Ricardo Xavier Basaldúa is considered a jurist of recognized authority, convinced that a country cannot lose contact with international reality. The evidence is clear: he is one of the prestigious editors of that surprising modernization instrument for Argentina to develop commercial activity, called the Argentine Customs Code.
when fulfilled forty years since its creation, Customs News spoke with Basaldúa. His specialist vision has given him a prestige that extends beyond the national sphere. For this reason, he clarified what we understand by “Customs Law” and specified the way in which the country managed to have this positive legislation in a Customs Code; he detailed its virtues and needs, as well as its challenges from the perspective of a State that has assumed the international commitment to facilitate trade.
-What is meant by Customs Law?
-Customs Law regulates the import and export of goods to different countries and fundamentally the control that customs exercise over everything that enters and leaves that country, because no State is indifferent to what crosses its borders. Goods can be harmful, transmit pests, be dangerous, threaten public safety. Goods are not only in commercial traffic but involve many things. Consequently, since the time of Aristotle it was said that every ruler, in order to govern well, needed to know what entered and left his country. Foreign trade in each country is fundamental. Let us talk about the first regulations that existed in this matter: Louis XIV, the Sun King, with the guidance of his Minister Colbert, decided to strengthen France, enable the development of an industry and protect the artisans that he summoned from many countries to settle in France. This is how the Gobelin industry, the baccarat crystal industry and Limoges porcelain appeared. That is, France sought to protect its industries and used customs duties for the first time as a form of protection, because until then customs duties were used to raise funds for the State. But Colbert used them to protect: he set high tariffs so that industries would develop. So In 1687, with Louis XIV as king, the first customs ordinances were approved.. Before the appearance of tax and administrative law, we already had the Customs Ordinance in France, which It was a systematic regulation of those rules that had been collected in the different ports of the Mediterranean, where there was a significant commercial traffic. Obviously, the captains of ships that arrived at the ports with different goods had to face the customs authorities. This required regulation and therefore, the decision of Louis XIV. Shortly after the French Revolution, the Constituent Assembly approved the French Customs Code in 1791. There were only a few years left before Napoleon came to power; during his period the Civil and Commercial Code was established, which took place in 1806 and 1807, but the customs codification had already begun to ensure the collection of taxes and the control of the merchandise that entered France; at that time they were called entry rights and exit rights and regulated the powers that the customs had to exercise control. This is The concept of customs law, which is very old, because although this was the first systematic regulation, there were already customs in Egypt, Greece, Rome... It is enough to know how the Port of Piraeus or Ostia worked. Montesquieu went so far as to say that where there is trade there are customs.
-How was the creation of the Argentine Customs Code decided?
-Before reaching the Argentine Customs Code, in 1866 Christopher Aguirre, who was Director of Customs, drew up some ordinances that were very good for their time and were modified ten years later to control land traffic with Bolivia, Paraguay and other neighboring countries. So the ordinances known as those of 1876 are those of 1866 with those additions. Cristóbal de Aguirre united the legal with the regulatory and made complete ordinances to favor the customs officers who had to apply them. When he did this, Buenos Aires had no docks or wharves. The merchandise was lowered onto barges, which arrived at the Retiro park. Consequently, the legislation had its merits but it had to be replaced at some point. As it was a verbose regulation (it had more than a thousand articles), no one dared to repeal the Customs Ordinances. Then the customs laws of 1921 appeared and new customs laws with ordered texts were drawn up at different times, such as 1941, 1956 and 1962. All this caused Argentine Customs Law to not be systematic. We had the ordinances on one hand, and on the other, the so-called customs laws that were modified and added to in ordered texts. So, with the Dr Juan Sortheix, at the now National Tax Directorate, made the great decision to completely replace the customs legislation. In 1969 I was lucky enough to participate in that task. The group included Drs. Juan Patricio Cotter Moine and Julio Rubens y Rojo, who came from Customs, and Sortheix and I, who represented the DNI and prepared the draft of the General Customs Law, but with the change of government it was set aside. Later, Sortheix, with the position of Undersecretary of Tax Policy and Administration, and a group of career officials was formed. At the same time, Sortheix was called from Brussels. He, who spoke English and French, had begun to go to the Customs Cooperation Council and had distinguished himself. Then he was put in charge of directing the work on the new nomenclature of the Harmonized System, which is the one applied throughout the world (This work ended in 1986). So Juan José Alberto Sortheix went to Brussels when we were about to begin the Customs Code project. In the absence of the “alma mater”, Carlos Tacchi, the Undersecretary who replaced him, appeared, very dynamic and with great enthusiasm. When I had the first meeting with him, he asked me what was the most important thing to do. I answered: “There is no doubt that the most important thing is to make the Customs Code.” I explained, he got excited and told me that I was going to be the Coordinating Secretary of the Drafting Committee of 8 members. The lawyers Mario Alsina, Enrique Barreira, Juan Patricio Cotter Moine, Hector G. Vidal Albarracin, Rodolfo Cambra and myself. In addition, Mr. Pancho García and Mr. Laureano Fernández, two “institutions” in Customs, very honest and with a long track record, who knew the customs regulations in detail. Thus began the adventure of the Argentine Customs Code that was finally sanctioned in 1981, but in reality the story began in 1969, with what was the draft of the General Customs Law. Those of us who were part of the commission committed ourselves to work every day from 15 to 18 p.m. without failing to fulfill the obligations we had in the DGI and in Customs. We did so for almost a year. And then another stage began that took us several years, because the idea was that the draft would be known and reviewed by the rest of the Public Administration and by the private sector. First, we informally sent what we had done to Customs and after considering their observations we prepared the draft Code, which we officially presented to the customs agency. And then the Secretary of the Treasury, Juan Alemann, decided, with our approval, to involve the private sector. About 50 copies were printed so that those who were interested could pick one up, and they were given a period of 90 days to make comments. All entities linked to foreign trade participated, as well as academic institutions. We had a broad response. We put together a report for the authorities, detailing which comments seemed appropriate and which we did not, and we continued working. We made an immense bibliography with all the presentations. And after having done that, we had to involve the public sector competent in the matter. First, the Directorate of Legal Affairs of the Economy, and then the different ministries. Agriculture, for example, was against us considering export duties, but how are they going to be eliminated from the Customs Code if they are provided for in our National Constitution in Article 4 and in Article 75, first paragraph? Export duties are a government instrument and the Customs Code is a basic legislation that must serve both a liberal policy and a protectionist policy.
What are the virtues of the Argentine Customs Code?
– It is a Code that has been in force for forty years. What does that mean? It means that it has achieved a miracle in Argentina, which is stability, legal security. All traders in the world want clear rules for trading, to know what to expect. Consequently, legal security is essential for international trade to take place. Trade brings peace because it links countries, it puts an end to pirates and looting. When people trade, there are peaceful relations. In short, the Customs Code, at the level of legal hierarchy regulations, has brought legal security to Argentina.
Secondly, I think it contributed transparency. The entire interested sector was summoned, from customs brokers to the Navigation Center, the Argentine Chamber of Commerce, Chambers of Exporters and Importers, the Industrial Union, the Bar Association, among many others. After consulting with the relevant sectors of the Public Administration, the Customs Code project was passed through the Legislative Advisory Chamber, where they had the French Customs Code translated for comparison.
In third place, contributed with the most modern that existed at that time. I travelled frequently to Brussels as an Argentine delegate to the Permanent Technical Committee of the Customs Cooperation Council; consequently, the Kyoto Convention (Convention for the harmonisation and simplification of customs regimes that was approved in 1973), I had the opportunity to learn about this convention during its preparation, where the different customs regimes were dealt with. At that time, we had at our disposal the latest word in the world on customs matters, in addition to the customs regulations of many countries. We had the experience plus the contacts with the delegates to obtain the regulations. Argentina was at the top at that time with the criteria established at a universal level.
Added to this, we had Four years to work without pressure. We care about making a clear, consistent code. We had to include the export regimes: export for consumption, temporary export, export transit, dumping, subsidies, the valuation system, special customs regimes, the statutes for freight forwarders and maritime transport agents, penal provisions (both infringements and crimes). We were able to summarise all of this in a complete Code, because it has penal and procedural provisions. In the European Union, even with the amendments to the Customs Code of 1992, in 2008 and 2013, customs offences and procedural rules were not yet incorporated.
-What is your opinion on the services that have been included as merchandise in the Customs Code?
-The inclusion of services and intellectual property rights in Article 10 of the CA referring to merchandise, has a collection purpose that is not compatible with the logic or the possibilities of customs, that is, it is a reform that has no application. If it has, it will be a irregular application Because two things must be taken into account: What does the World Trade Organization do? It has the GATT of 1947, which is the General Agreement on Tariffs and Trade that regulates the international traffic of goods, and it was taken up again in the Uruguay Round. But after the 60s, international services began to appear, transnational companies that offer services to different countries. People began to talk about services that go abroad, but the WTO was clear, in the Uruguay Round, that the traffic of goods is one thing and the traffic of services is another thing, that is why we have a General Agreement on Services and a third agreement on intellectual property rights linked to trade. Three different regulations.
On the other hand, the World Customs Organization has a nomenclature, the Harmonized System, which deals with merchandise, that is, it refers to material, tangible objects, or those that can be measured for export or import. That is why the nomenclature has sections, chapters, headings and subheadings. But no chapter or heading includes services. We are talking about the international instrument used by more than 180 countries. With this framework, how can I ask customs to deal with the import of services if they cannot classify them? Although the law on export rights for services has been passed, these are not actually exported, because exporting means going through the door. Countries also have doors, which are ports, the places of entry and exit for physical objects. An intellectual property right can be downloaded from the Internet, it does not enter through any port or customs… Services, neither… In any of the four modalities of the Services Agreement, services do not cross the border or are dispatched to a place. Customs cannot control the entry of services, they are intangible and invisible. If they are to be taxed, it must be done through internal taxation, not with customs duties that only tax what enters or leaves customs.
Regarding customs legal procedures, do you consider it necessary to reduce the limitation periods to less than 5 years in order to speed up the process?
Since I like history, I studied the Siete Partidas of Alfonso the Wise. The Fifth deals with customs law. There, the statute of limitations was foreseen, which was five years. We continue with five years. When we made the CA, we said that it was an opportunity to reduce it from five to three years. The five-year period is misleading, since there are causes for suspension and interruption. So the periods can be extended if the action of the treasury is suspended or interrupted for some reason. When we sent the CA to customs, they refused because many actions would expire. So, we have to analyze whether the service is efficient, with resources and capable people. In this case, the actions would not expire because diligent and honest agents would respond who would not delay the files. Thus, it could be reduced to three years, with an efficient customs service. There is always the possibility of acts of corruption in the handling and “filing” of files. So, When we talk about limitation periods we cannot separate the human factor. If there is a good customs office, I would be willing to lower it to three years. (deletion) What is at stake is the proper collection of public revenues.
What updates do you suggest to the Customs Code?
First, I suggest eliminating parts that were incorporated into the CA. Decree 618/1997 ended the autonomy of customs; it was a merger by absorption. The head of customs is in the hands of a person who thinks about collection, so what was previously in the DGI because it was normal, is now in an organization above customs, such as the Federal Administration of Public Revenue (the name says it all), but which does not think about trade facilitation but about collecting. This goes against the purpose and operation of a modern customs. Consequently, Decree 618 must be eliminated, returning to the autonomy of customs in the hands of a person who deals with modern customs as it is understood today, which is not about collecting but about implementing all the suspension regimes, such as temporary import, import transit, storage deposit, everything that favors foreign trade in Argentina. And think about facilitating trade to export our products or the entry of those that we eventually need.
What was incorporated into the law must be repealed. art. 10 regarding services and intellectual property.
He too Article 37 referring to customs brokers. Unfair competition was established against them. Customs brokers have training, guarantees, solvency, experience and pass an exam to act. They cannot be replaced by unqualified persons.
With respect to exporting I believe that consignment exports could be incorporated with some special considerations; it is something that is in the country's interest in promoting exports.
In respect of customs legal proceduresThere are texts that have been incorporated in the reform of Law 27.430 that hinder. In art. 1151 of the CA, they imposed an unnecessary preliminary hearing of evidence in the Tax Court, which lengthens the time. In addition, the independence of the Court was affected. For example, with the creation of a General Coordinator appointed by the Executive Branch and with a system of prosecution that does not guarantee impartiality. Nor are competitions guaranteed to appoint members with a specialized jury, both in internal taxation and in customs matters.
The duration of procedural deadlines It cannot be raised theoretically if we do not look at the human element that we have: the judges, the Tax Court and the Chamber of Administrative Litigation. It is clear that the Tax Court has not guaranteed the Members a support at the level of suitable and stable personnel in their positions. The remuneration of the legal secretaries with exclusive dedication is not comparable to those who perform the same task in the Judicial Branch.
What are the challenges of CA from the perspective of a State that has assumed the international commitment to facilitate trade?
Argentina has been able to answer all the questions put to it by the WTO regarding the Trade Facilitation Agreement by setting dates, the most distant of which are 2023. Those for 2021 have already been met. Argentina is among the countries that have not had major difficulties since it has a Customs Code that took into account the Kyoto Convention. We We have no legislative problems with trade facilitationThere are problems with corruption and with the dependence of the customs administration on an organization that is by nature a tax collector such as the AFIP.
Any final thoughts?
There is a serious problem with the 1994 reform of the National Constitution, It has many flaws, such as the increase in the number of senators, but there were errors due to ignorance. This worries me, thinking about our country and the lack of protection it suffers due to the elimination of the possibility of delegation in tax and customs matters.. The constituents did not separate what is tax-based from what is extra-fiscal.l. Customs has taxes that are fundamentally extra-fiscal, because they are not designed to collect but to protect the industry. Protection is provided by measures that allow the tariff to be raised or lowered according to the international situation and the needs of the industry. If they are informed in advance, importers take their measures (they close letters of credit, hurry to import, stock up, etc.), because the legislative process is a process that, being transparent and public, takes time and gives importers and exporters room to adjust to the future increase in tariffs. In no country in the world is the delegation of tariff management to the Executive Branch prohibited; it is enough to look at the Constitutions of Brazil, Chile, Colombia, Mexico, the Tax Code of Bolivia. Also in the United States, the Supreme Court has distinguished: only when customs taxes are merely for collection purposes is there no delegation. One can also see the handling of tariffs in the European Union by the Commission and the Council. Antidumping and countervailing duties are customs duties and require timely and prompt action to be effective. What does Argentina answer to the WTO when it is periodically asked which authority is responsible for imposing antidumping and countervailing duties in its country? Argentina invariably answers: “The Minister of Economy.” These duties are customs duties because they imply the possibility of raising tariff rates. And in such cases, how can Congress be involved? The principle of legality must be made more flexible in customs matters because delegation is essential. Most countries in the world manage tariffs in this way because the different customs measures require rapid execution to be effective.-
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.
