DEFENSE AGAINST CHARGES OF EVASION OF IMPORT DUTIES AND EXCISE TAXES
Defense in customs criminal law and excise criminal law
Import and export duties (in particular customs duties) are treated in the same way as taxes pursuant to Section 3 (3) of the German Fiscal Code (AO). Customs evasion is therefore punishable in the same way as tax evasion under Section 370 AO (cf. also the definition in Section 369 (1) sentence 1 AO).
In addition, the special rules of customs criminal law relating to the breach of the ban, smuggling on a commercial basis, forcible smuggling and gang smuggling, and tax evasion (Sections 372-374 AO) are also relevant. A particular problem here is that commercial evasion of import duties is quickly assumed in business dealings, which is subject to the increased range of penalties under Section 372 (1) AO. Endangering import and export duties (Section 382 AO) is only prosecuted as an administrative offense.
§ Section 370 (6) AO clarifies that customs evasion is also committed if the offense relates to import or export duties administered by another member state of the European Union or due to a member state of the European Free Trade Association or a state associated with it. (Not only) customs evasion is punishable under Section 370 (7) AO even if it is committed outside Germany. Moreover, criminal liability is independent of the law of the place of the offense. Therefore, what is only prosecuted as a misdemeanor in the country of the offense, for example, is also prosecuted as a customs offense.
In the following, you will find an overview of the central areas of defense in customs criminal proceedings and excise criminal proceedings.
Focus topics in Customs Criminal Law
Due to the amount of the anti-dumping duties and typically repeated import transactions, import duties to be collected quickly reach considerable amounts. In case of evasion of anti-dumping duties, severe fines or even imprisonment may be imposed. The non-preferential origin, the customs value and the correct classification of the goods in the Combined Nomenclature are often disputed.
Cash declaration violations
Surveillance of cross-border traffic in cash and equivalent means of payment by customs is intended to combat money laundering, terrorist financing and organized crime. However, the detection of tax crimes is likely to be at least a secondary purpose. The Customs Administration Act allows customs to intervene extensively and threatens substantial fines for numerous offenses.
Foreign trade criminal law
Violations of foreign trade criminal law can have serious legal and economic consequences. Typical violations include exporting embargoed goods, selling goods or services to sanctioned countries or persons, or exporting dual-use items. Consequences of violations of the German Foreign Trade and Payments Act include seizure of goods, confiscation of proceeds of crime and imprisonment up to 15 years.
Regularly, import VAT accounts for the majority of import duties. The unweighted average duty in the EU is around 5%, and even the reduced rate of VAT is higher. Thus, the accusation of customs evasion is often, at its core, the accusation of evasion of import VAT. The possibility of deducting input tax does not exclude tax evasion, but may play a role in intent and the assessment of penalties.
Incurrance of the customs debt
Of particular interest from the point of view of customs criminal law are the customs debts incurred under Article 79 of the Union Customs Code: "Incurrence of a customs debt in the event of an infringement". The penal provision on tax evasion is not aligned with the Union law provisions on the incurrence of customs debts, which can lead to frictions. Irrespective of criminal law consequences, the question of the debtor(s) of import duties is relevant.
Investigating authorities in customs criminal proceedings
Due to the broad range of responsibilities of the customs authorities, there are several "special departments" within the customs investigation service and the main customs offices with their criminal and fine offices. For example, the task of the Financial Control of Clandestine Employment (Finanzkontrolle Schwarzarbeit, FKS) is to combat undeclared work and illegal employment, while that of the Joint Financial Investigation Groups (Gemeinsame Finanzermittlungsgruppen, GFG) is to combat money laundering.
Refund and remission of customs duties
Sometimes import or export duties are demanded by customs authorities that are not legally owed or not owed in full. The remission or refund can subsequently correct the incorrect import duty assessment. However, remission and refund can also be the subject of tax or customs evasion, as they are tax benefits within the meaning of . § Section 370 (4) sentence 2 AO.
Customs debt and liability
Evaded import duties must be paid in arrears (and interest must be charged at a high rate). Anyone who evades import duties for the benefit of third parties or participates in such an act can be held liable for the evaded duties under Section 71 of the German Tax Code. Here, a good defense pays off twice: A reduction of the allegation of evasion regularly leads to a reduction of the tax claim or liability claim.
Legal protection against duty rulings in customs matters
There are several instruments available for correcting incorrect import duty assessments. In addition to lodging an appeal in accordance with the German Fiscal Code, it is also possible to apply for a remission or refund (see there). If the decision is negative, there is recourse to the fiscal courts (Fiscal Court, Federal Fiscal Court). Appeals are also possible against notices other than import duty notices.
The typical customs offense is smuggling, i.e. the 'sneak import' of goods. Commonly, a distinction is made between classic smuggling, intelligence smuggling and travel smuggling. From a legal point of view, these offenses are tax evasion according to § 370 of the German Fiscal Code (Abgabenordnung) and/or violations of prohibitions and restrictions, such as the German Federal Nature Conservation Act (Bundesnaturschutzgesetz), the German Medicines Act (Arzneimittelgesetz), etc.
Voluntary self disclosure in customs criminal law
Anyone who has evaded import duties can be exempted from punishment by making a voluntary declaration and subsequently paying the reduced duties. However, the voluntary declaration also exists in other areas of law related to customs law, such as foreign trade law, labor law (withholding and embezzlement of wages/undeclared work) and in the area of money laundering.
Fiscal supervision by customs
One of the main tasks of customs in excise and customs law is to secure tax revenue and monitor the movement of goods. A frequent measure is the inspection or customs inspection. Such an inspection can be the starting point of customs or excise criminal proceedings, especially if excisable products or goods have been removed from customs supervision.
Withholding wages and salaries (undeclared work)
Customs authorities (Finanzkontrolle Schwarzarbeit - FKS) perform controls pursuant to Sec. 2 of the Act to Combat Undeclared Work and Unlawful Employment. These controls often lead to criminal proceedings concerning the accusation of withholding wages and salaries (undeclared work) pursuant to Sec. 266a Penal Code.
Customs, external and preferential audit
Many customs tax proceedings have their starting point in a customs, external or preferential audit. If, during a customs audit, there are sufficient factual indications that the taxpayer has committed a criminal offense, investigations into the facts of the case may not be continued until the taxpayer has been notified of the initiation of criminal proceedings and the accused has been informed of his rights (Section 10 of the Tax Audit Regulations).
Customs criminal law is considered a matter for specialized experts. Customs law ekes out a shadowy existence among almost all lawyers as a remote subfield of tax law. The combination of this area of law, which is strongly influenced by European law, with the special field of criminal tax law leads to complex legal questions, for the answering of which a sound knowledge of all affected areas of law is indispensable.
Search and seizure in customs tax proceedings
The customs criminal investigation department often uses the surprise situation of the search for interrogation attempts that should be resisted: "Confession is good for your soul, but bad for your case." Not only defendants have the right to the presence of their criminal defense attorney, witnesses may also call in a witness counsel at any time. As a matter of principle, no statements should be made without the presence of a lawyer.
Import of Rough diamonds
Die illegale Einfuhr von Rohdiamanten ist nach dem Außenwirtschaftsgesetz strafbar. Wer Rohdiamanten in die EU einführen will, muss sicherstellen, dass die Diamanten aus einem nach dem Kimberley-Prozess zertifizierten Ausfuhrland stammen und dass das erforderliche Zertifikat vorliegt. Darüber hinaus müssen die erforderlichen Zoll- und Steuervorschriften eingehalten und alle notwendigen Unterlagen und Genehmigungen vorgelegt werden.
Harmonized System and Customs Tariff
The classification of goods is of decisive importance for the amount of import duties, the applicability of anti-dumping and countervailing duties, and much more. Incorrect information leads to incorrect assessments and possibly to the realization of the objective fact of tax evasion. The European Customs Tariff is based on the Combined Nomenclature, which in turn is based on the Harmonized System. The Harmonized System is the basis of the customs tariffs of over 200 customs administrations worldwide.