Overview of the Fourth Customs Practitioners' Conference

The best way to consolidate knowledge is repetition. Especially when one day of the conference is so rich in knowledge that, as one participant in the conference joked, “it doesn't fit in your head anymore.” So, we invite you to recall the topics and some of their aspects discussed at the 4th Customs Practitioners Conference in June.

We also provide links to the conference records available for purchase (members of the Customs Practitioners Association are free of charge, see the benefits and conditions of membership) [1] and articles published by some speakers after the conference.

Please note that the Customs Practitioners Association is preparing for the 5th Customs Practitioners Conference, which will take place on 2 December in Kaunas and online. We invite you to propose topics, raise questions and, of course, participate! More information will be published soon in www.lcpa.lt, contacts: info@lcpa.lt

DECLARATION OF LOW-VALUE CONSIGNMENTS FROM THE 1ST OF JULY - THE SUBJECT OF THE FIRST PART, VIDEO

The first part was started by Lina Petronienė, Rugilė Andziukevičiūtė, and Milda Stravinské, representatives of three associations - Express Parcel Carriers, Transport Innovation, and Customs Practitioners, sharing their thoughts on what could have been done better in preparation for the change. Most of the observations were made on electronic systems: the delays in the development of IT specifications and frequent changes; there was a lack of business involvement in the process of developing customs IT systems and in reviewing procedures and innovating; electronic declaration could have started well before the abolition of the import preference, thus allowing businesses to adapt properly, and prepare for the abolition of the preference.

It was emphasized that a broader approach of public authorities is necessary, assessing what Lithuania can gain due to increasing trade flows through Lithuania. Representatives of the associations, while reviewing the ideas expressed at the conference, prepared an article  “Changes in the declaration of low-value consignments and prospects for cooperation with customs.”

Justas Dukavičius, a representative of the Customs Department, looked at how natural persons themselves, without the assistance of a customs broker, will be able to declare consignments with a customs value not exceeding EUR 1000 and a gross weight not exceeding 1000 kg [2].

This part was completed by Dainora Rinkevičienė, a co-founder of MB Two Wheels Empire, who shared her experience of how the company involved in e-commerce of electric bikes and their parts, with 50% of sales in the UK, was preparing for Brexit and what helped to prepare. The speaker pointed out that regular business training in the United Kingdom, prompt answers to questions, and the aspiration to simplify procedures as much as possible were and remain significant, as the example, the speaker presented the receipt of the EORI code, which was straightforward in the United Kingdom and lasted only a few hours while Lithuania was experiencing difficulties.

TRANSACTION PRICING AND CUSTOMS VALUE – THE SECOND PART, VIDEO

Jovita Mikšienė, a representative of the Customs Department, pointed out that currently, transaction pricing is more important than ever for international companies, as the number of international companies is increasing and more international transactions are carried out between related parties, i.e., between the parent and subsidiary company or between several subsidiaries located in different countries. Such transactions represent a major proportion of world trade and the price paid by the related companies to each other has a direct impact on the determination of customs value. The speaker overviewed what transaction pricing is, what the possible customs actions are on transaction pricing adjustments, the legal basis, and the case law.

Vaidė Riškutė, a representative of the State Tax Inspectorate, pointed out that the determination of the value of goods for tax and customs purposes has both differences and similarities. Most importantly, the value of the goods for both of these purposes should be determined as if they were between unrelated parties (so-called the arm’s length principle). The speaker reviewed the documentation requirements for controlled transactions, how the STI identifies risks and what measures it applies, how the valuation of a controlled transaction is performed, what pricing methods are used, and more aspects.

Monika Bielskienė, attorney-at-law of APB WALLESS, presented a practical example of how one owner sets up companies in different countries – Lithuania and Belarus. Tractors are manufactured in Lithuania, and engines are manufactured in Belarus. As the owner is the same for both companies, no price negotiations take place, and after estimating the market price, the price of engines is set at EUR 5000. When preparing documentation of a controlled transaction, it becomes clear that according to the arm's length principle, the price may be EUR 4000. Can the company adjust the prices of already imported engines on this basis and recover the taxes paid? In reply to the question, the speaker pointed out the complexity of the process and the differences between the institutions' objectives: it is in the interest of the customs authorities to not reduce the price, since the level of import taxes depends in many cases on the customs value of the goods and the STI on the price being not increased, as this increases the cost of the company and reduces the amount of the income tax paid. It was also reviewed how these different objectives are combined.

Aušra Bieliūnienė, a representative of UAB Thermo Fisher Scientific Baltics, a guest of the discussion, raised the question of whether the documentation of each consignment should be collected annually and the data for the customs value adjustment should be re-specified when most information is already in the institutions' systems and can be used for this purpose.

PHYTOSANITARY AND VETERINARY REQUIREMENTS IN THE LIGHT OF BREXIT – THE THIRD PART

Vilma Mikelaitienė, a representative of the State Plant Service, reviewed phytosanitary requirements for controlling imported or transiting plant production and export requirements to the UK (after BREXIT). The speaker emphasized the importance of controlling wood packaging material (WPM), which could spread harmful organisms.

On this subject, the speaker also prepared an article “Why is it important to control wood packaging material?”, reviewing a number of events and their consequences. For example, the outbreak of Anoplophora glabripennis was first identified in Germany in 2014; but even today the country is fighting this pest in an attempt to recover areas from its clutches. Harmful organisms do not choose - parks, private gardens, their own backyard with aerated vegetation, or forest. When they enter the country, and under the right conditions, pests spread very quickly, and it is extremely difficult to eradicate them. The fight against already existing pests causes severe economic, emotional damage by cutting down and destroying all trees that are infected, regardless of where they grow and the value they have.

Jolita Mačiulytė, a representative of the State Food and Veterinary Service reviewed the control exercised by the Service in the event of export, noted the peculiarities of trade with the United Kingdom that the UK does not use TRACES and has established transitional periods for the application of the requirements (the additional requirements will come into force on 10 October this year and on 2022.01.01). She also discussed import innovations - the new forms of veterinary certificates were approved this year, emphasizing that the old form will expire in October of this year. The speaker paid particular attention to the changed and highly tumultuous control of composite products (products for human consumption containing processed animal and plant products such as pizza, cakes, mayonnaise). At the end of the presentation, she invited the audience to ask the Service questions and, after the conference, provided additional information in the article “State Food and Veterinary Office: responses to inquiries and their importance for business.”

THE FOURTH PART – TRENDS IN INFRINGEMENTS AND OTHER AREAS, VIDEO

Ingrida Beliokienė, a representative of the Customs Department, presented a report on tariff quotas, reviewed legal regulation, administration of tariff quotas in customs, and the peculiarities of the application of some popular quotas, for example, due to the relatively complicated regulation of the quotas applied to steel products, which has been a major issue for business over the last three years. After the conference, the speaker also shared her knowledge in articles: “Tariff priority quotas – what is to be known to business” and “Tariff-rate quotas for steel products: peculiarities of the application." The speaker's recommendation to importers: to regularly and thoroughly monitor the relevant information on tariff quotas published and updated daily on the websites of Lithuania and the European Commission, as tariff quotas for certain categories of steel products are used up on the first day of their application.

Dr. Gediminas Valantiejus, attorney-at-law, reviewed in his report how the most recent case law defines the limits of a declarant's liability, i.e., what can be held administratively liable for breaches of customs legislation [3]. In conclusion, the speaker pointed out that the inaccurate data contained in the declaration should not in itself be regarded as an appropriate basis for the emergence of administrative responsibility and that the customs authorities must determine how these inaccuracies occurred or whether they were the result of incorrect information provided by third parties, which the declarant himself is not in a position to verify.

Jonas Sakalauskas, attorney-at-law APB AAA Law, presented a report on import risks and noted that when purchasing goods in third countries,  their price, quality, and transportation are taken care of, but it is often forgotten to assess import risks, such as the origin of goods and anti-dumping duties. The speaker presented the real situation and the lessons learned while dealing with it.

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[1] The Conference recording: https://www.customsclearance.net/lt/learning-paths/4-toji-muitines-praktiku-konferencija-2021-06-17

[2] Those who want to deepen their knowledge on this topic can additionally listen to the video training “Self-declaration of small consignments” prepared after the conference: https://www.customsclearance.net/lt/courses/smulkiu-siuntu-savarankiskas-deklaravimas

[3] Dr. Gediminas Valantiejus has prepared a comprehensive training on administrative responsibility “Administrative responsibility for breaches of customs legislation”: https://www.customsclearance.net/lt/learning-paths/administracine-atsakomybe-uz-muitu-teises-aktu-pazeidimus-2