The Supreme Court has determined conditions of liability under customs regulations

Conditions of liability under customs regulations

If the customs authority reclassifies the goods code under the Ukrainian Classification of Goods for Foreign Economic Activity (UCG FEA code) or changes the customs value of goods it has negative consequences not only for the company, but also leads to the its officials liability. In particular, the customs authority decides in such cases that during the customs clearance of goods the Director (or other official) of the company has committed intentional actions aimed at reducing customs duties.


The Supreme Court analysed the legitimacy of such approach of the customs authority and determined the conditions under which the officials can be liable for the customs regulation’s violation. In particular, the court concluded the following:

  • the fact of incorrect indication of the product UCG FEA code itself does not constitute an offense under the Article 485 of the Customs Code of Ukraine;
  • fines and other sanctions for non-payment of customs duties, and for other violations related to  incorrect classification of goods are applied by the customs authorities exceptionally if the decision of the customs authorities to reclassify these goods was made on the basis of the fake documents submitted by the applicant, of false information provided by him and/or as a result of the applicant's failure to provide all the information available to him, which significantly affected the result of the decision;
  • one on the customs authorities functions is to control the correctness of the declarant's determination of the UCG FEA code and the legislator established responsibility for the applicant (declarant) not for incorrect declaration of a certain UCG FEA code (in such case the customs authorities determine the product code by itself), but for the declaration of false information in the customs declaration, that is determination of the UCG FEA code, i.e. inaccurate data (information), which is taken into account during its classification to a particular UCG FEA code.

Given the fact that the customs authority did not provide sufficient evidences to confirm the plaintiff's intent to understate customs duties by reporting inaccurate information about the goods, the Supreme Court upheld illegal and cancelled the decision of the customs authority re violation of customs rules.

More details can be found in the Judgement of the Supreme Court as of 18 March 2021 in the case № 760/14721/16-a

How can KPMG help in customs matters?

  1. To prepare a strategy how to protect the rights of officials of the company, whom the customs authority is trying to illegally bring to liability for intentional actions aimed at reducing the amount of customs duties.
  2. To represent the company's interests during disputes with customs authorities (pre-trial and/or court appeals) re illegal reclassification of the goods UCG FEA code, adjustment of the customs value of the goods, etc.
  3. To determine the risks of potential disputes with the customs authorities and provide practical advice on their prevention. 

© 2024 KPMG. KPMG refers Limited Liability Company “KPMG Ukraine” and/or Private Joint-Stock company "KPMG Audit" and/or ATTORNEYS ASSOCIATION ''KPMG LAW UKRAINE'', companies incorporated under the Laws of Ukraine, member firms of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit

Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today