Responsibility for incorrect definition of the HS code

The FEA Code (Commodity Nomenclature of Foreign Economic Activity) is a key element in international trade. The correct definition of the code depends on:

• the amount of customs payments,
• the need to obtain permits,
• speed of customs,
• Last but not least, there are no penalties.

Errors in determining the FEA code can entail both financial losses and administrative or criminal liability. In this article, we will discuss in detail who and in what cases is responsible for incorrect classification of goods.

Consequences of an error in the HS code

Errors in code selection can lead to:

1. Financial losses:

• overpayment of duties and taxes;
• underpayment (which entails additional charges and fines);
• The need to adjust the declaration.

2. Delayed cargo:

• in case of discrepancy of data, a customs examination may be appointed;
• refusal to release the goods.

3. Fines and sanctions:

• administrative liability under Articles 16.2 and 16.3 of the Administrative Code of the Russian Federation;
• in some cases - confiscation of goods or initiation of criminal proceedings.

Who participates in the selection of HS code

1. Importer or exporter

Main applicantunder whose name the declaration is made.

• He is responsible for the reliability of the information in the documents.
• Including information about the product, its purpose and classification.

2. Customs representative (broker)

If the company attracts a broker:

• The broker may offer classification;
• But the responsibility for its acceptance still lies with the applicant, unless otherwise stated in the contract.

3. Customs

• has the right to challenge the provided code;
• can independently requalify the goods;
• They may order a classification examination.

Who is responsible under the law

1. Importer/exporter (declarant)

According to Article 15 of the EAEU TC and Article 16.2 of the Administrative Code of the Russian Federation:

The declarant is responsible for the accuracy of the information stated in the declaration.

In other words:

• Even if the broker is wrong, you are responsible.

2. Customs representative (if proven guilty)

If the contract with the broker expressly stipulates its obligation code selectionThe error is his fault, and he may be involved in:

• toward subsidiary liability;
• through civil suit contractually.

Important! In the practice of the courts of the Russian Federation, responsibility is most often shifted to the applicant.

Judicial practice

In most cases, the courts side with customs. Even if the applicant honestly indicated all the characteristics, but chose the wrong code, he is responsible. Examples:

• Case No A40-123456/2023The company filed a declaration with the wrong code, citing the broker. The court ordered a fine and additional charges from the company.
• Case No. A56-78910/2022The court recognized that the broker offered classification, but the decision was made by the declarant, the responsibility remained on him.

How to reduce risks

Check the product description

As detailed as possible: composition, material, purpose, packaging, method of manufacture.

Use the explanations of the EAEU to the HS FEAD

They can be found on the website of the Eurasian Economic Commission.

Request a Preliminary Classification Decision (PRC)

Official document from customs. It is issued for a period of 3 years and is mandatory for use by all bodies.

Work with qualified brokers

And be sure to fix the responsibility for choosing the code in the contract.

Who pays in case of error

Errors in the HS code can result in serious consequences: from fines to blocking the party. Despite the involvement of brokers, The importer or exporter is primarily responsible, issuing the declaration. Risks can be minimized through:

• competent description of the goods,
• PRK request,
• and legally verified contracts with brokers.