Data
- Date:
- 03-12-2018
- Country:
- Russian Federation
- Number:
- A21-10478/2018
- Court:
- Arbitrazh Court of Kaliningrad Region
- Parties:
- KSMK v Federal Customs Service
Keywords
SALES CONTRACT – BETWEEN A RUSSIAN COMPANY AND THE FEDERAL CUSTOMS AUTHORITY - REFERENCE TO UNIDROIT PRINCIPLES TO CONFIRM THE SOLUTION ADOPTED UNDER THE APPLICABLE LAW (RUSSIAN LAW)
PARTY AUTONOMY - REFERENCE TO UNIDROIT PRINCIPLES (ART. 1.1)
Abstract
This case concerned a dispute between a Russian company and the Federal Customs Authority over the determination of the customs value of goods imported into Russia under a cross-border contract with the Italian company.
On 27 March 2018, Seller and Buyer concluded a contract for the sale and delivery of goods from Italy to Russia. Pursuant to the contract and subsequent documentation (applications, specifications, invoices, and bank payment orders), The Italian Seller delivered goods that were duly declared by the Russian Buyer at the customs on 7 May 2018.
The Russina buyer declared the customs value based on the transaction value method (Article 39 of the EAEU Customs Code), i.e., the price actually paid or payable for the goods under the contract.
However, the Customs Authority doubted the declared value, initiated additional document requests, and subsequently adjusted the customs value upward. This resulted in increased duties, which the company challenged in court, arguing that its declared value was lawful, supported by full documentation, and consistent with international standards.
The Arbitrazh Court examined the contract, specifications, invoices, payment orders, and bank statements. It was found that these documents formed a coherent and consistent evidence confirming both the actual delivery of the goods and the payment of the contractual price.
The Court emphasized that the declared transaction value reflected the real agreement of the parties, which was not artificial or simulated. Importantly, the Court invoked Article 1.1 of the UNIDROIT Principles, which states: “The parties are free to enter into a contract and to determine its content.”
By referencing the UNIDROIT Principles, the Court reinforced the idea that international trade contracts are grounded in party autonomy. The principle of contractual freedom under UNIDROIT aligned with both Russian civil law (Article 421 of the Civil Code of the Russian Federation) and the EAEU Customs Code, supporting KSMK’s right to determine the contractual price with its foreign counterparty.
The Court reasoned that since the contract was validly concluded, duly performed, and reflected a genuine commercial arrangement, the transaction price agreed upon should serve as the proper basis for customs valuation. The customs authority’s skepticism, absent specific proof of manipulation, could not override the fundamental principle of respecting the parties’ autonomy in setting contractual terms.
Abstract in English kindly provided by Roman Zykov
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