HOW MANY PENALTIES CAN RESULT FROM ONE ERROR?

In one of our articles, we asked “Legislation or implementation?”. Actually, our answer is very simple: Both. Just as a bad script would not result in a good movie, an unclear legislation would not result in a good implementation. In this article, we will express an example that is frequently experienced but where both the legislation and the implementation are faulty. Of course, it is again about customs procedures.

When it rains, it pours.

You are a businessman engaged in the automotive spare parts business. You have a decent business volume, and you are a reliable company. You have documented your reliability, financial competence and quality, and as a result, you have received an Authorized Economic Operator Certificate (AEO or YYS in Turkish). 

You ordered a container of spare parts. There are 150 different types of goods in the container, in other words,  150 different types of HS-Codes. In addition to the cost of the goods and insurance, you paid a freight fee of $1,500 to the shipper. You have completed the customs procedures, paid the taxes and realized the import. Everything is as usual until here.

However, the shipper subsequently invoiced an additional $150 for freight and you paid this amount. In accordance with the Customs Law, if there is a price that must be added to the customs value, even if it is later, the customs duty that must be declared and paid for this price, the VAT related to the sum of the price and the taxes paid, and the SCT, if any, must be paid. If we continue with our example, since 150 different types of spare parts are declared as 150 lines (items) in the customs declaration, taxes are calculated separately for each item. This is because the tax rate for each item is not the same. Assuming that the tax of each item is 1 ₺, the tax calculation is made as 150X1 ₺= 150 ₺, not 150 ₺ for the value difference of 150 $. There is no problem in paying taxes, but things get complicated when it comes to fines.

178.650 ₺ penalty for 150 ₺ missing tax

You forgot to declare the additional freight to customs. We told you that you are an AEO company. You were subsequently inspected and the inspector found that $150 of freight was paid in the accounting records and that it was not declared to customs. According to Article 234 of the Customs Law, if there is a tax difference as a result of under-declaration of customs value, the missing tax is collected, and a fine of three times this tax is imposed. Assuming that a tax of 1 ₺ should be paid for each type of spare part in return for the $150 paid later, you expect me to say that a tax of 150 ₺ and a fine of three times 450 ₺ should be paid, right? No, not 450 ₺, you have to pay a fine of 178.650 ₺!

But why? According to the Customs Law, even if it does not result in a negative consequence, a penalty that we can call simple irregularity in Article 241/1 of the Customs Law is applied for behavior contrary to customs legislation. Since underpayment of tax is also a violation of the legislation, the penalty cannot be less than the simple irregularity penalty. The simple irregularity penalty is applied as 1.191 ₺ for 2025. Following this provision of the Customs Law, 450 ₺, which is three times the tax underpaid with the declaration, is not applied. The penalty of 3 ₺ for each item is applied as 1.191 ₺. Because each item is considered as a separate declaration. Therefore, a fine of 178.650 ₺ is applied to the importer for underpaying 150 ₺ tax.

What is the offense? Not declaring the value or underpaying tax?

The procedural provisions of administrative fines imposed in our country are regulated by Misdemeanor Law No. 5326. Therefore, the Law on Misdemeanors also applies to the fines under the Customs Law. According to Article 15 of the Law on Misdemeanors; “If more than one misdemeanor is committed with one act, if only an administrative fine is stipulated in the definitions of these misdemeanors, the heaviest administrative fine shall be imposed.”, “If the same misdemeanor is committed more than once, an administrative fine shall be imposed separately for each misdemeanor.” Therefore, the main issue is whether the act has been committed once or 150 times. Two different perspectives emerge here;

1- The offense is the failure to declare the additional freight, so the offense is single.

2- The offense is underpayment of tax, i.e. underpayment of tax on each item separately, so the offense is not single.

Although the customs administration prefers the second way with the motive of obtaining public revenue, in my opinion, in accordance with the principle that a single penalty is applied even if more than one misdemeanor is committed with one act, a penalty should be applied on a declaration basis.

In the case of an irregularity penalty that does not cause tax loss due to an act, a single penalty is applied for the declaration regardless of the number of items, whereas, in the case of tax, a penalty is imposed for the number of items. This alone shows that different practices are applied for the same type of administrative action.

How many penalties can result from one error?

According to the Law on Misdemeanors, the imposition of an administrative fine does not require intent on the part of the person. “A misdemeanor may be committed with an act of commission or omission.” However, “participation in a misdemeanor requires the existence of a willful and unlawful act”. In other words, for a fine to be imposed on a person for participation, it is mandatory to prove that the participant committed the act intentionally. The Ministry of Trade has a detailed regulation on this issue.

Although it is not a general practice, some customs directorates also impose fines on customs brokers without investigating the existence of the element of intent. In such a case, the amount of the fine, which is the subject of discussion, is doubled. 

Who says you can't get two penalties from one error? Just don't be persecuted by the legislation, otherwise you will see hundreds of pelts coming out.

It is understandable to impose penalties on an item-by-item basis for a different action for each item, but we believe that imposing penalties on an item-by-item basis for the act of under-declaration of freight (single act) does not coincide with the will of the legislator.