PRAGNUM Secured Annulment of Customs Penalty and Dismissal of Proceedings

PRAGNUM LAW FIRM successfully represented an international agricultural machinery operator in challenging unlawful additional customs assessments. The dispute concerned the correct classification of imported machinery under the Ukrainian Classification of Goods for Foreign Economic Activity (UCGFEA).

The customs authority alleged that the goods had been declared under an incorrect UCGFEA code, purportedly resulting in an underpayment of customs duties and taxes. On this basis, the client’s representative was held liable under Article 485 of the Customs Code of Ukraine and fined.

PRAGNUM appealed the first-instance court’s ruling, building its case not only around the correct classification of the goods but, more importantly, around the absence of the essential elements of a customs offence.

The PRAGNUM team demonstrated that a disagreement between the customs authority and the declarant over the applicable UCGFEA code does not, in itself, establish that the declarant provided false information or acted with the intent to unlawfully reduce customs payments. The defence was further supported by the technical documentation for the goods, an expert opinion issued by the Kyiv Chamber of Commerce and Industry, and the prior customs clearance of similar machinery under the same UCGFEA code.

The Kyiv Court of Appeal accepted the key arguments advanced by the defence. It found that the customs authority had failed to prove that the declarant had provided false information, submitted documents containing inaccurate data, or acted with direct intent to reduce customs payments. The court also assessed the expert opinion alongside the other evidence in the case.

Outcome: The appeal was upheld, the ruling imposing liability on the client was overturned, and the proceedings were closed due to the absence of the constituent elements of a customs offence.

As a result, PRAGNUM successfully protected its client from the penalty and secured the dismissal of the proceedings.

If your business faces challenges in customs clearance or needs to challenge decisions by customs authorities, the PRAGNUM team can help assess the legal risks and develop an effective defence strategy.