In international trade of goods, proper identification is necessary. Fundamentally, based on their individualization, it will be necessary to determine the taxes that may apply due to their importation for consumption, and also to verify whether the goods are subject to any type of prohibition or restriction.
In order to determine their correct universal individualization, the concept of "Nomenclature" was born. Carvajal Contreras points out that this system finds its reason for being in the need to respond to the problems derived from the diversity of methods of individualization and classification of merchandise and in the need to have an adequate statistics system for the proper monitoring of the values, quantities, origin and destination of the merchandise (1).
In the past, nomenclatures consisted of simple lists of goods, empirically organized, sometimes in alphabetical order. But with technological development and different international customs policies, it became necessary to establish criteria that would allow the grouping of different goods, so that the nomenclatures could respond to the needs of international trade.
In this way, the Customs Cooperation Council approves the Harmonized System. The Harmonized System Nomenclature, adopted by the International Convention on the Harmonized Commodity Description and Coding System, was signed in Brussels in 1983, under the auspices of the Customs Cooperation Council..
The adoption by 177 countries, of which 104 are contracting parties to the Convention on the Nomenclature of the Harmonized System, has made its use universal and it is now impossible to operate in international trade if the coding of the goods is unknown.. (2). As provided for in Article 1 of the Agreement, the first six digits of the nomenclature are universal: the first four correspond to the heading number and the last two to the subheading. The States party to the Agreement must respect these first six digits, and may then make additional subdivisions.
This Convention was ratified (3) by our country and has been in force since January 1, 1992. Since then, various amendments have been made that have improved the nomenclature, in accordance with the technical and technological advances that have been taking place in the world.
The nomenclature imposed by the Convention is intended to serve as a basis for the preparation of import tariffs, for the development of statistical nomenclatures, and also for international use by international trade operators.
This universal pattern is essential. Declarations submitted to Customs are increasingly simplified. Detailed manual declarations have been abandoned and simplified computerized declarations have become more common. Thus, the coding of goods is essential. The specifications of the goods are no longer declared, but rather their tariff position is indicated. It is therefore essential that there be a universal pattern to which the states adhere. The customs service requires uniformity in the designation of goods, in order to be able to adequately exercise control over their entry or exit.
The existence of a Universal Codifier and General Rules of Interpretation are very important, given that the tariff classification of a merchandise not only determines the taxes that correspond to its import or export for consumption, but also indicates whether the merchandise is permitted for import or export and, if applicable, whether there are prior certifications, quotas or restrictive measures.
While it is true that the Harmonized System has been a great step towards the unification and simplification of tariff procedures, the classification of goods is sometimes still complex. There are even many cases in which the classification of a good is modified.
Indeed, on some occasions, based on the intervention of specialized technical areas, the AFIP reviews the technical conclusions that support a classification criterion and modifies the tariff classification of certain goods.
It is clear that the AFIP has the power to review its classification criteria, as soon as it sees a reason that justifies the review of the technical conclusions. The incorrect tariff classification of a merchandise deserves and should be reviewed. Insisting on the error is not the way. It is appropriate to be tolerant of discrepancies or modifications of classification, given that it is a technical task of manifest complexity.
Now, just as the AFIP can and must review its technical conclusions and all subjects linked to customs activity must accept these classification reviews and modifications, which in many cases can lead to operational complications, it is important to keep in mind that there should also be a certain tolerance for classification errors in which a declarant may incur.
Indeed, just as AFIP officials may allow themselves to make a correction in the technical assessment of a merchandise and then review their position, it is also appropriate to accept the technical error of the declarant, obviously when this error is objectively understandable and reasonable.
By this we mean that not all classification errors must necessarily give rise to sanctions in the terms defined for the infraction of inaccurate declaration provided for in article 954 of the Customs Code, as is often the case.
It is important to bear in mind that these technical discrepancies that may exist when analysing a merchandise and defining its location in the nomenclature should not necessarily be sanctioned with a fine. Any technical incompetence should not always be blameworthy, given that, in many cases, the classification of a merchandise can be a complex task and difficult to solve. The doctrine of the Tax Court has been contested on this matter.
Chamber E of the National Tax Court has considered that the declarant who has erroneously formulated a declaration through the María Computer System, acting with maximum diligence and taking extreme caution in entering the data in order to determine its location in the Nomenclature (4), is not punishable.
Chamber F of the Tax Court, for its part, has also ruled in favor of the acquittal of the declarant, although recognizing «That the application of the aforementioned rule is not easy within the Maria System under which the declaration being analyzed was made, since the description of the merchandise is subject to the limits assigned to it by the computer system, a complete and detailed description is difficult, given that it is necessary to select one of the pre-established texts. The obligation of the document-maker can only be linked to choosing the text that corresponds to the merchandise in question and in this task he must put due diligence, because the classification and, where appropriate, the liquidation of the liens will depend on his selection» (5).
For its part, Chamber G is inclined to consider that «In our opinion, it is fair, logical and appropriate to the system of special culpable liability for customs violations (art. 902 of the CA and its doctrine)… to interpret that the scope of the exculpatory cause is limited to the reasonably inaccurate tariff classification, that is, to the classification of the document that, although it turns out to be incorrect or inaccurate, could nevertheless have been determined or chosen as a result of an understandable and admissible error or an objective and entirely difficult classification, so that the error or the ultimately improper choice were reasonably justified, this determination being, of course, dependent on the prudent assessment of the judge.» (6).
This doctrine has also been shared by the National Chamber of Administrative Litigation (7).
Both doctrine and jurisprudence have validated the full application of the exculpation of the error of indication of tariff position, in cases of reasonably inaccurate classification and also reasonable accreditation of due diligence of the declarant. This is how the jurisprudence has ruled, given that it is the Customs that is in charge of the tariff classification of the merchandise and considering that sanctioning the incorrect indication of tariff position without more, would imply penalizing a technical incompetence.
Of course, the issue is not simple since the jurisprudence discussed is prior to the repeal of article 957 of the Customs Code provided for by law 25.986, a provision that expressly determined that inaccurate tariff classification was not punishable.
However, despite the widespread belief that since the repeal of Article 957 of the Customs Code, the slightest classification error, even if justified and objectively reasonable, justifies a sanction in terms of the infraction of inaccurate declaration, we consider that the error in the indication of the tariff classification should not always merit reproach for infraction.
If the penalty were to be imposed without further ado, the mere indication by the declarant of a position in the nomenclature that is not the position that the customs service considers applicable would be sanctioned - which can even be rectified later -, applying a punishment whose severity was conceived for factual errors. If this criterion were followed, the lack of technical knowledge would be punished, when this lack of skill is acceptable to the Treasury, which has the possibility of changing the classification criterion through a new General Resolution.
It is clear that each case must be specially analyzed and that, in principle, the proposed position must be objectively reasonable. One of the most important functions of customs brokers is to adequately advise importers and exporters regarding the tariff classification of goods and, furthermore, in the codified declaration regime that prevails throughout the world, the tariff position of the goods is a determining element of the declaration since, based on the chosen position, the tax and restriction regime that is applicable to the goods is defined. Therefore, it is clear that the tariff declaration is fundamental and that extreme caution must be exercised when recording the position of a merchandise.
However, in cases of reasonable errors and when, despite misclassifying a product, this error is due to an understandable and admissible error or it is an objective and completely difficult classification, so that the error is reasonably justified, we do not consider it appropriate to apply a sanction to the declarant. The repeal of article 957 of the Customs Code does not prevent this. We say that no sanction is appropriate, because in these cases the conduct of the declarant - although wrong - does not merit reproach for an infraction, given that there is not the minimum degree of fault required by the Customs Code for the application of the sanction.
This has been upheld by recent jurisprudence of the Tax Court (8) which deserves to be highlighted. It has been highlighted there that “In this state of affairs, it must be pointed out that in order to verify the differences in the declared qualitative aspects, it was necessary for the authorities of the National Institute of Industrial Technology to carry out an exhaustive technical study. In this sense, I believe that, if for the correct framework it was necessary to carry out a scientific activity that exceeds the scope of the responsibilities of both the exporting firm and the customs service assistant, the exercise of the administrative sanctioning power could not be justified. I find that there is a mistaken understanding of the meaning of the infraction figure when it is intended to apply a sanction with an automaticity that is inappropriate for the work of legal operators without taking into account the particular circumstances of the case. It is fallacious that any inaccuracy in a declaration is likely to lead to the application of a sanction.
In this order of ideas, it should be noted that the error that arises is corrected by differentiating the assumptions of responsibility. In this sense, I must not fail to point out that guilt is not an autonomous element to prove administrative sanctioning responsibility, since there are those obligated who do not have the capacity to act, and consequently, much less can the possibility of attributing subjective attribution factors be envisaged. Although this implies that the criterion of legality is conceived without taking into account any subjective element, it is no less true that, in the hypothetical case that the accused considers that the sanction is unreasonable because its application is disproportionate in light of their diligent behavior, a scrutiny of reasonableness must be made relative to the possibility of abstract compliance with the requirement imposed, which in this case is limited to the fact that the exporting firm and the intervening customs agent should have known the material properties of the declared merchandise.".
We consider that this doctrine deserves special emphasis. Not all classification disputes merit reproach for infringement. It is necessary, as in all cases of a repressive nature, to analyse the conduct of the person administered.
1. CARVAJAL CONTRERAS, Maximo, Customs in Mexico, cit., p. 231.
2. PRANTEDA, Nicholas, Classification of goods in international trade, The Law, Buenos Aires, 2002, p. VII.
3. Law 24.206
4. National Fiscal Trib., Chamber E, 24/02/99, «Disporteko SA c/ANA (TF 9174-A)», 14/06/02 «Professional Security Alliance SA c/ANA (TF 13.708-A)» and 30/03/06 «Guardiola, Víctor A. c/DGA s/appeal (TF 21.372-A)», the latter published in ED 218:103.
5. National Fiscal Trib. Chamber F, 05/03/02 «Tejica SA v. DGA s/appeal (TF 13.344-A)»;, 24/02/04 «Gana Import SRL v. DGA s/appeal (TF 15.235-A)»; 27/12/06 «Rioplatenses Graphic Arts.
6. National Fiscal Trib. Chamber G, 21/12/01 «Aluplata SA v. ANA s/appeal (TF 9237-A)»; 20/07/01 «Amilcar Ignacio v. ANA s/appeal (TF11.599-A)».
7. C. Nac. Cont. Adm. Fed., Chamber I 03/09/02 «Disporteko SA (TF 9174) c/DGA»; Chamber III 18/04/06 «Tejica SA (TF 13.344-A) c/DGA»; Chamber III, 08/08/01 «Aluar Aluminio Argentino SA (TF 8229-A) c/DGA»; Chamber V, 01/10/03 «Amilcar, Ignacio (TF 11.599-A) c/DGA»; among many others.
8. TFN, Room G, 27/02/23, “Burgos, Jerónimo Ariel c/DGA (TF 27.391-A).
Attorney (UCA), Partner at Petersen & Cotter Moine Law Firm.
Full Member of the Argentine Institute of Customs Studies (President 2010/2011). Active Member of the International Academy of Customs Law (Member of the Board of Directors 2015/2023). Active Member of the Argentine Association of Tax Studies. Member of the Customs Law Commission of the Council of the Center for Studies of Financial Law and Tax Law, of the Department of Business Economic Law of the Faculty of Law of the University of Buenos Aires. Member of the Scientific Committee of the Journal of the Colombian Institute of Tax Law.
Professor of customs law in the postgraduate courses in customs law at the University of Buenos Aires, where he is also the Vice President of the Customs Law Update; of the Catholic University of Argentina, of the Austral University and of the Di Tella University.
Author of the books “Customs Law and International Trade”, published in 2018 by Guía Práctica; “Customs Law”, published in 2014 in 3 volumes by Abeledo Perrot, winner of the 2014 Argentine Association of Tax Studies Award for the book of the year; “Customs Offenses”, published in 2011 and second edition in 2013 by Abeledo Perrot; and Coordinator and co-author of the books “Customs Law Studies”, published in 2007 by Lexis Nexis and “Customs Law Studies. 30 Years of the Customs Code”, published in 2012 by Abeledo Perrot. He was one of the updaters of the Annotated Customs Code, published in 3 volumes by Abeledo Perrot in 2012.
He has also participated in collective books published abroad and has published more than fifty articles related to customs law, published in various media (La Ley, El Derecho, Jurisprudencia, Revista de Derecho Fiscal, Revista de Estudios Aduaneros, Revista Tribunas, and La Nación newspaper).