A conceptual proposal for customs fraud

Introduction

The specific objective of this article is to present readers in the legal field with a conceptual proposal for customs fraud. This initiative arises from the absence of a specific definition on the subject. As is known, Brazil opted to use tax legal rules, primarily those contained in Article 72 of Law No. 4.502/1964, to fill this gap. However, these provisions apply only to cases related to tax-related legal acts, that is, tax fraud. The latter refers to the performance of acts intended to deceive the Treasury, seeking to make it appear that the tax act did not occur or, if it did, that the tax owed to the public coffers is lower than it actually should be. Apparently, this legislation does not serve as a legal basis for the classification of customs violations or for the application of customs sanctions. This reflection, without intending to exhaust the topic, merely presents a proposal that will be subject to criticism and evaluation by those interested in the matter (1).

1. Concepts of Law

Within the perspective of the General Theory of Law, it is imperative to recognize that the determining factor of general order in society is harmony in civil life. For a better understanding of the ideas developed here, this must be conceived as a regime of discipline for the activities of individuals in their mutual relations. This is because the concept of civil life is impossible to separate from the concept of society, although within it, the harmonization of the interests of individuals, social classes, and the general interests of the community is presented as difficult.

2. Fraud of the Law

Among the existing theories on fraud against the law, the two that best explain this legal creation are those developed by Manuel Atienza and Juan Ruiz Manero, in the work “Atypical Offenses: On the Abuse of Law, Fraud of the Law, and Misuse of Power”, and by Ángel Carrasco Perera, in the book “Treatise on the Abuse of Law and Fraud of Law”.

For the first two, the concept of fraud against the law is a mechanism to combat legal formalism, based on the axiological gap in the position of norms. The second, on the other hand, understands fraud as a particular form of abuse: the objective abuse of the covering norm or the subjective abuse of achieving indirect ends not covered by the covering norm. It is true that both abuse and fraud itself are nothing more than a form of interpretation of the law.

In a historical overview of the legal meaning of fraud, professors Atienza and Manero teach that the original meaning of the expression fraud It was that of damage, later modified to that of deception. The first conception was constructed in an era prior to Roman law, and the second during the development of the Roman world.

Within this evolutionary process, it was realized that deception could no longer be considered an absolute criterion for establishing fraud, as there might be types of deception that were not capable of constituting fraud. A revealing example of this hypothesis was the association of deception with the characteristics of an object that was the subject of a legal transaction. This error would be legitimate and would not give rise to the condition of fraud, since the failure to understand the meaning would only imply a false understanding of the object. Therefore, there is no fraud.

At that time, another hypothesis was also perceived: the lack of a relationship between deception and fraud according to the law. This perception was supported by practical experience, which showed that fraud was entirely possible without the presence of deception. This was because it became clear that deception in itself did not conform to its strict, subjective meaning.

These perceptions of meaning were instrumental in the construction of the idea that anyone could use valid legal norms as a legal instrument to avoid behavior contrary to the law; that is, it was discovered that it is possible to distinguish human behavior that is contrary to the law from other behavior that intentionally violates the content of the norm, even when it respects normative provisions.

Given the idea that it would be possible to use a valid legal norm to achieve ends contrary to current positive law, the need arose to distinguish between the extensional aspect and the intentional aspect of fraud.

For Manuel Atienza and Juan Ruiz Manero, the first refers to the spheres in which fraud can occur, starting originally from private law and extending to public law. A pause is necessary here, because it is in this extension that the idea of ​​the possibility of fraud in the most varied branches of law resides: whether in procedural law, tax law, private international law, or customs law.

The second aspect addresses the characterization of fraud, that is, whether it is defined objectively or subjectively. Consequently, the underlying question is whether the presence of the agent's intent should be verified objectively or subjectively. In our reality, objectivity has prevailed, in contrast to the Roman world, which started from an objective perspective and later shifted to a subjective one.

The objective conception is troubling because it ignores the fact that the agent misunderstands the meaning of the rule. This error in constructing the interpretation of legal mandates cannot and should not be considered under the objective criterion, since this lawful conduct is solely an error of law and, furthermore, because the neutrality of the investigation is lost. Starting from the objective conception of fraud means affirming that fraud will always occur in cases of divergent interpretations.

In this sense, the attentive reader of what has been written up to this point will have already perceived that the structure of fraud, consisting of apparently regular conduct in the face of the behavior described in the law—the covering rule—that is capable of producing a result contrary to the positive legal system or to a single rule or more than one rule (the defrauded rule), is, at the very least, incomplete for understanding fraud itself. This incompleteness will be explored later in this article.

3.Legislation of some South American countries

Given the absence of a concept of customs fraud in the Brazilian legal system, the author of this article considered it interesting to highlight some legislation from neighboring countries, in order to encourage readers to study comparative law. This approach may be considered challenging, but it can also be welcomed as an opportunity to explore different legal perspectives.

Argentina does not have a specific legal concept for customs fraud. However, there are provisions that penalize certain behaviors that violate customs legislation. The relevant regulations are as follows:

SECTION 24 – Article 864 of Law 22.415, known as the Customs Code, is amended to include the following text: Article 864 – Anyone who: (a) Imports or exports merchandise at times or through places not authorized for such purpose, diverts merchandise from routes designated for import or export, or in any way removes the merchandise from the control that the customs service must exercise over such operations; (b) Practices any action or omission that prevents or hinders the control of the customs service with the objective of subjecting the merchandise to a customs or fiscal treatment other than that adequate for the purposes of its import or export; (c) Presents to the customs service a special authorization, customs license or certificate issued in violation of the legal and specific provisions that govern its granting, with the purpose of obtaining, for the imported or exported merchandise, a customs treatment customs or tax rate more favorable than would otherwise apply.

SECTION 27 – Article 869 of Law 22.415, the Customs Code, is amended to include the following text:Article 869 – Anyone responsible for presenting to the customs service a special authorization, tariff license or certification that is not mandatory shall be sanctioned with a fine of five thousand pesos ($5.000) to fifty thousand pesos ($50.000). Anyone who, being a customs broker, customs transport agent, importer, exporter or any other person who, due to their capacity, activity or trade, could not be unaware of such circumstance and has not acted fraudulently, presents to the customs service a special authorization, tariff license or certification that may result in more favorable customs or tax treatment than the corresponding one, or any adulterated or false document necessary to conclude a customs operation, shall also be sanctioned.

CUSTOMS VIOLATIONS - Article 892: For the purposes of this Code, the term "infraction" is equivalent to "contravention." Article 893: Customs violations are considered to be any acts, deeds, or omissions that this Title sanctions for violating the provisions of customs legislation. The general provisions of this Title apply to cases sanctioned by this Code with automatic fines. In Bolivia, customs fraud is regulated within the criminal sphere and is considered a customs violation that constitutes a customs crime. This crime occurs when there is a decrease or nonpayment of customs duties in customs operations in which the quality, quantity, value, weight, or origin of the goods or services are fraudulently and falsely declared. The legislation that addresses customs fraud is Law No. 2492 on tax offenses.

In Bolivia, customs fraud is regulated by criminal law and is considered a customs violation that constitutes a customs crime. This crime occurs when there is a decrease or nonpayment of customs duties in customs operations, in which the quality, quantity, value, weight, or origin of the goods or services is fraudulently and falsely declared. The legislation regulating customs fraud is Law No. 2492 on tax offenses.

El Article 178 establishes that the crime of customs fraud is committed by anyone who intentionally harms the right of the Tax Administration to collect taxes through the specified conduct, provided that the amount is equal to or greater than 50.000 Housing Promotion Units (UFV) of the value of the taxes omitted for each customs clearance operation.

In Chile, the concept of tax evasion is adopted. The Internal Revenue Service defines it as an action that occurs when a taxpayer fails to file a tax return and pay taxes as required by law. This action may be involuntary, resulting from ignorance, error, or a divergent interpretation of the law in good faith, or negligent, characterized by the premeditated intent to evade the legal provision by using prohibited and punishable means. In simple terms, it involves the voluntary or involuntary failure to file or pay taxes, subject to legal sanctions.

One measure to combat tax evasion is Law 19.738, published on June 19, 2001, which modifies articles of the Tax Code (DL 830) to more fully regulate tax evasion. The objective of this legislation is to help the Internal Revenue Service exercise more effective control and reduce tax evasion.

In Colombia, although there is no precise legal definition of customs fraud, Law 599 of 2000, which promulgates the Colombian Penal Code, includes provisions that penalize this practice. Article 321 deals with Fraud against customs revenues, stipulating that whoever declares customs duties for a value lower than that due by law, in an amount greater than twenty (20) current legal monthly minimum wages, will be subject to a prison sentence of five (5) to eight (8) years, in addition to a fine equivalent to twenty (20) times the undeclared amount in customs duties. The value of the fine may not exceed the maximum amount established in the Penal Code.

The entity responsible for customs regulation in Colombia is the National Directorate of Taxes and Customs (DIAN), a special administrative unit of the Ministry of Finance and Public Credit. The DIAN is responsible for administering and monitoring compliance with tax, customs, and foreign exchange obligations, among others. Its objectives include guaranteeing the fiscal security of the State, protecting the economic order, and ensuring due compliance with tax obligations.

Although the concept of tax fraud is not explicitly defined in Colombian tax regulations, the DIAN maintains that it can be applied based on the principles established in the Colombian Constitution. According to the DIAN, in tax matters, substantive law must prevail over formal law, as established in Articles 338 and 363 of the Constitution, which base the tax system on the principles of equity, efficiency, and progressivity.

In Ecuador, although there is no specific legal definition of customs fraud, customs violations are found in the Organic Customs Law. Instead, the concept of fraud from tax law is used.

According to Article 82 of the aforementioned law, a customs violation consists of the illegal and clandestine international trafficking of goods, or any act of simulation, dissimulation, falsification, or deception that misleads customs authorities with the aim of causing harm to the tax administration, evading the total or partial payment of taxes or compliance with customs regulations, even when the goods are not subject to taxation.

El Article 83 lists the types of customs violations, which include:

a) The entry or exit of goods into the customs territory without the control of the Customs Administration;
b) The loading or unloading of goods;
c) The exit of goods from a means of transport, evading customs control;
d) The change in the condition of the goods between the customs border crossing point and the destination area;
e) The unauthorized use of places, ports or routes not intended for international traffic of goods, except in cases of force majeure or fortuitous event;
f) The abandonment of goods in places adjacent to or close to borders;
g) The sale, transfer or improper use of imported goods with duty-free or exemption from customs duties, without prior authorization;
h) The detention or circulation of foreign goods without documentation proving their legal importation;
i) Failure to submit the total cargo manifest or the detention of undeclared goods on board international transport;
j) False customs declarations regarding the type, nature, weight, quantity, value, origin and provenance of the goods;
k) The falsification or alteration of the documents that must accompany the customs declaration;
l) The substitution of goods for other physical goods;
m) Violation of seals or other guarantees placed on the means and units of transport;
n) The exit of goods from warehouses or temporary depots without complying with customs formalities;
o) The carrying out of unequivocal acts aimed at committing the aforementioned infractions, even when said acts do not materialize for reasons beyond the offender's control;
p) False statements regarding freight and insurance values ​​related to the goods.

These provisions cover a wide range of conduct that may constitute customs violations, providing a legal framework to combat tax evasion and other illegal practices related to international trade.

In Paraguay, the concept of customs fraud is established in Law No. 2422. According to Article 331, fraud is considered to be any operation that, by action or omission, is carried out fraudulently, with or without the collaboration of officials, violating express legal provisions of a customs nature and that results, or may result if undetected, in a loss of tax revenue, provided that the act does not constitute smuggling or another punishable offense.

The types of fraud are specified in Article 332 and include false or inaccurate declarations of taxable income that do not constitute fraud, fraudulent use of facilities granted for the fractional importation of parts of a whole, simulation of compliance with essential requirements for carrying out or concluding a customs operation, and improper use of goods brought into the country with tax exemptions beyond those established by law.

Regarding sanctions, Article 333 stipulates that, in cases of fraud, in addition to the collection of the differential customs duty, the offender and other responsible parties shall be subject to a fine equal to the differential customs duty. This sanction is without prejudice to any other administrative or disciplinary sanction that may be imposed on the offender.

In Peru, the definition of customs fraud is found in the Customs Crimes Law, as well as in the General Customs Law.

In Chapter II, entitled “Tax Evasion of Customs Revenue”, addresses the crime of fraudulent evasion of customs revenues. Article 4 defines this crime as punishable by imprisonment of not less than five and not more than eight years, along with a fine of three hundred sixty-five to seven hundred thirty days in prison. This crime occurs when someone, through customs formalities, using artifice, deception, cunning, or any other fraudulent means:

a) Fails to pay, in whole or in part, taxes, fees, surcharges or any other amount, due to the use of false, adulterated, improper or incomplete documentation or information, in relation to the value, quality, quantity, weight, species, age, condition, origin, brand, code, series, model, labeling, marking or other elements of the merchandise, as well as the improper assignment of the national tariff sub-item.

b) Illegally obtains or enjoys exemption, tax exemption, tax exoneration, incentive, refund, tax benefit, customs benefit or other benefit of any nature improperly obtained through:

i. Use of false, adulterated, incorrect or incomplete documentation or information.

ii. Total or partial simulation of a foreign trade operation.

iii. Overvaluation or undervaluation of goods.

iv. Alteration of the quantity, name, brand, code, series, labeling or marking of the goods.

v. Incorrect assignment of the national tariff sub-item or incorrect declaration of the origin of the goods.

c) Consumes, stores, uses, removes or disposes of goods in transit, transshipment, re-shipment or during their transfer to a free zone, special customs regime zone or special taxation zone, in violation of national legislation.

Customs fraud occurs when the amount of unpaid taxes or improperly obtained benefits exceeds one Tax Unit (UIT). Surcharges are defined in accordance with Article 2 of the General Customs Law.

In Uruguay, as established by Decree No. 145/015 of May 26, 05, Article 2015 defines the customs offense of fraud. According to this article:

1. Any act or omission that, in violation of laws, decrees or regulations, results or may result, if undetected, in harm to the Public Treasury in tax collection or in the granting of economic or fiscal incentives or benefits constitutes a customs infringement due to fraud, provided that the act does not constitute another customs infringement.

2. The penalty for this violation is a fine equal to twice the amount of the tax loss that has occurred or would have occurred as a result of the violation, without prejudice to the payment of taxes, where applicable.

In Venezuela, the term used is tax fraud, not customs fraud. This is defined as any simulation, concealment, deception, or any other form of fraud that misleads the Customs Administration, resulting in unjust enrichment exceeding two thousand fiscal units (2.000 TU) to the detriment of the assets subject to tax collection.

This definition highlights the importance of avoiding fraudulent practices that could harm the tax administration and emphasizes the legal consequences for those seeking illicit enrichment at the expense of the tax system.

3. Reflections: Part One

The study of theories on legal fraud, as presented by authors Manuel Atienza, Juan Ruiz Manero, and Ángel Carrasco Perera, reveals a complex conceptual evolution. Legal fraud is considered a mechanism to combat legal formalism, based on the axiological gap in norms. While Atienza and Ruiz Manero consider it a form of legal abuse, Carrasco Perera understands it as a particular form of abuse related to the interpretation of law.

Historically, fraud was initially associated with harm, later evolving into the concept of deception. However, it was realized that not all deception constituted fraud, and that fraud could exist without deception. These perceptions led to the idea that legal norms could be used to circumvent unlawful behavior, thus giving rise to the distinction between the extensional and intentional aspects of fraud.

Extensional aspects refer to the spheres in which fraud can occur, while intentional aspects address the characterization of fraud, whether objective or subjective. However, the prevalence of the objective conception is problematic, as it ignores errors in the interpretation of standards and can lead to unfair conclusions, such as interpreting discrepancies as fraud.

Therefore, understanding fraud as a seemingly regular behavior that produces results contrary to the legal system requires a more in-depth analysis, considering both objective and subjective aspects.

After examining the regulations of various countries, we can conclude thatCustoms fraud is An illegal practice involving any act or omission intended to circumvent customs laws, regulations, or procedures for the purpose of obtaining unfair advantages, such as tax evasion, obtaining undue benefits, or removing goods from customs control. Although terminology may vary between countries, The essence of customs fraud remains consistent in its fraudulent nature and its detrimental effect on state revenues and the integrity of the customs system.

A comprehensive definition of customs fraud would be: "The illegal practice of manipulating, deceiving, or concealing information related to customs operations, with the aim of evading the payment of taxes or fees, obtaining undue tax benefits, or diverting goods from customs control, resulting in harm to tax authorities and the country's economy."

We can see that customs fraud is a common concern worldwide. Although terms and definitions may vary depending on each country's legislation, the essence of the issue remains consistent: the practice of manipulating or deceiving customs authorities to obtain illegal advantages.

This practice harms not only state revenues but also the integrity of international trade and fairness among commercial actors. Our proposed definition of customs fraud reflects this concern, highlighting the illegal nature of the manipulation of customs operations and the potential harm caused to tax authorities and the economy at large.

Therefore, it is imperative that countries adopt rigorous measures to prevent and combat customs fraud, thereby protecting their economic interests and ensuring fair and transparent trade.

4. Reflections: part two

The study of theories on legal fraud, as presented by authors Manuel Atienza, Juan Ruiz Manero, and Ángel Carrasco Perera, reveals a complex conceptual evolution. Legal fraud is considered a mechanism to combat legal formalism, based on the axiological gap in norms. While Atienza and Ruiz Manero consider it a form of legal abuse, Carrasco Perera understands it as a particular form of abuse related to the interpretation of law.

Historically, fraud was initially associated with harm, later evolving into the concept of deception. However, it was realized that not all deception constituted fraud, and that fraud could exist without deception. These perceptions led to the idea that legal norms could be used to circumvent unlawful behavior, thus giving rise to the distinction between the extensional and intentional aspects of fraud.

Extensional aspects refer to the spheres in which fraud can occur, while intentional aspects address the characterization of fraud, whether objective or subjective. However, the prevalence of the objective conception is problematic, as it ignores errors in the interpretation of standards and can lead to unfair conclusions, such as interpreting discrepancies as fraud.

Therefore, understanding fraud as a seemingly regular behavior that produces results contrary to the legal system requires a more in-depth analysis, considering both objective and subjective aspects.

5.Conclusions

By analyzing the theories of customs fraud, as presented by Manuel Atienza, Juan Ruiz Manero, and Ángel Carrasco Perera, and relating them to international legislation on customs fraud, the importance of a deep understanding of this legal phenomenon becomes evident.

Theories of fraud offer valuable insights into the conceptual evolution and underlying complexities of this practice. Fraud is seen as a way to combat legal formalism, but also as a type of abuse of law or a manipulation of norms to achieve ends contrary to the legal system.

These theories emphasize the distinction between the extensional and intentional aspects of fraud, as well as the importance of considering both objective and subjective elements in its characterization. However, the predominance of the objective conception can be problematic, as it could lead to unfair conclusions and ignore nuances in the interpretation of the rules.

When these theories are related to international legislation on customs fraud, a holistic and adaptive approach is needed to prevent and combat this illegal practice. Legal definitions of customs fraud vary from country to country, but they all share a common concern regarding the manipulation, deception, or concealment of information related to customs operations.

Therefore, it is crucial that countries adopt rigorous inspection, control and international cooperation measures to effectively combat customs fraud. This involves the implementation of clear procedures, development of monitoring technology and exchange of information between customs authorities of different countries.

Ultimately, a solid understanding of the theories of customs fraud and their relationship to international customs fraud laws is essential to promoting fair, transparent, and legally secure trade on a global scale.

(1) This article is the theoretical basis of the books: “Treaty on the abuse of rights and fraud of law” by Ángel Carrasco Perera; “Atypical crimes: abuse of power, legal fraud and misuse of power” by Manuel Atienza and Ruiz Manero; and “Theoria do Estado” by Queiroz Lima. As legislations are consulted on official government sites.

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Highlighted

ATIENZA, Manuel; MANERO, Juan Ruiz. Atypical crimes: over or abuse of power, legal fraud and misuse of power. Marcial Pons, 2014.

QUEIROZ LIMA, Eusébio. of State Theory. 1930.

PERERA, Ángel Carrasco. Treatise on the Abuse of Law and Fraud of Law. Civitas, 2016.

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