Appeals against decisions of the customs authorities

Right of appeal in two steps

If you disagree with a decision of the customs authorities,  which concerns you directly and individually,  you may lodge an appeal against it. The “right of appeal” is laid down in Article 44 UCC, which provides: ‘Any person shall have the right to appeal against any decision taken by the customs authorities relating to the application of the customs legislation which concerns him or her directly and individually’’.

The right of appeal may be exercised in at least two steps. The Member States are required by EU customs legislation to provide, at a minimum, a two-steps appeal procedure:

• initially, before the customs authorities. This involves a reconsideration of the contested decision; and,   
• subsequently, a second step at a higher independent body (either a court or an equivalent specialized body).

Moreover, the UCC dictates that the Member States must ensure that the appeals procedure enables a prompt confirmation or correction of decisions taken by the customs authorities. The right of appeal has to be exercised in the Member State where the decision was taken or was applied for.

The details of the appeals procedure itself, including objection and appeal periods,  are left to Member States' national law.  Moreover, EU customs law also opens up the right of appeal in the event that a person has submitted a request for a decision to the customs authorities and that decision is not taken (on time) within the time-limits referred specified in the UCC.

The right of appeal in the Netherlands

The appeal procedure has been further elaborated in Dutch (customs) legislation in, among other things, the chapters 6, 7 and 8 of the General Administrative Law Act and chapter 8 of the General Customs Act.. In the Netherlands, we the first step of the appeals procedure is called  "objection" (in Dutch: bezwaar). In the second step of the appeals procedure the district court of North Holland, located in Haarlem, is involved as independent body. This district court has a specialized chamber dedicated to customs cases.  

Customs decisions subject to appeal

When customs issues an adverse decision, the interested person who is directly and individually affected by that decision may lodge an appeal against it. Examples of adverse decisions in customs practice that can be challenged are:

• a notification of a(n) (additional customs debt (either imposed in the primary customs declaration process or by way of a post-clearance recovery);
• a decision on the application for a customs authorization that is not granted to the interested person or is not granted under the desired conditions;
• a decision to revoke a customs authorization;
• a decision on a BOI or BTI application that is not granted for the desired tariff classification or origin;
• an adverse decision on an application for repayment or remission.

Preliminary notice of the adverse decision

Before the customs authorities take a decision adversely affecting the applicant, they are required by Article 22 paragraph 6 of the UCC to communicate the proposed decision and the grounds on which they intend to base that decision.  This is the codification of the EU law principle that the rights of the defense must be respected as developed in the case law of the Court of Justice of the EU under the customs legislation in force until 1 May 2016. The interested person must be given the opportunity to express its views on the intended decision. As a rule, the interested party is given 30 days to do so. 

It is advisable to use of the right to respond, if needed with the support of an attorney specialized in customs matters. By responding, the interested person can put forward an early defense before the customs authorities have actually taken a final decision and the customs authorities may still want to waive the unfavorable decision. In the preliminary procedure it is often also possible to inspect the documents on which the intention is based and to have a discussion with customs.

The requirement that the customs authorities must send a pre-notification prior to a decision that adversely affects the interested person, equally applies to decisions taken by the customs authorities without a prior application (see Article 29 of the UCC).

Step 1: objection procedure with the customs authorities

If the customs authorities decide to take an unfavorable decision, a formal appeal may be lodged within 6 weeks in the Netherlands. It is important to carefully review the decision.

If the interested person wishes to challenge a notification of a customs debt, then besides the right of appeal , EU customs legislation also provides for a different procedure, namely an application for repayment or remission of the duties.  

In respect of tax assessments, always consider timely requesting for deferment of the payment obligation. The term of payment in respect of customs debts is 10 days and lodging an appeal does not (automatically) suspend the payment obligation. Article 45 of the UCC provides that the submission of an appeal shall not cause implementation of the disputed decision to be suspended.

In practice the objection procedure at customs is reasonably flexible. After the interested person has substantiated the grounds of its objection, customs will first render a provisional consideration in respect of the appeal. If necessary, a hearing may take place. The interested person will be given the opportunity to respond to the report of the hearing and to the preliminary consideration as well. After that, the customs authority will  rule on the objection, a decision which, if the outcome is not positive, may be appealed as well. 

Step 2: appeal procedure before the independent specialized customs court

If the person concerned disagrees with the decision on the objection procedure, customs legislation provides for the possibility of raising an appeal with the independent specialized court within 6 weeks.

Dutch law subsequently provides for more legal remedies. After an appeal with the customs chamber of the North Holland district court, an appeal is possible with the specialized customs chamber of the Amsterdam court of appeal, and subsequently  a cassation procedure with the Dutch Supreme Court in The Hague.   The Supreme Court does not again review the facts of the case, but assesses whether the court of appeal has incorrectly applied the law.

References for preliminary rules to the EU Court of Justice

Customs law is fully harmonized at EU level. The UCC applies directly in the Member States. In  customs practice, questions regarding the validity or correct interpretation of the customs legislation are regularly referred to the Court of Justice in a so-called preliminary ruling procedure. Customs law is harmonized at EU level and ultimately the Court of Justice is exclusively authorized to rule on the validity and/or correct interpretation of provisions of EU customs law.

Litigation in customs matters

Litigation is a profession; also in customs law. Customs in general is a tough litigant who will not easily give up a position once taken. It is advisable to engage a specialized customs lawyer who is experienced in litigating against the customs authority.

The customs attorneys of Ploum's Customs, Trade & Logistics team have gained substantial experience in litigations for clients against adverse decisions of customs in appeals procedures , including in cassation proceedings at the Supreme Court and in cases where the Dutch courts referred cases to the Court of Justice for a preliminary ruling on the validity of EU customs legislation or the correct interpretation of certain provisions. Our specialized lawyers have also regularly been successful in convincing Dutch customs not to take a proposed decisions that would adversely affect our client’s legal position.

Our team also specializes in civil law proceedings that larger customs claims may give rise to  (seizures, summary proceedings, recourse and liability claims) and also in criminal cases that may arise in customs practice.   

Adverse decisions by the customs authorities (in particular substantial additional customs debts  and decisions not to grant or to revoke customs authorizations) can have an enormous impact on the (financial) position, reputation and continuity of businesses. Ploum can advise you on this, but of course we are also committed to limiting the damage once the risks have materialized.