The Evolution and Disproportionality of Customs Penalties

The concept of customs penalties, customs misdemeanors or customs offenses refers to judicial or administrative sanctions for violations of the legislation in customs operations and procedures. Currently, customs offenses are judicial sanctions, while customs misdemeanors or customs fines are administrative sanctions.

The EU Customs Code does not include penalty provisions. In other words, there is no common EU practice on customs fines. Therefore, the fines in the Customs Law were determined by the traditional and national needs of our country, not due to harmonization with the EU Customs Code arising from the Customs Union.

Nevertheless, dividing the penal provisions applied in customs as pre- and post-Customs Union would not be wrong.

Evolution of punishments

Prior to the Customs Union, customs-related penalties were regulated by the Law No. 1918 on the Prevention and Suppression of Smuggling, which is a special criminal law, and administrative fines and the procedural and enforcement provisions regarding these fines were regulated by Customs Law No. 1615. There were areas of conflict in the implementation of these two penalties, which generally had similar provisions. Conflicting areas were managed either through the application of both laws or through subjective evaluation and administrative decision-making. The main element taken as a basis here was whether there was an element of intent. If it was found that there was intent for the same act, a criminal complaint would be filed with the Chief Public Prosecutor's Office, and if it was concluded that there was no intent, a fine would be imposed by the Customs Law. However, in the event that no conclusion could be reached or the discretionary power was abstained from being used, the provisions of the two laws were applied at the same time on the grounds that intent could be determined by the judicial authorities, and the fine imposed under the Customs Law was taken into custody.

In 2003, the smuggling offenses were liberalized by adapting them to the conditions of the day. The Law No. 1918 was repealed and the Anti-Smuggling Law No. 4926 was put into force. After the revision of the Turkish Penal Code and the separation of crimes and misdemeanors and the enactment of the Law on Misdemeanors No. 5326 dated 30/3/2005, Law No. 4926 had to be revised again according to this new state of affairs. This revision was made with the Anti-Smuggling Law No. 5607 dated 21/3/2007 and the acts were separated into crimes and misdemeanors and the Anti-Smuggling Law No. 4926 was repealed.

Disproportionality

This time, both the Anti-Smuggling Law and the Customs Law have regulated penalties for misdemeanor acts. While the Public Prosecutor decides on the fines imposed according to the Anti-Smuggling Law, the customs administration supervisor now decides on the fines imposed according to the Customs Law. These decisions are now subject to appeal by the judicial judiciary in one case and the administrative judiciary in the other. Moreover, the definition of the same act was similar in both laws. 

This problem was partially solved with a regulation introduced in 2013. Misdemeanors under the Anti-Smuggling Law were transferred to the Customs Law and became the field of application of a single authority. However, during this transfer, the amount of the fines were not revised by the structure of the Customs Law, nor was the amount of the fine reduced, and new administrative sanctions were added. Since the element of intent was also removed, there were criticisms and complaints that the penalties were not mitigated, on the contrary, they were aggravated. This complaint continues to this day.

As of today, the same act related to customs procedures can still be a misdemeanor under the Customs Law on the one hand and a smuggling offense under the Anti-Smuggling Law on the other.

Customs misdemeanor offenses are usually met with a monetary sanction. However, this monetary sanction is not a “judicial fine”, which is a criminal law sanction, but an “administrative fine”, which is an administrative sanction. An administrative “fine” may serve as a warning, as well as the purpose of eliminating the damage caused to the public. Therefore, it is more appropriate that the administrative fine is essentially a multiple of the underpaid tax. 

Penalties that cause tax loss are the penalties to be applied in cases where tax loss occurs as the result of the act committed. For example; the value of the goods is declared as lower than the real value and as a result of this declaration, the tax is under-assessed. Penalties that cause tax loss are generally regulated as multiples of the under-collected tax. An example of this is the regulation stating that “three times the amount of the taxes are penalized”. 

However, regardless of whether there is tax loss or not, in cases where the import or export of the goods is subject to prohibition or restriction and the act committed exceeds this prohibition or restriction, the amount of the penalty is determined in multiples of the customs cleared value, not the missing tax. Sometimes, even in cases where the goods do not comply with the declaration, a penalty based on the customs value is imposed. In general, these penalties are the ones that are criticized in customs legislation as being disproportionate to the penalty imposed in response to the act. It is worth noting that these penalties are generally the penalties transferred from the Anti-Smuggling Law to the Customs Law.

International Agreements

In international customs practices, the measure to be taken as a basis for determining customs penalties is taxes on goods. This is because the customs offense is constituted by actions to avoid paying taxes. This principle has been violated since the misdemeanor acts included in the Anti-Smuggling Law were removed from this law and regulated in the Customs Law since the penalty provisions were not amended. In determining the amounts of some of the penalties in the Customs Law, the customs cleared value, which includes the value of the goods themselves, is taken as the basis, not the amount of tax. As stated above, this situation has led to the disproportionality of the penalty applied to the act.

When the following two regulations are read in this regard, it reveals that our practice is not in compliance with international law:

- “Amendment Protocol to the International Convention on the Simplification and Harmonization of Customs Regimes”, which was ratified by Law No. 5426 dated 28.10.2005 and approved by the Council of Ministers Decision No. 2006/10160 dated 7/3/2006. 

“3.39. Standard

Customs will not impose large penalties for errors if it is convinced that the errors were not intentional and that there was no fraudulent intent or gross negligence. If it considers it necessary to prevent the recurrence of such mistakes, a penalty may be imposed, but not to exceed the purpose.”

- “Protocol Amending the Marrakesh Agreement Establishing the World Trade Organization” approved by the Law dated 15/1/2016 and numbered 6662 and put into effect by the Council of Ministers Decision dated 29/2/2016 and numbered 2016/8570 and the attached “Trade Facilitation Agreement” annexed to the said Protocol

“3 Criminal Disciplines

3.3 The penalty imposed must be based on the facts and circumstances of the case and must be proportionate to the degree and seriousness of the violation.”