Vemina Aviaprestige vs. Sheremetyevo Customs: Goltsblat BLP lawyers have successfully argued, at the Presidium of the Supreme Arbitration Court of the Russian Federation, that customs offences may be insignificant

13.02.2013

This will also affect other administrative offences.

Goltsblat BLP lawyers have won a dispute in the Supreme Arbitration Court of the Russian Federation after Vemina Aviaprestige - a major corporate designer of VIP plane interiors - was held administratively liable under part 3, article 16.19 of the Code of Administrative Offences of the Russian Federation for a failure to complete required customs procedures in due time.

The supervisory appeal to the Supreme Arbitration Court of the Russian Federation followed a decision of the Federal Arbitration Court for the Moscow Circuit, which held that the concept of insignificance could not, in principle, be applied to customs offences. Before GBLP successfully argued for a new precedent with this decision of the Presidium of the Supreme Arbitration Court of the Russian Federation, it was extremely difficult to secure release from liability for insignificant offences in economic disputes.  We now anticipate an abrupt change in judicial practice.

The circumstances of the case saw Vemina Aviaprestige held liable for being a week late in filing its customs declaration as part of a temporary export procedure, even though the actual goods had already been returned to the customs territory of the Russian Federation, meaning that were no threats whatsoever to the interests of the Russian Federation. The declarant was fined more than 350,000 roubles.

The courts of the first two instances recognised that the offence was insignificant and agreed decision to hold the declarant liable was unlawful. In contrast, the Federal Arbitration Court for the Moscow Circuit overruled the judicial acts, determining that this offence could not be insignificant since it “breached the customs regulation procedure for clearance of goods through customs and exercise of customs control over them”.  This completely precluded any possibility of a release from liability for any violations of customs formalities to reflect their insignificance.

The principled stand taken by the Presidium of the Supreme Arbitration Court of the Russian Federation will now allow courts to release companies from administrative liability much more frequently, without fearing that their decisions might be overruled by higher courts; not only in relations to customs, but also, we believe, in other business and administrative areas.

In this dispute, the client was represented by Irina Malikova, Customs and International Trade lawyer at Goltsblat BLP.

Vladimir Tchikine, Partner, Customs and International Trade, Goltsblat BLP, said the implications of the decision will be far-reaching: "This case was very interesting for the GBLP team, since we knew that the case would influence subsequent judicial practice. Irina Malikova, the associate from our practice who represented Vemina Aviaprestige in court, had the difficult task of protecting the client's interests even though their actions did, formally, constitute the imputed offence, and despite the existing judicial practice.  Yet we managed to achieve this and now we hope that this decision will be beneficial to many other companies.”

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