian Federation on the cassation appeal of Alterna Transport and Logistics Company LLC (customs representative) against the rulings of the appellate and cassation courts.An individual purchased a used Hyundai Staria in the Republic of Korea for personal use. A customs representative was engaged to clear the vehicle through customs.
At the time of declaration, the vehicle’s value was declared and documented at USD21,700, based on which customs duties were calculated and paid, after which the vehicle was released for free circulation.
Later, during post-release control, the Vladivostok Customs concluded that the vehicle’s value had been understated. This conclusion was based on information from the website carstat.kr, which, in turn, referenced data from the trading platform encar.com. According to this information, a similar car was sold for USD40,201.
Based solely on this information, the customs authority adjusted the value of the goods and assessed additional customs duties. The customs authority provided no other evidence.
The court of first instance found the customs authority’s decision unlawful, stating that the documents submitted by the declarant confirmed the actual purchase price, and that online information alone cannot serve as a sufficient ground for adjusting the value.
Position of the Supreme court
The Judicial Collegium on Economic Disputes of the Supreme court of the Russian Federation set aside the rulings of the appellate and cassation courts and upheld the decision of the court of first instance.The Supreme court, in particular, emphasised the following:
- with respect to goods for personal use, special rules for determining the value established by article 267 of the EAEU Customs Code apply, rather than the general rules on the customs value of goods imported for business purposes;
- a special regulatory regime is due to the fact that individuals purchasing goods for personal use are objectively limited in their ability to submit the same volume of commercial documentation that is typically available to professional participants in foreign economic activity;
- although information posted in catalogues and on websites of foreign organisations may be used by the customs authority as a source of information on the value of goods, such information does not have a pre-established force and is not absolute proof of the inaccuracy of the declared value;
- in the event of a disagreement with the value provided by the declarant, the customs authority bears the burden of proving that the declared value cannot be used to calculate customs duties and is subject to adjustment;
- the customs authority and the appellate and cassation courts that supported it actually based their conclusion on the understated value on a sole piece of evidence — information from the carstat.kr website — without properly assessing the objections and evidence presented by the Customs Representative and the individual;
- the appellate court unlawfully shifted the burden of proof of the value of the goods from the customs authority to the applicant, which is contrary to articles 65 and 200 of the Arbitrazh Procedure Code of the Russian Federation.
Significance of the case
The case under consideration is of practical interest primarily from the perspective of standards of proof in disputes over customs value adjustments.Firstly, the court explicitly stated that shifting the burden of proof to the applicant is inadmissible in disputes challenging customs authority decisions.
Secondly, this position limits the practice of customs authorities adjusting the value of goods solely based on price information from certain internet resources or trading platforms, without providing evidence that the goods at such prices were actually sold and delivered to the EAEU.
Therefore, the Supreme court effectively confirmed that the use of internet sources is permissible only as an auxiliary analytical tool, and not as an independent ground for adjusting the value.
Despite the reservation regarding the application of special rules for determining the customs value of goods imported by individuals, this ruling plays an important role in judicial practice, as it reminds courts of the importance of paying attention to the issue of allocating the burden of proof and the requirements for evidence.
