Courts re-emphasise that ultimate responsibility lies with the Importer to prove their origin statements are correct.
Two recent court rulings have reasserted the position that importers must bear the ultimate responsibility for the declared origin of their goods even though the customs authorities at the country of export have issued incorrect certificates of origin.
In the UK Tribunal Case of Manor Park Trading (TC00760), an importer tried to argue that certificates of origin that stated that their imported products had originated in the United Arab Emirates (UAE) rather than Pakistan had been issued by the authorities in the UAE and the importer had thus acted in good faith when their goods were declared to have originated there rather than in Pakistan (and thus avoid anti-dumping duty (ADD) on identical products from Pakistan). The importer had suggested that they had done everything within their means to ensure compliance with their customs obligations and that the error on behalf of the customs authorities in the UAE thus absolved them of responsibility as well as of their obligation to pay ADD.
In the European Court of Justice (ECJ) case of HIT Trading (Case T-191/09), an importer had been benefitting from a preferential rate of duty on products that were declared to originate in Pakistan but in fact originated in China and thus also attracted ADD. In this case the appellants’ legal team threw the proverbial kitchen sink at the case only for each and every argument to be dismissed by the ECJ. They tried to argue that they had acted in good faith and that the Pakistani customs authority had made the mistake and not them (as per Manor Park), they tried to argue that the European Commission had failed to give sufficient notice about concerns about ADD circumvention form identical products manufactured in China and also that the Dutch Customs Authorities had erred in accepting the customs declarations without examining them thoroughly enough and that all the errors combined would absolve HIT of responsibility and liability for the ADD at issue.
Both courts rejected the arguments put forward by Manor Park and HIT. In order for an importer to be held to have acted in ‘good faith’ and thus be absolved of responsibility and liability they must meet an extremely high burden of proof. It is not enough to simply argue that the exporting authorities made an error- the error must be one that the importer could not have “reasonably detected.” It isn’t enough to argue that there wasn’t sufficient notice of an issue- the importer is required to actively monitor the EC Official Journal. It isn’t enough to argue that an importer raised an issue- it has to see the issue through as far as it can (be it by raising the issue with its suppliers or with the relevant customs authorities (import and export) and/or seeking a Binding Origin Information (BOI) ruling.)
The Rules of Origin are one of the most controversial and complicated areas of EU Customs Law and time and again importers are falling foul of the legislation and/or being caught out by certificates that have been issued in error by the authorities in the country of export. We recommend that importers determine the level of benefit they enjoy form the use of preferential trade agreements. If the savings are materially significant then it would be prudent to take the necessary steps to protect this benefit from the risk of retrospective demands.
If you are unsure as to the origin of your products, International Trade Solutions has developed a number of solutions to assist clients in the area of customs origin. For more information or to arrange a free first consultation meeting contact us on (01905) 619229 or email us at firstname.lastname@example.org