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14.09.2020

The businesses have accumulated claims to adjust the customs value of goods

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The Ombudsman for the Protection of the Rights of Entrepreneurs of Kazakhstan, Rustam Zhursunov, wrote about this on his Facebook page.

“The use of price indicators by the customs authorities when controlling the customs value of imported goods has become a serious barrier in the implementation of foreign economic activities by entrepreneurs.

And, I draw your attention to the fact that we are not talking about violators of customs legislation. It is the conscientious business that suffers, which, during customs clearance, provides all the necessary documents to confirm the declared value.

In his September Address, the Head of State, paid special attention to the development and preservation of small business. SMEs need reforms, as the regulatory system is still cumbersome and even punitive.

The reasons for drawing such conclusions are the most serious. Since April 1 of this year, the customs value indices (hereinafter - CVI) have been increased for almost all goods from 3 to 18 times.

To my address and to the address of the National Chamber of Entrepreneurs of the Republic of Kazakhstan “Atameken,” there are many appeals on this issue.

It turns out that the business has only two options: to agree to a deposit, then to prove the declared customs value for a long time. Or immediately accept the cost of the customs authorities at a loss.

In my opinion, this is a very serious administrative barrier. To defend its position, a business has to divert working capital to secure a deposit, pay for storage services for temporary storage warehouses, and incur losses for breaking contractual obligations. The good faith of the company is not taken into account at all. Business suffers losses.

Entrepreneurs are sounding the alarm. They propose to create a website where prices will be visible, where they will be determined without variability at a lower price. After all, those who cannot clear customs in Kazakhstan go through customs in neighboring Kyrgyzstan.

The average customs value absolutely does not take into account the issue of product characteristics. Goods of various brands, models, etc. are imported into the Republic of Kazakhstan under one TN VED code.

Yes, there are branded products that cost many times more, and the price information is the same.

The supplier of the building material - marble LLP “Pearlstone” says that they have a cargo in Astana, they have contracts and terms, they brought goods at the same price, and this time they are charged three times more. How should they behave in this situation? Construction is at a standstill, and deadlines are on fire.

The business has a reasonable question: how is this price information generated? Where do these prices come from? Why is the price information from the customs authorities applied to bona fide entrepreneurs? The State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan says that it is based on the method of expert assessment. What is peer review? And how can you influence it? Unfortunately, we have not received a detailed answer so far. In our opinion, today the prices are overpriced for all goods.

At the same time, the customs legislation itself has not changed. But why is law enforcement changing?

All these problems were raised at the meeting, which was held under my chairmanship by videoconference with the involvement of business, the National Chamber of Entrepreneurs “Atameken” and the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan, at which the issue of using price indicators by customs authorities in customs control of customs value was discussed.

The main issues that were discussed at the meeting: the system by which the customs authorities work should be open, transparent and understandable. Conscientious business should not suffer. It is necessary to solve this problem; it must clearly distinguish between conscientious and unscrupulous entrepreneurs.

As a result, from our side it was proposed:

- switch to an open (transparent) mechanism for the formation of CVI with the involvement of business, and with preliminary information about the updated CVI, the reasons that led to the changes.

- to develop guidelines for the control of customs value for the territorial bodies of state revenue, while providing for liability for non-compliance with the established rules;

- to develop and send detailed explanations on the determination of the customs value and the use of price information for participants in foreign economic activity;

- to develop systemic measures together with the State Revenue Office and NCE RK “Atameken,” including when considering controversial issues related to customs value;

- to develop mechanisms of interaction and participation of NCE RK “Atameken” in the consideration of business complaints on the determination and control of customs value;

- to develop a website where all the necessary information for determining the customs value, including price information, will be posted;

- to work out the issue of the development of price studies in conjunction with NCE RK “Atameken.”

In turn, representatives of the SRC MF RK represented by the Deputy Chairman of the SRC MF RK, Dzhumagulov K.K., and the Head of the Tariff Regulation and Cost Department, G.A. Aliaskharova, supported business proposals in timely and correct updating of customs value indices.

Summing up the results of the meeting, it was decided to work out the situation with all interested parties within a week, take urgent and prompt measures, and simultaneously move towards improving customs legislation. I am confident that steps will be taken to address this situation.

Exactly in a week we will meet at the same site. I hope we will have concrete results in regulating the current, difficult situation for business,” wrote Rustam Zhursunov.

«...Domestic business, the so-called national bourgeoisie, should be supported in every possible way, and those who prevent its development by unreasonable inspections, extortions, raids should be strictly punished...»

Statement from the President of Kazakhstan Kassym-Jomart Tokayev at an enlarged meeting of the Government on 15 July 2019

Nurov Kanat Ilyich.

Ombudsman for the Protection of the rights of Entrepreneurs of RK

The blog of the Ombudsman for the Protection of the Rights of Entrepreneurs of Kazakhstan was created for you to have an opportunity to appeal directly to me and I hope that it will contribute to a constructive dialogue between us – send me feedback, share opinions, make suggestions. All your comments without exception will be read by me.

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Ministry of Foreign Affairs of the Republic of Kazakhstan
Financial Monitoring Agency of the Republic of Kazakhstan
Atameken
The General prosecutor's office of the Republic of Kazakhstan
Legal information system of Regulatory Legal Acts of the Republic of Kazakhstan