Disputes With Custom Authorities





Under the Ukrainian Customs Regulations, the local customs authorities require to complete a customs declaration for inward clearance prior to arrival at the port. The customs declaration shall contain all items on board, including goods, materials, spare parts, bunker quantity, paints, medications, etc. The list of mandatory items to be declared is not clear enough and this results in significant problems with Customs Authorities when some items are not declared properly. Misdeclaration of items onboard is a serious problem and entail a delay in ship sailing and confiscation or fine imposing on the Shipowners. Case study Upon arrival at the port, the Customs Authorities conducted an inspection onboard and found undeclared lubrication oil in drums in the engine room. Despite all explanation that lubrication oil in drums is necessary for vessel and it is part of vessel consuming materials, the Customs Authorities made a protocol on confiscation of seized undeclared goods or its custom values and passed the case materials to the local court for consideration. We were notified about this case and visited the ship before sailing. We discussed the matter with the Master and the Chief Engineer and obtained their statements that the lub oil in drums is necessary for proper technical maintenance of the vessel and its seaworthiness. We prepared the power of attorney from the Master duly signed and stamped. We negotiated the case with the Customs Authorities and convinced them not to detain the ship in exchange of providing the Letter of Guarantee used by the agent to pay the custom values of goods in case of issuance negative court judgment and vessel sailed without delay. We attended the hearings, submitted the power of attorney issued by the Master along with the Master’s and the Chief Engineer’s witnessing statements and proved that lub oil was necessary for vessel current technical maintenance and repair and requested that the Customs Authorities decision on confiscation should be canceled. The court accepted our explanations and issued a judgment on releasing the sized items and did not impose any fine on the Shipowners.



Result



Due to the involvement of legal P&I Correspondent, the vessel sailed without delay, no fines were imposed on the Shipowners, and we proved that the Custom Authorities demands should be rejected. Meanwhile, this case shows the importance of ensuring that customs declarations should be accurate. If any doubts, the shipping agent at the port or P&I Correspondents in the port of call should be contacted for relevant advice and assistance.



P&I Correspondents recommendations:



  • • Immediately hire P&I Correspondent to avoid further complications.
  • • Stay in touch with the shipping agent as a matter of urgency and ask the shipping agent to assist the Master to complete the customs declaration properly, and make corrections and/or amendments, if needed.
  • • Stay in touch with the Master and the Chief Engineer and obtain all necessary information about the Custom Authorities demands and possible solution, such as provide the Letter of Guarantee from Legal P&I Correspondent or agent in order to release the vessel as soon as possible.
  • • Send updates and inform the Customs Authorities about our presence in this case.
  • • Collect all evidence, customs declaration, manifests, protocol, list of undeclared items, their characteristics, and usage onboard.
  • • Discuss the situation with the Master and the Chief Engineer before the vessel sailing, obtain their witnessing statements referring to the reasons for non-declaration or incorrect customs declaration.
  • • Prepare and obtain power of attorney for the court (bilingual wording in two columns: in Ukrainian and English) signed by the Master and certified by ship stamp.
  • • Attend the court and explain your legal position to the judge and prove that undeclared items are necessary for proper technical maintenance of the vessel and its seaworthiness.


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