Customs officers tend to interpret regulations conservatively. Can we change their point of view?

Customs officers tend to interpret regulations conservatively. Can we change their point of view?

 

It is possible that provisions of regulations are not specific enough to give only one answer to an issue. In such a situation, Customs officers tend to interpret regulations conservatively, imposing fines, collecting duties, denying preferential treatments, etc.

 

If you think their point of view is not reasonable, what can you do?

 

The first thing to consider is asking the authority that implements the relevant Class Ⅱ law how to interpret the provision in question and apply it to a real case.  Usually, the authority is at the ministerial level of the Korean government organization.

It is easy to find the relevant authority. Because the information about who is in charge and the contact number is indicated under the law name when you find it on the Korean Law Information Center website (https://www.law.go.kr/).

 

The authority tends to be more objective than Customs. If the authority interprets the relevant provision in a way that you agree, your problem may be resolved without filing an appeal by receiving an official interpretation from the authority.

 

However, if the authority thinks in a way that Customs agrees with, you should be determined to go to the Supreme Court to change the interpretation. Because if the lower court rules in your favor, Customs may file an appeal to the higher court.

 

One of the well-known cases of this kind is 2015두56120. To make a long story short, when importing the relevant goods, a favorable FTA tariff rate had been applied, which turned out to be inappropriate. Customs collected deficient duties (Customs Value X (MFN tariff rate – FTA tariff rate)) along with additional duties. However, duty reduction could have been applied to the imported goods. As an application for reduction or exemption of custom duties may be filed within 5 days after the relevant notice of payment is served, according to Article 112 (2) 1 of the ENFORCEMENT DECRESS OF THE CUSTOMS ACT, the importer filed the application and received the collected duties back. However, Customs did not refund the collected additional duties, stating that additional taxes may be levied and collected independently. The importer filed appeals, and finally the Supreme Court ruled that when there are no taxes to be paid, there are no additional taxes to be paid either.

 

Once the Supreme Court ruling is made, Customs practices are adjusted accordingly. After the ruling, we don’t have to argue with Customs to get the refund of additional duties when duty exemption applies after the deficient duty collection.

 

It takes long to receive the Supreme Court ruling and accompanied cost could be huge. If you don’t want to take such a burden, you can at least ask the authority free of charge how to interpret and apply the obscure provision.