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As is well known, the purpose of the inspection application is merely to monitor developments in the import of a good in order to resort to safeguard measures when necessary. However, due to problems arising in practice, it frequently becomes a topic of discussion. According to this application, during the import of goods with unit values below the unit prices determined by the Ministry of Trade through relevant Announcements, it is generally required to have obtained an inspection certificate from the Ministry of Trade.
However, it is observed that the information and documents required by the Ministry and which need to be obtained from the foreign supplier of the goods often cannot be procured due to reasons of commercial confidentiality. Even when they can be procured, the inspection certificate is not issued by the Ministry within a reasonable period. As a result, importers face increased import costs, and in some cases, disruptions occur in companies’ supply chains.
On the other hand, for importers who, despite applying, cannot obtain the inspection certificate within a reasonable period or do not wish to obtain it for any reason, it is possible to raise the unit value of the relevant goods to a level that does not require the presentation of an inspection certificate. Thus, they can finalize the import process without obtaining the inspection certificate.
However, raising the unit value of the imported goods in this manner results in the overpayment of customs duties during importation, almost all of which are calculated based on the ad valorem method. Subsequently, some importers apply to the Customs Authorities requesting a refund of these overpaid duties under Article 211 of the Customs Law. Upon the rejection of these applications, importers resort to legal action.
In such disputes, courts, considering not only the procedures and principles related to determining the customs value of the imported goods but also the purpose of the inspection application and the fact that the main character of this application is not a safeguard measure, rule in favor of the claimant. They order the reimbursement of the inappropriately paid customs duties, with interest, to the importers.
Customs Authorities, in fulfilling the requirements of the court decisions, subsequently demand the presentation of the inspection certificate for goods imported at unit prices that would have required such a certificate. If the certificate is not presented (or cannot be presented), importers are then subjected to a monetary penalty amounting to twice the customs value of the goods. These penalties, in turn, become a matter of dispute; thus, conflicts arising from the inspection certificate between importers and Customs Authorities can persist for years.
To put an end to these disputes in practice and to prevent importers from reclaiming unjustly paid taxes through the courts, an amendment has been made to the 2nd clause of the 1st paragraph of Article 211 of the Customs Law with Law No. 7333, which was published in the Official Gazette on 28.07.2021 and subsequently came into effect.
Previously, the mentioned clause stipulated that if customs duties, which legally should not have been paid or accrued, were paid or accrued as a result of a deliberate falsification by the concerned individual, requests for the refund or removal of these duties would not be accepted. However, following the amendment, the clause now reads:
“However, if customs duties, which legally should not have been paid or accrued, were paid or accrued due to a deliberate falsification by the concerned individual or as a result of increasing the customs value of goods subject to trade policy measures based on the declarant’s own statement, requests for the refund or removal of these duties will not be accepted.”
Thus, with the inclusion of the inspection application among others, the law now stipulates that if the customs value of goods subject to trade policy measures is increased based on the declarant’s own statement, the refund and removal applications made by the obligors for these unjustly paid taxes will not be accepted. After this regulation, the direction in which disputes arising from the inspection application will progress cannot be predicted at this stage, especially considering how judicial authorities will apply this recent legal amendment in resolving the disputes.
However, this recent legal amendment, especially in cases of human errors such as incorrect currency declaration or incorrect invoice declaration, has the potential to pose an obstacle to the refund of overpaid taxes. In this context, when this latest legal amendment is considered in conjunction with the Turkish Customs Administration’s hesitant approach to implementing refund provisions, it could pose a barrier to the refund of unjust tax payments that are essentially due to human errors and should be returned to the concerned parties. Therefore, this recent legal amendment has the potential to lead to new problems.
Moreover, this recent legal change might also reinforce the prevalent opinion that the inspection application has deviated from its original purpose in practice and has increasingly taken on the character of a safeguard measure. Furthermore, it cannot be argued that monitoring the import trend of a specific good is only possible through the current inspection application. In today’s digital environment, where customs declarations are processed through the BİLGE system, the Ministry has immediate access to all relevant data, including the unit values of goods for which the import trend is being tracked.
Moreover, with the ongoing issues related to obtaining the inspection certificate and doubts about whether the unit values that require an inspection certificate are objectively determined, we believe that the recent legal amendment, which increases the tax burden on foreign trade merchants who are forced to raise the customs value of imported goods to prevent disruptions in the supply chain, is open to debate in terms of its compliance with the principle of the legality of taxes.
In conclusion, we believe that it would be beneficial to subject this recent amendment, which aims to resolve the long-standing inspection disputes in favor of the Administration and which will effectively give the inspection certificate application the character of a safeguard measure, to a constitutional review through concrete norm control.