Case study: Customs simplifications

Facts

The customs authority subjects a car supplier to a customs audit. The auditors discover a number of instances where goods have been incorrectly declared or classified. Infringements had already been discovered during previous customs audits. The authorities allege reckless tax evasion (§ 378 AO) and the avoidance of import duties (§ 382 of the German Fiscal Code (Abgabenordnung/AO)). Due to the alleged breach of supervisory duties under § 130 of the German Act on Administrative Irregularities (Ordnungswidrigkeitengesetz/OWiG) the authorities initiate proceedings for the imposition of a fine against the management. The company now finds itself in a difficult situation because irregularities resulting from the negligent breach of supervisory duties can be punished with fines up to €50.000.

Strategy

AWB's experts will undertake a detailed analysis of each allegation as well as any measures to prevent breaches which have already been implemented or which are awaiting implementation. They argue that there is no infringement of supervisory duties by the management since the objective criterion of § 130 (1) OWiG has not been met. Rather, the infringements identified concern working errors which could not have been prevented even if the management had exercised the greatest possible care. In  view of this, the customs authorities do not have the grounds to impose fines.

On the basis of the following points, AWB's experts prove that the company has a well-structured and effective organisation for customs processing in place:

  • The employees responsible for customs processing participate in regular training courses and submit certificates as evidence.
  • The characteristics of customs processing are laid down in working and organisational instructions.
  • Direct communication with the customs administration is ensured.
  • Operational processes are subject to regular checks.
  • Complaints are taken seriously and dealt with promptly.
  • The company has introduced all objectively required and reasonably-expected measures in order to prevent infringements of customs regulations.

Success

By drawing attention to the company's efforts to ensure that customs processing is correctly performed, AWB persuade the customs authority not to impose fines (despite repeated infringements), thereby avoiding a drawn-out appeal and court proceedings.

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