Customs payments, customs value, and the country of origin of goods
The basics of imposition of customs duties during movement of goods across the customs border of the Customs Union are defined in the Customs Code of the Customs Union, which specifies the classification of customs duties, establishes the procedure for calculation thereof, determines payers of customs duties, creation and termination of the obligation to pay customs duties and taxes, establishes the due date for payment, governs, in general, payment of customs duties and specifics of the use of customs duties according to the declared customs procedure.
The rescheduling of payment of import customs duties are governed by the Agreement on the Basis, Conditions and Procedure for Rescheduling of Payment of Customs Duties dated May 21, 2010.
Specifics of the use of security for payment of customs duties and taxes are defined by the Agreement on Certain Issues of Granting Security for Payment of Customs Duties and Taxes in Respect of Goods Transported According to the Customs Procedure for Customs Transit, Specifics of Collection of Customs Duties and Taxes and the Procedure for Transfer of Such Payments in Respect of Such Goods dated May 21, 2010.
However, a number of issues, such as the mode of payment of customs duties and taxes, procedure for the use of general security for payment of customs duties and taxes, application of ways to secure the payment of customs duties and taxes according to the Customs Code of the Customs Union, procedure for return of overpaid customs duties and taxes, procedure for collection of customs duties and taxes, are governed by the legislation of the Member States of the Customs Union.
According to Article 70 of the Customs Code of the Customs Union, here are the customs duties:
1) import customs duty;
2) export customs duty;
3) value added tax charged on goods imported into the customs territory of the Customs Union;
4) excise tax (excise taxes) charged on goods imported into the customs territory of the Customs Union;
5) customs duties.
The above duties are of different nature and, thus, have essential features of legal regulation.
Import customs duties.
The customs duty, being a mandatory payment charged by customs authorities for the movement of goods across the customs border (cl. 25, par. 1, Art. 4 of the CC of the CU), is a tool of tariff regulation of the foreign trade. For the purpose of operation of the Customs Union, the unified customs tariff and common measures of regulation of the foreign trade with third countries (Agreement on Creation of the Common Customs Territory and Establishment of the Customs Union dated October 6, 2007) are defined and applied.
The legal aspects of setting and calculation of import customs duties, as well as definition and application of tariff preferences are governed by the Agreement on the Unified Customs Tariff Regulation dated January 25, 2008, which determines the procedure for setting the Unified Customs Tariff, rates of import customs duties, application of tariff preferences (in the form of exemption or reduced rate), exemptions from import customs duties and the procedure for application of duty rates depending on the country of origin of goods.
The Unified Customs Tariff is a set of rates of customs duties applied to goods imported into the common customs territory from third countries, classified according to the uniform Foreign Economic Activity Commodity Nomenclature (FEACN).
The rates of import customs duties shall be set by the Commission. The rates of import customs duties used today are approved by Decision No. 54 of the Board of the Eurasian Economic Commission dated July 16, 2012.
The Unified Customs Tariff includes the following rates of import customs duties:
1) ad valorem rate calculated as a percentage of the customs value of taxable goods;
2) specific rate calculated per unit of taxable goods;
3) combined rate that combines the ad valorem and specific components.
The use of import customs duties depends on the country of origin of goods.
As such, there is the common system of tariff preferences used in the Customs Union. The lists of countries that use the common system of tariff preferences of the Customs Union and the list of goods originating from developing countries and the least developed countries, covered by tariff preferences during their importation into the common customs territory, shall be specified by the Commission (Resolution No. 130 of the Commission of the Customs Union dated November 27, 2009 “On the Unified Customs Tariff Regulation of the Customs Union of the Republic of Belarus, Republic of Kazakhstan and Russian Federation”).
In respect of goods included in this list and originating from developing countries that use the common system of tariff preferences of the Customs Union, the rates of import customs duties are 75 percent of the import customs duty rates of the Common Customs Tariff.
In respect of goods included in this list, originating from the least developed countries that use the common system of tariff preferences and imported into the common customs territory, the zero import customs duty rates shall apply.
The amount of payable customs duty shall be determined using the basis for calculation of the customs duty and the relevant rate of duty (Art. 76 of the CC of the CU). Thus, in order to determine the correct amount of payable customs duty it is extremely important to perform correct classification of goods, correct determination of the country of origin of goods and correct use of the basis for calculation of the customs duty – customs value and (or) other characteristic of goods.
Tariff preferences shall be applied in the form of exemption from payment of import customs duties or reduction in import customs duties.
The use of tariff preferences are governed by the provisions of Article 5 and Article 6 of the Agreement on the Unified Customs Tariff Regulation dated January 25, 2008.
According to the Protocol of Granting Tariff Preferences dated December 12, 2008, the decision to grant tariff preferences to the extent not covered by the Agreement on the Unified Customs Tariff Regulation dated January 25, 2008, shall be made by the Commission. Such tariff preferences are established by Resolution No. 130 “On the Unified Customs Tariff Regulation of the Customs Union of the Republic of Belarus, Repuclic of Kazakhstan and Russian Federation” of the Commission of the Customs Union dated November 27, 2009.
The procedure for payment of import customs duties is governed by Chapter 11 of the Customs Code of the Customs Union with respect to standards defined by the Agreement on Establishment and Application of the Procedure for Crediting and Distribution of Import Customs Duties in the Customs Union dated May 20, 2010.
Export customs duties
Export customs duties shall be set at the level of national legislation of the Member States of the Customs Union. The procedure for calculation and payment of export customs duties is governed by the Customs Code of the Customs Union and, if not covered by the customs legislation of the Customs Union, by the national legislation of the Members States of the Customs Union. In respect of crude oil and certain categories of oil products exported from the territory of the Republic of Belarus, a special procedure for payment and crediting of export customs duties is established (according to the Agreement on the Procedure for Payment and Crediting of Export Customs Duties (Other Duties, Taxes and Charges of Equivalent Effect) for Crude Oil and Certain Categories of Oil Products Exported from the Territory of the Republic of Belarus Outside the Customs Territory of the Customs Union dated December 9, 2010).
According to the relevant regulations of the Member States of the Customs Union, the rates of export customs duties shall be determined in the context of classification of goods as per the FEACN of the CU. In respect of goods subject to export customs duties, the ad valorem, specific and combined customs duty rates shall be applied. Therefore, the correct calculation of the amount of payable export customs duty is directly related to the correct classification of goods and correct determination of the basis for calculation of the customs duty – customs value and (or) other characteristic of goods.
Excise taxes, value added tax
The procedure for setting, imposition and application of excise taxes and the VAT is governed by the legislation of the Member States of the Customs Union.
Laws of the Member States of the Customs Union define the tax rates, procedure for calculation of the tax base, tax preferences and procedure for calculation of the amount of payable taxes.
However, specifics of application of taxes according to the declared customs procedure are governed by the Customs Code of the Customs Union.
Customs duties
Customs duties are mandatory payments charged by customs authorities for their actions related to release of goods, customs escort of goods and for other actions, as defined by the Customs Code of the Customs Union and (or) the legislation of the Member States of the Customs Union.
The types and rates of customs duties shall be specified in the legislation of the Member States of the Customs Union.
However, the amount of customs duty shall not exceed the estimated expenses of customs authorities for actions in respect of which the customs duty is charged.
"The payers of customs duties, due dates for payment of customs duties, procedure for their calculation, payment, return (offset) and collection, as well as cases when customs duties are not payable shall be determined by the Customs Code of the Customs Union and (or) the legislation of the Member
States of the Customs Union."
Other payments charged by customs authorities.
In addition to customs duties, customs authorities shall charge special safeguard, anti-dumping and countervailing duties, as specified in the Agreement on Application of Special Safeguard, Antidumping and Countervailing Measures against Third Countries dated January 25, 2008. These duties shall be charged in the manner prescribed by the Customs Code of the Customs Union as to collection of import customs duties. However, the specifics of payment (collection), crediting, distribution and return of special safeguard, antidumping and countervailing duties are specified in Article 28.1 of the Agreement on Application of Special Safeguard, Antidumping and Countervailing Measures against Third Countries dated January 25, 2008.
Non-payment or underpayment of customs duties and taxes in due time, as established by the Customs Code of the Customs Union, the penalty shall be paid. The procedure for calculation, payment, collection and return of penalties shall be established by the legislation of the Member State of the Customs Union, the customs authority of which collects customs duties, taxes and penalties.
In case of deferral or installment payment of customs duties, the interests shall be charged, according to the legislation of the Member States of the Customs Union, against the amount of the deferred or installment customs duty for the period starting from the date following the date of release of goods and ending with the date of termination of the obligation to pay customs duties.
Customs value of goodsThe customs value of imported goods shall be determined according to the methods of calculation of the customs value, as established by the Agreement on Calculation of the Customs Value of Goods Crossing the Customs Border of the Customs Union dated January 25, 2008.
The customs value of imported goods shall be declared by the declarant during declaration of goods before the customs authority. The procedure for declaration of the customs value of imported goods, as well as the form of declaration of the customs value and rules for filling thereof are established by Resolution No. 376 “On the Procedures for Declaration, Control and Adjustment of the Customs Value of Goods” of Commission of the Customs Union dated 20.09.2010.
The customs value of goods shall be controlled by the customs authority according to the Procedure for Control of the Customs Value of Goods approved by Resolution No. 376 “On the Procedures for Declaration, Control and Adjustment of the Customs Value of Goods” of Commission of the Customs Union dated 20.09.2010."
Based on the results of control of the customs value of goods by the customs authority, the decision shall be made on validation of the declared customs value of goods or on adjustment of the declared customs value of goods.
In case if the customs authority, during control of the customs value of goods prior to their release, reveals the signs indicating that the information on the customs value of goods may be inaccurate or the declared information is not validated as appropriate, the customs authority shall perform an additional inspection according to Article 69 of the Customs Code of the Customs Union.
The customs value of goods exported from the customs territory of the Customs Union shall be calculated according to the legislation of the Member State of the Customs Union, the customs authority of which receives the customs declaration of goods.
Country of origin of goods
The country of origin of goods shall be determined for application of tariff and non-tariff measures of regulation of import of foreign goods into the customs territory of the Customs Union and export of goods from the customs territory of the Customs Union, as well as for inclusion of goods in the foreign trade statistics.
The country of origin of goods shall be determined in all cases when the application of customs tariff and non-tariff regulation measures depends on the country of origin of goods. The basic provisions on the country of origin of goods are specified in Chapter 7 of the Customs Code of the Customs Union. As such, according to clause 1 of Article 58 of the Customs Code of the Customs Union, the country of origin of goods is a country in which the goods were fully produced or sufficiently processed (treated) according to the criteria established by the customs legislation of the Customs Union.
The rules of Determination of the Country of Origin of Goods, as specified in the Agreement on the Unified Rules of Determination of the Country of Origin of Goods dated January 25, 2008, shall apply in the common customs territory of the Member States of the Customs Union in respect of goods originating in third countries.
Goods originating from developing and the least developed countries, as well as from countries that executed the free trade agreements with all Member States of the Customs Union, are excluded from this statement.
Thus, in respect of goods originating from developing and the least developed countries, the rules of determination of the country of origin of goods are established by the Agreement on the Rules of Determination of the Country of Origin of Goods from among Developing and Least Developed Countries dated December 12, 2008.
In turn, in respect of goods originating from countries that executed the free trade agreements with all member states of the Customs Union, the rules for determination of the country of origin of goods shall be established by the agreement. These agreements include, for example, the Agreement on the Free Trade Zone dated October 18, 2011 and the Agreement on the Rules of Determination of the Country of Origin of Goods in the Commonwealth of Independent States, executed by the governments of the member states of the CIS on 20.11.2009.
Documents certifying the country of origin of goods shall be submitted according to Article 62 of the Customs Code of the Customs Union, if the country of origin of goods has tariff preferences in the territory of the Customs Union. These documents include, for example, the certificate of origin of goods and the declaration of origin of goods.
However, in the following cases it is not required to submit a document confirming the country of origin of goods:
1) if imported goods are declared as part of the customs procedure of customs transit or the customs procedure of temporary import and are exempted from all customs duties and taxes, except when the customs authority reveals the signs indicating that the country of origin of goods is a country the goods of which are prohibited for import into the customs territory of the Customs Union or for transit through its territory according to the customs legislation of the Customs Union or the legislation of the Member States of the Customs Union;
2) if goods are transported across the customs border by individuals according to Chapter 49 of this Code;
3) if the total customs value of goods crossing the customs border and sent at the same time, in the same way and by the same consignor to the same consignee does not exceed the amount specified by the Commission of the Customs Union (Resolution No. 254 “On the Customs Value of Goods Crossing the Customs Border of the Customs Union and Not Subject to the Submission of a Document Confirming the Country of Origin of Goods” of the Commission of the Customs Union dated 20.05.2010);
4) in other cases stipulated by the customs legislation of the Customs Union.
