Customs Criminal Law: Components
Customs criminal law can be understood as a particular offence area of criminal law, which essentially relates to criminal tax offences, which is why it can also be titled “special criminal tax law“. Such customs offences are distinguished from the less strict customs regulatory offences, such as tax jeopardy under § 380 German Fiscal Code (AO) or reckless tax evasion under § 378 AO. However, even in the case of customs offences, there is already the threat of severe fines. For example, §§ 30, 130 of the German Administrative Offences Act (OWiG) opens up the real possibility of sanctioning a company with a fine of up to ten million euros in the case of a deliberate violation insofar as the provision violated does not stipulate a different maximum.
Customs offences are defined under § 369 (1) no. 1 AO as punishable offences under German tax laws. Therefore, the most important provision is tax evasion (§ 370 AO), which is accordingly also punishable as customs evasion. In addition, the German Fiscal Code stipulates other specific customs offences, of which the breach of the ban (§ 372 AO), smuggling (§ 373 AO) and tax evasion (§ 374 AO) are of particular practical importance. In commercial transactions, the main problem is that evasion of import duties is quickly assumed to be commercial, which leads to an increased range of penalties.
Despite the international and thus cross-border reference, there are no uniform EU law regulations on criminal liability, so German criminal law, in particular the German Fiscal Code (Abgabenordnung), applies. On the other hand, customs duties and the requirements associated with the transfer of goods are regulated by EU law, namely the Union Customs Code (in short: CCC, through Regulation [EU] 952/2013). Often overlaps with other offence areas are possible, particularly with narcotics and medicinal products criminal law, if, for example, anabolic steroids or other medicines or narcotics are acquired abroad, imported into Germany and discovered by customs when crossing the border.
In the case of private individuals, smuggling in travel, non-declaration of cash (from 10,000 EUR), and irregularities in handling goods subject to excise duty (especially improper use) are of practical importance. In the case of commercially active companies, on the other hand, the focus is on commercial smuggling (§ 373 AO) and customs evasion (§ 370 AO). In addition, problems can arise that may be accompanied by serious economic losses, for example, if an entire shipping container is seized during a customs inspection, but only a part of the goods may not have been appropriately declared or may infringe intellectual property rights (especially trademark and product piracy).
The public prosecutor’s offices rarely become active in customs criminal law matters, as special investigating authorities have been set up for this purpose. These authorities include the Customs Criminal Investigation Office based in Cologne, the eight Customs Investigation Offices (Berlin, Dresden, Essen, Frankfurt a.M., Hamburg, Hanover, Münster and Stuttgart) and a total of 41 main customs offices. The respective responsibilities arise from various laws. Criminal investigations are carried out by the main customs offices and the customs investigation offices.
If these authorities become active, they have the same legal powers as the public prosecutor’s office. Of particular relevance is searching business premises and companies by the customs investigation office. The right to search is derived from the general provision of § 102 German Criminal Procedure Code. A search of a suspect is permissible if there is an initial suspicion of a criminal offence based on a court order. Additionally, the customs investigation is authorised to inspect and seize documents relevant under customs law under § 404 AO.
The criminal penalties in customs proceedings are often significantly higher than in “simple” criminal tax proceedings. In addition, the possible secondary consequences should not be underestimated. For example, a conviction under criminal tax law can considerably impact authorisations and permits under customs law, as these are regularly dependent on personal conditions that are affected by a conviction. Depending on the affiliation of the convicted person to a particular professional group, the authorities may also threaten further consequences under professional or disciplinary law.
Since customs evasion is treated in the same way as general tax evasion and is therefore treated in the same way, there is also the possibility of a penalty-exempt voluntary declaration in accordance with§ 371 AO. This is a personal ground for the annulment of a sentence, which does not extend to third parties. Moreover, it only applies to tax or customs evasion. On the other hand, it is not applicable to offences under §§ 372 and 373 AO (breach of the ban, smuggling), nor to other offences that were additionally committed in connection with customs evasion, such as document offences or offences against the BtMG.
The exempting self-disclosure essentially has three prerequisites:
- Declaration of correction,
- timely payment of arrears, and
- Non-occurrence of a blocking reason (e.g. declaration too late).
If these prerequisites are met, the result is – as already follows from the name – an exemption from punishment. If a self-disclosure is made but fails, for example because there is a reason for blocking, it is usually taken into account as a mitigating factor. However, this does not affect the assessment of the tax debt and the claim as a liable debtor, which must be decided in a separate taxation procedure. This is because evaded taxes are subject to interest of 0.5% for each full month pursuant to §§ 235, 238 AO, without being tax deductible. In addition, there is in principle also the possibility of liability in kind pursuant to § 76 AO to secure the claim. This liability is comparable to a lien on property.
If you would like to know more about the exemption from prosecution, read our separate article on this topic, in which we go into detail about the requirements, possible grounds for blocking and conceivable problems.
Legal Protection against Customs Notices
The import and export duties to be paid are determined by the competent authority in a customs notification, an administrative act. In addition, there are also notices of excise duties, which are not import duties. Such customs notices are tax notices within the meaning of § 155 (1) AO in conjunction with § 3 (3) AO.
Once again, there is no standardised procedure for taking legal action against such a notice. Instead, § 44 of the Union Customs Code refers to the national provisions in the respective Member State for the appeal procedure. German law regulates the appeal procedure against a tax assessment notice in §§ 347 ff. AO. According to this, an objection is the legal remedy that may be lodged against a customs assessment. The competent authority for deciding on the objection is the authority responsible under national law; in Germany, this is the main customs office, which is considered as the tax office under the Fiscal Code.
For an objection to have a chance of success, the complainant must claim to be adversely affected by the decision. If the addressee files the objection themselves, this complaint already results from the assessment itself, so that a separate statement of reasons is usually unnecessary. However, it is also essential that the objection relates to the legal consequences, i.e., the specific amount of the levies to be paid. If the amount was calculated correctly, but the reasoning on which the decision is based is incorrect, this is not sufficient for an appeal.