When Customs “Knows Better”: How an Importer Can Defend Customs Value in Court

Under conditions of martial law and prolonged economic turbulence, foreign economic relations are of critical importance for Ukraine. Imports are not only about supplying the market but also about ensuring the functioning of entire sectors of the economy. At the same time, it is precisely at the stage of customs clearance that businesses increasingly face situations where, while formally complying with the requirements of the Customs Code of Ukraine, they are forced to accept additional financial burdens due to the position taken by customs authorities.

The key point of conflict is usually the customs value of goods. The law clearly stipulates that customs clearance begins with the submission of a declaration and documents confirming the declared customs value. If such documents contain all the necessary numerical data and allow the declared price to be verified, the customs authority is obliged to apply the primary method for determining customs value — based on the transaction value.

However, in practice, importers increasingly encounter a different scenario: without proper justification, customs authorities refuse to apply the primary method and instead resort to secondary methods — based on the value of identical or similar goods, often relying on previous imports or abstract reference data. The result is a refusal card and a decision to adjust the customs value upward.

Documents Are Submitted, but “Doubts Remain”: Typical Customs Logic

A practical case that became the subject of judicial review is illustrative. A large importer of agricultural fertilizers, operating for many years and carrying out regular imports, submitted a customs declaration together with a full set of documents: the contract, invoices, transport and insurance documents, certificate of origin, export customs declaration, and expert opinions.

Despite this, the customs authority raised a number of objections — ranging from the “absence of confirmation of packaging costs” to doubts about the legibility of the seller’s stamp and discrepancies in document dates. Some of these objections were based on factual errors by customs officials (references to non-existent clauses of the contract), while others relied on evaluative wording such as “may indicate”.

Acting in accordance with Article 53 of the Customs Code, the declarant provided additional explanations and documents, clarified technical inaccuracies in detail, confirmed that packaging costs were included in the price by submitting a letter from the manufacturer, and corrected discrepancies in the identification of the contract. No substantive response was received from the customs authority. Instead, the process ended in a predictable way: a refusal card and a decision on customs value adjustment, which essentially duplicated the initial customs notice without analyzing the explanations provided.

In order to release the goods, the importer was forced to use the mechanism provided for in Part 7 of Article 55 of the Customs Code and pay more than UAH 10 million as security for customs payments.

Court Proceedings as the Only Effective Tool

Administrative appeals are formally possible, but in cases of this nature, judicial protection remains the most effective mechanism. In its statement of claim, the importer convincingly demonstrated that all documents submitted together with the declaration and subsequently provided allowed verification of the customs value; that there were no objective grounds to refuse the primary valuation method; and that the customs authority’s objections were evaluative or plainly erroneous.

The court emphasized a fundamental point: the customs authority did not substantively refute the importer’s arguments, but merely repeated the wording of its own decision and general provisions of the Customs Code. Such an approach does not meet the requirements for reasoned decisions by public authorities. As a result, the court declared the refusal card and the customs value adjustment decision unlawful and annulled them, ruling in favor of the business.

Key Takeaways for Importers

This case once again confirms that customs authorities do not have discretionary power to ignore the primary method of customs valuation at their own discretion when proper supporting documents are available. Formal doubts, assumptions, and template language cannot serve as grounds for multimillion-dollar additional charges.

For businesses, the key factors are documenting every stage of communication with customs authorities, providing explanations exclusively in writing, and being prepared to pursue judicial remedies.