Relevant topics

2016 April 21

Export dues in customs’ hand

Before the norms are approved officially for bunker consumption by ships, Russia’s Far Eastern Customs carry out an audit and charge bunker suppliers for taking on “excess” fuel. The amount of fuel stored in excess of the norms is calculated on their own.

No cargo – no stores?

Amid the federal budget deficit the state paid attention to the bunkering as a source of its replenishment. As far as in August 2015 RF President Vladimir Putin stressed the need to deal with exports of oil products registered as marine stores and causing significant underpayments to budget. “There has been no progress on such an important matter as the prevention of illegal exports of petroleum products during bunker loading”, he said.

Therefore, RF Transport Ministry in conjunction with the Federal Customs Service of Russia elaborated the draft decision of the Eurasian Economic Commission on determining the amount norms for bunker fuel transported by vessels as store. The Federal Customs Service developed risk profiles providing for measures on enhancing the control of bunker fuel exports in compliance with formulas submitted to the Eurasian Commission. 

Before the norms are approved officially, Far Eastern and Central Energy Customs exercised their right and checked some previous transactions on bunker fuel, including those of SC Pavino Ltd, Agrotek-TM, Niko Bunker.

Court proceedings involving Agrotek-TM and Central Energy Customs have already reached the Supreme Court which remitted the case for a new investigation. The point relates to bunkering of the PETROHUE with 4,836 t of heavy fuel oil in November 2012. The Customs says no loading/unloading operations were carried out within the Customs Union and the ship called the Russian port only for bunkering. The claim amount to the bunkering company exceeded RUB 40 mln. According to the Supreme Court ruling, absence of loading/unloading operations as it is does not constitute grounds for imposing export dues on fuel. It should be proved that the amount of fuel taken on exceeds the amount needed for the voyage.

In early 2015, inspections carried out by Nakhodka Customs involved Far East bunkering companies including SC Pavino which also appealed to a court. In a year the Court of the Far East came to a similar conclusion on no link between the stores and the loading/unloading operations.

Customs' mathematics

The court practice described above showed that settling of such disputes is based mainly on good reason behind the amount of oil products taken on board, not on carrying or non-carrying of loading/unloading operations. There are alternatives here as no methods for estimation of required amount of fuel are available so far. 

In this context, customs commenced applying their own method for foundation of their claims to bunker suppliers from the beginning of 2016. On their own they calculate the amount of stores needed for a vessel. In the opinion of the customs, the excess fuel should be liable to export dues.

The Far Eastern Customs comments for IAA PortNews: supply of bunker fuel as stores at the ports of the Far East carried out without any quantitative limits, control of vessels’ tasks or routes results in considerable losses of the federal budget. “Calculation of sufficient amount of bunker fuel depending on the route is made by the customs on the grounds of cl. 1 of Article 163 of the Customs Code of the Customs Union. The calculations are based on the documents and data obligatory for providing when arriving to / departing from the customs territory of the Eurasian Economic Union (sub-clause 2, cl. 1 Article 159 of CC CU)”. 

The Far Eastern Customs also emphasized that “customs control in respect of the mentioned stores (bunker fuel) will be carried out on a regular basis in compliance with the customs legislation.

A decision on carrying out customs control in respect of bunker will be based on a selective approach and on availability of information (data) about companies carrying out bunkering of vessels, FEC explained.

Industry representatives say this practice does not take into consideration many factors influencing the consumption of fuel (like weather, emergency situations, fuel quality etc).

If customs in other regions of Russia take over the experience of their Far Eastern colleagues, many bunker suppliers may face problems.

Vitaly Chernov