1. Introduction
On October 19, 2023, a judgment was issued in the case "HELM ARGENTINA SRL (TF 35233-A) v. DGA s/ DIRECT APPEAL BY EXTERNAL AGENCY", File CAF 022902/2023.
Amidst the praise and celebrations of some voices specialized in customs matters, I must raise my voice in protest regarding the decision of the Court of Appeal.
Indeed, the ruling appears to be a “return to the principles” of customs import valuation, as it would seem to apply the Agreement on Value Added Tax (GATT), according to its letter and correct interpretation.
In the following paragraphs I will explain some of the reasons why, contrary to most of the specialized doctrine, I understand that what has been resolved only delays.
2. Case details
The case discusses the valuation of imported goods between related companies, that is, between companies that "do not deny being related under the terms of Article 15 of the GATT Agreement."
Basically, they maintain that there is a link but that this link does not influence the import price of the goods.
In this context, the first thing to note is that the grounds for the customs service to adjust the declared customs value of the imports in question were contained in the value study carried out by the Division of Associated Companies (a fact that was not questioned, so it can be taken as a comparable precedent). And in this special context, the importer had two opportunities to demonstrate - with comparable precedents - the true value of its operations. It did not do so.
Therefore, placing the burden of proof of the value on Customs, the CAF Chamber IV reverses the judgment of the Tax Court.
3. Who must prove the import value in cases of related companies?
The import value, in general, should be certified by Customs.
There is no doubt about it. But: does the generality apply to the case? … let's see:
The sentence says: “(…) on this last condition of acceptability, Article 1.2 of the Agreement expressly states that: (a) “in determining whether the transaction value is acceptable for the purposes of paragraph 1, the fact that there is a relationship between the buyer and the seller within the meaning of Article 15 shall not in itself constitute a sufficient reason for considering the transaction value unacceptable. In such a case, the circumstances of the sale shall be examined and the transaction value shall be accepted provided that the relationship has not influenced the price (…)”. (page 13, back of the judgment); this implies recognizing that the Agreement, at least up to this point, has not imposed any burden of proving value on the Customs, but has only established that the Customs will accept the value only (or under the condition that) the link did not influence the price, taking into account, for such purposes, the “circumstances of the sale” (which of course includes considering the link that is proven, by whatever means, that it is proven).
However, the GATT Value Agreement itself (reasoning contained in the judgment itself) provides the specific exception for “cases of connection” (proven, or expressly recognized, as in this case) when it indicates “(…) “In a sale between related persons, the transaction value shall be accepted and the goods shall be valued in accordance with the provisions of paragraph 1 when the importer demonstrates that said value is very close to one of the prices or values indicated below, in force at the same time or approximately: (…)” (page 13 back of the sentence).
That is, it is the Agreement itself (reproduced in the commented sentence) which clarifies that, If there is a link, the declared value will be accepted. "when the importer demonstrates that said value is very close to any of the prices or values indicated below, in force at the same time or at an approximate time (…)"; and this leads to the need to recognize that, in this case, a case in which the link was expressly admitted, Customs did not have the burden of proving the import value, but rather said burden (evidentiary) was transferred - by express provision of the Agreement - to the importer.
This reasoning is deduced from a careful reading of the judgment; there is no need to look at any other instrument than the judgment itself being analyzed, a situation that, in the opinion of the writer, makes it a contradictory judgment (it says what it then steps down).
4. What would be a sound interpretation of the Agreement?
The GATT (valuation) Agreement is set in a broader context, the context of constitutional and/or conventional rights and guarantees.
And the right of defense also projects onto the State and the functions that the State is responsible for.
Thus, in order to prevent the (hard) law from affecting rights of constitutional origin (higher), it cannot be interpreted as it has been interpreted, making it necessary to soften the burden of proof of the import value in special cases, in which the importer is in a better position to prove.
The tool that both Customs and the Judge have to achieve this, to match and equalize weapons, is simply to use the “dynamic burdens of proof.”
Yes, in the procedure before Customs and the Tax Court it was demonstrated (since the reports demonstrating the existence of comparable prices were not ignored) that the merchandise was imported at a different value… and the importer was given the opportunity to justify the value, and he did not do so, the adjustment is correct.
The system of dialogue of sources (art. 3 of the CCyC), applicable to the Judges of the Chamber of Appeals in Administrative Litigation, puts in check the "simple subsumption in the norm" and allows many conventional and constitutional principles to be projected towards customs administrative procedure, contributing enormously to the administrative procedure truly seeking the material truth.
The system is circular and coherent, the provisions complement each other and do not conflict with each other. Therefore, the application of the Agreement (GATT) that harms the right of defense of the Treasury and/or prevents it from exercising its functions, asking it to prove "what it is not in a position to prove" and, on the contrary, the importer "is in a better position to prove", implies, plain and simple, endorsing a biased view of law in general, which goes against the rails that law follows today, as I explained, in general terms.
Indeed, the law has long since begun to apply the “dynamic burden of proof”, emphasizing that it is not only consistent to apply the general principle - that whoever alleges a fact must prove it - but that it must also stop and embrace the idea that the party that does not have a certain proof cannot be required to actually provide it... under the pretext of giving reason to someone who does have it (or should have it) and avoids providing it because that position benefits him.
5. Procedural problem of the sentence
Furthermore, the judgment of the Fourth Chamber of the CAF, in the opinion of the undersigned, suffers from another unavoidable defect.
The fact is that the ruling of the Honorable Chamber is not a first pronouncement on the subject, but rather it is reached through the "route of appeal", with all that this implies.
The Supreme Court of Justice has recognized the power of Administrative Judges to “say” the law, although, of course, always safeguarding the possibility of appealing the administration's decision before the Court (doctrine of “sufficient judicial review”).
No one doubts that the aforementioned doctrine was consolidated in Argentine law within the framework of the cases entitled “Fernández Arias” (CSJN, 1960, “Fernández Arias, Elena and others”, Fallos: 247:646) and “Ángel Estrada” (CSJN, 2005, “Ángel Estrada y Cía. SA”, Fallos: 328:651) and that, in its evolution, ultimately, it was always based on the premise that (1) administrative activity is a valid legal activity (art. 1 of the CN) and (2) that legal activity is susceptible to “judicial control” (art. 18, 75 inc. 22, 116 of the CN).
The customs procedure, which has not been declared unconstitutional to date, fits perfectly into this theoretical and jurisprudential framework.
The Argentine Customs Code approved by Law 22.415 (Official Gazette 23/03/1981) regulates the (regulated) procedure for challenges in its arts. 1053 to 1067; a procedure that is also integrated with general provisions applicable to customs procedures in general (arts. 1001 to 1052 of the same Code) and also with the provisions of supplementary application, by virtue of art. 1017 (in the case of challenges, Law 19.549 and its Regulatory Decree 1759/1972 are applied supplementarily -to a large extent).
In this way, the additional charge imposed by Customs - based on a difference in import value (art. 9, section 2) inc. d) of Decree 618/1977) - can be challenged (or paid and repeated) and within the respective procedure (in this case the challenge procedure) all the evidence that will lead to an administrative customs resolution must be produced (with the import valuation being evaluated within the framework of this administrative challenge procedure, applying the GATT value agreement).
In this procedure, the taxpayer has the opportunity to offer all the evidence that he intends to use and, subsequently, the administrative decision of the Customs (which in this case confirms the customs charge) may be “reviewed” before the National Tax Court (through the “appeal route” of art. 1132, Section 2 of the CA).
In this way, in the procedure before the Tax Court, it is again revise the legality of the administrative customs resolution that determined the import value for the purposes of applying taxes, especially keeping in mind that art. 1145 of the CA establishes that “(…) Except in the case of sanctions and without prejudice to the powers established in articles 1.143 and 1.156, no evidence may be offered that has not been offered in the corresponding procedure before the customs service, with the exception of evidence on new facts or that necessary to refute the result of better provision measures ordered in the administrative headquarters. (Paragraph replaced by art. 19, paragraph 5) of Law No. 25.239 BO 31/12/1999. Entry into force: as of January 1, 2000.) (…)”. And all of the above means that, at least in the matter of challenges and repetitions (since art. 1145 of the CA leaves out the assumptions of sanctions, that is, infractions), there is a limit as to the evidentiary activity (no more evidence may be offered than that offered in the corresponding procedure before the customs service). This limit is insurmountable for the Administered and can only be surpassed by the Honorable Tax Court of the Nation, as an administrative court that check out customs jurisdictional activity, as long as the system safeguards the broad powers of the Tax Court expressly established (in customs matters) in articles 1143 and 1156 of the CA.
In this way, the principle of administrative law that requires the search for “material truth” is reconciled (in close conjunction with the principle of ex officio instruction of the administrative procedure, in accordance with art. 1 subcs. a) and f.2) of law 19.549 and its Regulatory Decree 1759/1972, applicable to all actions before an administrative court, independently of the supplementary application provided for in art. 1174 of the CA for the case of the procedure before the Tax Court).
After this much needed disaggregation, I understand it is superior to arrive at a conclusion: what is related to "the proof" of the customs valuation in tax matters (challenges and repetitions, as opposed to infractions) must be reliably accredited in the process before the General Directorate of Customs and the Tax Court will exercise a control (review) of the conclusions, understanding through the appeal route (not a new trial) that it will be broad, as it has the power to seek the material truth independently of what is alleged by the parties (art. 1143 of the CA).
It is insisted that the taxpayer cannot offer evidence other than that offered in the procedure before Customs (which may well be classified as a primary administrative procedure), and only the National Tax Court (ex officio) can incorporate (unofficially) new evidence.
I am not unaware that there is a broad range of evidence in the procedure before the National Tax Court, but it is no less true that the evidence should have (generally speaking) been offered in the admiration procedure before Customs, a circumstance that is reinforced by the provisions of art. 1034 of the CA (which specifically requires legal representation in the procedure before Customs when legal issues are raised or debated, which ensures a broad right of defense, which includes professional advice not only as to the underlying issue debated but also as to the ways to assert the procedural claim).
Based on the above, the decisions of the National Tax Court in the cases analyzed (I am referring to challenges and retrials) can be appealed under the terms of arts. 1171, 1172, 1173, 1180 and 1182 of the CA.
Once again, it is worth noting that this is not a “new process”, but rather a review of what has been resolved, this time, by the National Tax Court (I insist, let us keep in mind that one reaches the Administrative Litigation Chamber through the “appeal route”, not through a new lawsuit, a new process).
And art. 1180 of the CA establishes that the Honorable Chamber may (1) if there is a manifest violation of the legal forms in the procedure before the Tax Court, declare the nullity of the actions or resolutions and return them to said Court with a warning, unless, taking into account the nature of the case, it deems it more convenient to open them to evidence in that instance; or (2) resolve the merits of the matter, considering the conclusions of the Tax Court on the proven facts as valid. And that it may also depart from them and order the production of evidence when, in its opinion, the records of the records authorize to suppose that the judgment has incurred an error in the assessment of the facts.
This implies that the appeal to the Chamber provides for a “limited review” of the judgment of the National Tax Court and that, if there is a manifest violation of the legal forms in the procedure before the Tax Court, it must declare the nullity of the actions or resolutions and return them to said Court for a new ruling or, that it may depart from the proven facts (exceptionally) and order the production of evidence when, in its opinion, the records of the files authorize to suppose that the judgment has incurred an error in the assessment of the facts.
However, art. 1180 of the CA in neither of its two paragraphs allows the Honorable Chamber to deviate from what the Tax Court of the Nation considered proven, taking a different position.
The Court must consider as proven what the Tax Court considered proven (in this case the majority vote) and, if it considers that there is a manifest violation of legal forms, or assumes that the judgment has incurred an error in the assessment of the facts, declare the nullity of the actions or resolutions and return them to said Court (in the first case) or order the production of other evidence... but what it cannot do is review questions of "fact and evidence" reviewed by "two" previous administrative instances (procedure before Customs and before the Tax Court).
The jurisprudence has said “(…) the system of constitutional guarantees of the process is oriented to protect rights and not to harm them: hence the essential thing is that justice rests on certainty and security, which is achieved with justice according to law, which subordinates the judge in the concrete, respecting the formal limitations without making the form prevail over the substance, but without forgetting that the essences are also realized in the forms (Rulings: 315:106 and 329:5903)” (Becerra, Juan José v. Calvi, Juan María and others s/compliance with contract, judgment of 07/07/2015, Rulings: 338:552).
It is therefore clear that the Court of First Instance has deviated from the legal procedure established by the Customs Code, thereby affecting due process (customs), a circumstance that invalidates the judgment issued as a jurisdictional act, as well as establishing itself as an arbitrary judgment.
If the rules that regulate the action of justice are not to be respected, we would be faced with a monarchy of judges, a circumstance that forces us, as a Republic, to demand that the provisions be respected not only in substance but also in form (procedural).
Not in vain has the jurisprudence of our highest Court stated, in tax matters (analogous on this point), that “(…) Although the provisions of art. 86, paragraph b, of Law 11.683 - insofar as it grants a limited character to the review of the chamber and, in principle, excludes the judgment of the Tax Court regarding the factual aspects - do not constitute an absolute rule, the chamber must depart from the conclusions of the aforementioned jurisdictional body when they present manifest deficiencies (…)” (Ortolani, Mario -TF 7079-I- c/ DGI, ruling of 16/08/2005, Rulings: 328:3048).
The decision of judges that ignores the applicable procedure is a distortion of the law that is often easily accepted today, arguing that in this way justice prevails as the supreme value.
This is not the case; due process requires us to respect the rules of substance and also of form, and in doing so, the conclusion (what was resolved) may vary substantially.
6. Critical opinion
For the reasons stated above, I believe that the law should make its way towards justice, but without shortcuts.
A ruling is being held which, in these points, has violated not only the letter of the Agreement on Value Added Taxes (GATT) but, what is worse, also the customs process (due process).
What will happen when the Court reviews questions of fact and evidence that are favorable to the defendant? Will we also celebrate the fact that the limited review of the sentence becomes a dead letter?
I conclude then that the judgment in question significantly sets us back and brings us closer to the customs law of the past, going against the new trends in law (e.g. application of dynamic burdens of proof).
Customs law is law, it is part of law, it is not a “rara avis”. And anyone who understands law concludes that it is healthy to ask “who is in a better position to prove what?”…
It should be added to the above that if the dynamic burdens of proof have been applied to the infringement ("MALTERIA PAMPA SA c/ DGA s/ RECURSO DIRECTO DE ORGANISMO EXTERNNO (TF 35123-A)", file 44028/2019 of Chamber III) … then: how much more should they be applied in the context of a discussion linked to the payment of obligations (taxes), in which no penalty is imposed?
We have a repressive (penal) system, sometimes based on objective responsibilities... and we expect that in a case where taxes are determined, these cannot be applied, even when there is a recognized link? ...
And what does this way of thinking lead us to?
The ruling seems to encourage the worst of the customs valuation of the past, which demands too much from the customs administration, so much so that, if the criteria of this ruling are maintained, it will practically not be able to adjust the import value in any case.
And this, in my humble opinion, does not represent progress for customs law, but rather significantly sets it back.
Lawyer (UBA), Customs Law Specialist (ECAE PTN), Customs Management Specialist (UNLaM), and Researcher (ECAE PTN). Professor of undergraduate and graduate customs law, member of the AAEF, IAEA, and the Customs Law Institute (CPACF). The opinions expressed in this publication are the author's own, technical, and should not be considered the opinions of any institution to which the professional is affiliated.
