Customs law for companies

What risks do duty exemptions pose for businesses?

Commercial imports of goods into the European Union are not always subject to duties. Certain goods may be imported duty-free to the European Union without exposing businesses to risks. In many cases, this may be possible if the goods are not produced in the EU, but are in demand. For example, a tablet computer with the code number 8471 can be imported duty-free from China as well as from the US without incurring risks.

In addition, goods from certain countries of origin can be imported duty-free to the European Union without exposing businesses to risks. These are so-called preferential tariff concessions.

What is the role of developing countries?

Countries considered to be developing countries play a major role. Goods from these countries can usually be imported duty-free to the European Union without exposing businesses to risks. The reason is that the EU grants unilateral tariff concessions to countries that need them most. These tariff concessions shall make it possible for these least-developed countries to market their products in the EU – of the largest economies in the world – free of trade restrictions or duties. Goods from these countries are therefore often exempt from duties and pose little risk for companies. These least-developed countries include Bangladesh.

What risks do anti-dumping duties pose for businesses?

On the other hand, some products from certain countries are subject to anti-dumping duties in order to protect the European market.

Here is a sample calculation:

A bicycle from the US with the code number 8712 0030 is subject to the regular third-country duty rate of 14%. The same bicycle originating from Switzerland, on the contrary, can be imported duty-free to the European Union because of a preferential trade agreement that exists between Switzerland and the EU. However, if the bicycle is imported to the EU from China, it is subject to an anti-dumping duty rate of 48.5% and cannot be imported duty-free without putting businesses at risks. Bicycles from Bangladesh, on the other hand, due to its status as a developing country, can be imported duty-free.

The origin of the goods is what determines whether they are duty-free.

The same goods are therefore subject to different tariffs depending on their origin.

This results in international organized crime groups professionally forging commercial documents, in particular the information pertaining to the origin of the goods. These goods cannot be imported duty-free without exposing businesses to risks. If such fraud is detected during a customs audit, those responsible in the business may face criminal proceedings under Customs law. Then the question arises whether or not — and to what extent ¬ the importer knew or could have known that its imports were violating anti-dumping duties.

Follow customs audit procedures and avoid liability

To avoid criminal proceedings, businesses importing goods that are being offered “duty-free” should ask themselves the following questions:

• Do I know my supplier?
• Do I know my supplier’s production site?

Indications that duties are being evaded:

• The goods are not delivered directly from the country of origin, but via another country (e.g. bicycles from Bangladesh are shipped via Singapore).
• Payment for the goods is not sent to the country of origin, but to another country (e.g. the purchase price for the bicycles from Bangladesh is transferred to China).
• Is the purchase price significantly lower than the price charged by competitors?

What is the purpose of a voluntary disclosure?

If you suspect that goods have been imported duty-free involving, and entailing risks for the business you should immediately file a voluntary disclosure. This is the only way to guarantee that those involved obtain immunity from prosecution. An effective voluntary disclosure not only protects you from substantial penalties, but also from being held liable for unpaid customs duties.

I will assist you rapidly on all questions pertaining to violations of anti-dumping duties in a results-oriented manner. In doing so, protecting the personal liability of the employee responsible within the company is a central component of my advisory services. Furthermore, I will advise you up-front of the regulations pertaining to importing goods duty-free and without risk.