Court Practice On Customs Disputes

We would like to share an interesting case on claim to pay customs duties. The claimant was an insurance company, and the defendant was the State Revenue Department.

Merits of case

Under the insurance agreement between the Insurance company (the insurer) and LLP (the insured), the former insured property interests of the insured related to its obligation to pay customs duties and taxes in accordance with customs legislation of the Republic of Kazakhstan.

After expiration of the agreement, the Insurance company received a claim from the Department for payment of customs duties and taxes. In its claim the Department reported that the abovementioned LLP (the insured) had not fulfilled its obligations with respect to payment of customs duties.

Claimant's position

The insurance company considered that the claim of the Department had not determined the fact of occurrence of an insured event under the Insurance agreement. The insured event happened after the expiration of the insurance agreement.

Defendant's position

The Department considered that LLP had not fulfilled its obligations with respect to payment of customs duties. In this regard, it was necessary to make payment of customs duties, which were subject to unconditional and obligatory fulfillment within 2 working days after receiving the claim.

The Department further reported that the insurance amount had not covered all tax debts of a payer's customs duties and taxes, and in this regard budget might not receive full amount of outstanding customs duties and taxes.

FINDINGS OF A COURT

Did the insurance contract expire at the moment of submission of the claim?

The argument that the insurance agreement expired at the moment of the claim were considered to be groundless by the court. In accordance with the insurance agreement, the insurer was obliged to discharge an accumulated debt of the payment of customs duties and taxes to the customs authorities that had arisen as a result of the foreign economic activity of the insured. Actions of the insured, which caused the debt to budget, had occurred when the agreement was valid. The court referred to the insurance agreement itself, according to which, fact of incurrence of liability would be set under a claim of customs authorities to pay outstanding customs duties, taxes and penalties. In accordance with customs legislation, such a claim shall be sent to the insurer in case of non-fulfillment of obligation to pay customs duties, taxes by the...