The UN states: “Young people can help shape the social, economic, political and cultural life of their communities and their countries.” (*). This issue was highlighted when three lawyers were invited to a conversation to learn their views on an old institution: the Customs Office. But what encouraged them to acquire specific knowledge about this State body?
With that in mind Guillermo Vidal Albarracin (Criminal Law Specialist. Partner at Estudio Durrieu, in charge of the Customs Criminal Law Department), Santiago Alais (Master in Tax Law with a customs focus from the Universidad Austral. Partner at the Alais & Torres Brizuela Firm) and Matthew Mc Cormack (Customs Law Specialist. Partner at Petersen & Cotter Moine Law Firm) also respond to current customs issues and then focus their attention on the future of Customs.
The interview with Customs News It was held in person in the City of Buenos Aires on May 8, 2023. It has been lightly edited for clarity and content.
Aduana News: The first question is about what the virtue of something would be. What has led you to become interested in Customs?
Guillermo Vidal Albarracin: My approach to Customs was through my father (Héctor Vidal Albarracín). I started working in the office with him, who had been working in customs law for many years. This experience gave me the opportunity to acquire knowledge in criminal law, specifically customs criminal law, which is what I do most of the time. I am passionate about the subject, I find it spectacular and fun. I don't see that there is a routine in Customs.
Santiago Alejandro Alais: My case was similar to that of Guillermo Vidal, since my father has also been dedicated to customs law. In addition, he was a Customs official. So, since I was a child, my life and customs were related. So, when I chose to be a lawyer, my path was going to join customs. After finishing my undergraduate degree, I applied for a customs postgraduate course because this subject is not in the UBA curriculum, although it is in some private universities that have it as an optional subject. With this, I felt like I was entering a different world. The CA has quite a few articles, all related to undergraduate subjects, but it was a new code. This approach was a challenge in terms of always being attentive. Customs is dynamic. Different laws come together in it (tax, administrative, constitutional, criminal, and customs law itself as an autonomous branch). All of this has caught my attention.
Matthew Mc Cormack: My approach has been different. I got into the field by chance after finishing university, thanks to the contact I had with Jorge Petersen and Benitez Cruz, who gave me the opportunity to work in their firm. It is a subject that touches on a bit of everything with the characteristics of international dynamics. A clarification, I had a penchant for commercial/business law. But customs law led me to investigate that subject as well as the constitutional principles that regulate civil and commercial law. The truth is that customs law captivates you. The subject has a lot of dynamics, many problems and many solutions. This makes it interesting for everyone.
Aduana News: Given your clear customs training, how far should Customs' role in exchange control go, considering that this control is the responsibility of the BCRA?
Guillermo Vidal Albarracin: From a theoretical point of view, the role of Customs in exchange control has never been so closely linked as in recent years. In Argentina, every time there is a problem with the difference in the exchange rate between the official dollar and other types of dollars, the State is concerned about avoiding maneuvers to evade these controls established by the Central Bank of the Argentine Republic (BCRA). From this point of view, I want to clarify that I am in favor of BCRA control to avoid maneuvers that take advantage of certain "loopholes" or possibilities to access a more beneficial exchange rate for this issue. In this sense, I am in favor of controlling this type of issue, but I have some criticisms regarding the movement that Customs has been having in recent years, because, as the question I am asked indicates, exchange control is in the hands of the Central Bank and, as such, it has the Exchange Penal Regime in order to avoid maneuvers in this sense. We already have the old ruling Legumbres SA et al. s/ smuggling, from the Supreme Court, which said: when one analyzes a criminal issue, that is, when one wants to use the criminal tool to punish maneuvers that are linked to foreign trade operations, one has to punish the functions that affect the customs service. These linked functions refer to the payment of taxes, the correct payment of refunds and reimbursements, and the control of prohibitions.
The foreign exchange issue is an issue that is outside the Customs Office, it is not essentially a customs function. Although the Customs Office may have a say in analyzing some issues, the action from the point of view of repression is the responsibility of the BCRA. In this regard, it is clear that the Customs Office is very proactive in absolutely valid and interesting investigations (it can ask and investigate the operations in terms of value and prices), but when it wants to initiate a judicial procedure it should not extend the charge of the crime of smuggling to functions that are not essentially customs. In any case, it should report the fact to the BCRA so that it can exercise its control of the Foreign Exchange Penal Regime, from the point of view of legality, which is the one established in Argentina to punish this type of conduct.
Lately, this action has also been seen at the disciplinary level in response to requests for foreign exchange matters that somewhat exceed the functions of the customs service in this area.
Customs News: What is your opinion on the powers of the TFN in the area of reviewing the constitutionality of the regulations applied in customs matters?
Santiago Alais: The issue of the TFN's powers in customs matters has been quite important in recent times. Currently, it is a power that the TFN is not exercising. This was made clear in the last plenary session that they held in recent months with the Petroquímica ruling, in which it was decreed that the TFN could not establish the unconstitutionality of a law. The reality is that there are many conflicting opinions and that we have a Tax Court completely specialized in customs matters. In my opinion, it would be essential to be able to fully exploit it. That is, we have a court that, due to its functions and characteristics, would seem to be more closely related to the National Judicial Branch and not to the National Executive Branch on which it depends, like Customs, specifically on the Ministry of Economy.
At the same time, Customs is both judge and party when making decisions, and so they should have some control, because they admit it. In this sense, it would be fantastic if the TFN could exercise this type of issues, considering the advisory opinions to access the Permanent Court of Review of Mercosur, with an advisory opinion it can be done through the Supreme Court of the Nation. And the Supreme Court of the Nation issued an agreement in which it establishes that judges are the ones who can access this type of opinions. Would it be correct for the CSN to issue an agreement in which it establishes that the TFN can access the Permanent Court of Review of Mercosur through the CSN? We would have another problem.
To answer the question, the TFN would not be exercising such control. What it is using is the control of unconventionality. Some TFN judges apply the unconventionality of a norm that is a product of inter-American human rights jurisprudence that is constitutionally guaranteed through article 75, paragraph 22, of the CN, which establishes this possibility.
Customs News: What should be done to speed up these customs processes?
Matthew Mc Cormack: Streamlining customs processes is an issue that has been going on for many years. It is a concern for individuals and for Customs, especially in these days when the currency has been so devalued, with the impact that this has on the collection of customs duties (where hard currency appreciates) and on fines, which are determined in pesos without any type of update. For this reason, I believe that this problem not only affects individuals, but also the customs service.
The topic has been discussed for some time, and academic proposals have been raised at the Congress on Customs Law of the Argentine Republic organized by the General Directorate of Customs and at several of the International Conferences on Customs Law organized by the Argentine Association of Fiscal Studies (AAEF). An attempt has been made to provide tools to the customs service through legislation so that these processes can be shortened in some way, independently of human resources, since perhaps more human capital should be provided to the legal and contentious areas of Customs, with an emphasis on technology.
Consideration has been given to shortening the limitation period or to reversing the interest rate so that it is cut off at a certain point in the procedure. Consideration has also been given to notifying certain acts issued by the customs administration that are significant enough to interrupt or suspend limitation periods. Regulatory changes have been proposed that provide for notification of customs decisions within a certain period, so that the periods are not extended. indefinitely; period in which the main injured party is the administrator.
It is a good thing that the jurisprudence, starting with the rulings “Lociser” (currency issue) and “Bossi and García SA” (customs issue) of the Supreme Court, has begun to take note, so that the accused is recognized the right to obtain a ruling within a reasonable period. Even the Customs itself, through the Customs Procedures Department, has applied this doctrine in some cases and has even issued General Internal Instructions that tend to optimize resources and speed up the processes, as occurred, for example, with the instructions in which the archiving of certain actions is ordered whose claimed amount does not have sufficient economic relevance. These measures, without a doubt, help to decompress a little the very intense function that customs agents have when it comes to managing and resolving cases.
For this reason, I consider that it is a very important issue that is being addressed, not only from an academic point of view, but also at a regulatory level. And at this point, I highlight the proposal to reform the Customs Code presented in 2019 by a Special Commission (which I had the honor of being a member of) made up of representatives of the Argentine Institute of Customs Studies (IAEA), the Chamber of Importers of the Argentine Republic (CIRA), the Chamber of Exporters of the Argentine Republic (CERA), the Customs Brokers Center (CDA) and the Argentine Chamber of Commerce (CAC), which contained, among many other issues, proposals for reforms aimed at optimizing resources and streamlining customs processes, so that the improvement in the administration of justice benefits both parties.
Finally, we hope that the advances in information technology will be welcomed by the authorities, so that customs procedures will be more agile.
Customs News: Please indicate an item that requires further customs protection and the reason.
GVA: In customs matters, from a criminal customs point of view - the field in which I practice - protection is provided by the Judiciary. We have complaints from the criminal field and we have guarantees that are fulfilled through the Judiciary.
It would be interesting to see this issue, which often occurs in practice, where there are often complaints with a prior intervention by the accused with a kind of mediation that could be analyzed to achieve a preventive protection of the administered party and prior to the intervention of the Judiciary to reach solutions that generate less cost for the State as well as for the administered party. If one thinks ahead to find known solutions in other areas such as the repair of damages or conciliation in criminal matters, novel issues, I believe that it could be put together from the protection of the rights of the administered parties within the scope of Customs itself, benefiting the problem of the deadlines and damages that are generated, taking into account the extra cost generated by litigation, since we are talking about merchandise that is detained, which implies the extra cost of returning the container, as well as the extra cost generated by the storage fee.
Having merchandise detained also generates a cost for the State, because if foreign trade is delayed, it causes damage to the country in general.
Therefore, we must look for tools that simplify the time and focus on the conflict instead of punishing; I believe that we could find better protection and solutions for everyone.
Customs News: What are the virtues and points of the Customs Code that should be updated?
TO: The CA has excellent issues that have been able to be systematized in a code with relevant articles where there are many situations that the CA resolves. I remember that we had a World Customs Congress in the United States where a person presented a relevant American ruling on the refund of a customs tax that had been paid in excess. It was a jurisprudential novelty because there was no standard. This shows that the CA of Argentina has very efficient articles and institutes in use. Now, trade has accelerated a lot, there are factors that are evaluated above all in a former before that must be taken into account so that when the merchandise arrives it can flow, so that it is more agile, benefiting everyone. In this sense, a motion was submitted to the Chamber of Deputies to modify the CA, which is referred to the fact that at the time of determining a destination a possible illicit act is identified, and automatically released under the guarantee regime, which speeds things up a lot. Along the same lines, it also proposes that, in the case of prohibited merchandise because a tariff position was determined that may not be the appropriate one, if that new position needed a new electrical safety certificate or a SIRA that is not necessary, the merchandise can be automatically released and the person who brought it remains as the faithful depositary. These are basic concepts that are being used in different customs offices around the world for agile trade and so that the merchandise is not left for anyone who has to make a destination. (Video)
Customs News: Can you highlight a ruling by the Supreme Court of Justice for the significance of the criteria imposed in customs matters?
MM: There are many important Supreme Court rulings on customs matters. Perhaps the most significant of recent times is the case of Camaronera Patagónica, in which the Court declared the unconstitutionality of a ministerial resolution issued by the Executive Branch that established an export duty without a valid delegating norm that established a clear legislative policy, thereby violating the principle of legal reserve in tax matters. However, it seems important to me to highlight the doctrine established by the Court in the YPF case, at a time when ex post controls on customs valuation have been intensified. In that case, Customs questioned the price of natural gas exported by pipeline to Chile and Uruguay as a suitable basis for calculating the export duties in force at that time. Both Customs and the exporters presented their arguments. In the first instance, the TFN accepted the arguments of the producers. The National Chamber of Appeals in Federal Administrative Litigation revoked the decision and ratified the position of the Treasury, and the case reached the Court, which, before going into the substance of the matter, pointed out that, although the Customs enjoys a certain margin of discretion, its decisions must adhere to the principles established by the Law of Administrative Procedures. We cannot forget that the Treasury and the customs must comply with certain principles that are reflected in the Law of Administrative Procedures; which, in turn, take also elementary principles of Constitutional Law. Thus, it pointed out that although the Customs has broad powers to analyze the customs value of exported goods, this has a limit: respect for constitutional rights and the principles established in the law of administrative procedures that speak of the issuance of a duly founded act, where the reasons why these values can be questioned are explained. The SCJ established this doctrine in 20013 and it has a limit: respect for constitutional rights and the principles established in the law of administrative procedures that speak of the issuance of a duly founded act, where the reasons why these values can be questioned are explained. The SCJ established this doctrine that, although it refers to the determination of the taxable value of exported goods, can also be applied to determine the customs value of imported goods, where an International Agreement applies (the GATT/WTO Valuation Code).
Aduana News: How do you see Customs in 10 years?
GVA: My hope is that Customs will be able to move forward with the implementation of technological issues related to procedures and thus be able to provide solutions to the problems we are seeing. Ten years is a long time. The acceleration of technology that we saw at the judicial level as a result of the pandemic is lacking in Customs. My hope is for a more technological Customs that avoids the use of paper.
SAIt would be essential for Customs to have a master electronic file where all sectors of any customs office can enter, track the file, and also standardize the systems they currently have. Ten years is a sufficient period to address and achieve the electronic file. Added to this is the fact that the customs officer is dedicated to the analysis of risk matrices to minimize them, and when the merchandise arrives it can be released quickly, or a specific ex post control can be carried out as implemented by the customs offices of Italy, Mexico, and Spain, aiming at a more agile and efficient trade for all.
MM: I share the technological vision. I believe that we have to adapt quickly, although it is difficult. However, I strive for a Customs that facilitates compliance with the commitments that the Argentine State has at an international level, such as the Trade Facilitation Agreement and the WTO Agreement. That is why I hope for a more technological and transparent Customs.
Customs News: Final Thoughts.
GV: I believe that all these issues we have been discussing can be achieved through public-private dialogue. My wish is to return to that path.
TO: I want trade to flow, that is, I want easy and agile trade that helps the country.
MM: I believe that public-private collaboration is very important in order to listen to each other, to facilitate trade and for Argentina to grow. There are many young people in Customs with high possibilities of making great changes and achieving good results.
(*) https://www.un.org/es/impacto-acad%C3%A9mico/di%C3%A1logo-intercultural
Aduana News is the first Argentine customs newspaper to launch its digital version. With 20 years of experience, its publications and initiatives aim to provide the most relevant knowledge on customs issues in order to contribute to safe trade in the region.