Author: Aliona Yevtushenko, lawyer at F&P
Most importers find out about the existence of a rejection card at the worst possible moment – when the cargo is already at customs, and instead of releasing the goods, the system issues a notice of rejection. This is followed by downtime, storage costs, and disrupted deliveries to contractors. In this situation, many people start looking for ways to “negotiate” or simply re-fill out the declaration, agreeing to the terms of the customs. But often the correct answer is different: the refusal card should be appealed.
This article is not a general overview of the law. We will analyze in which specific cases the refusal card is illegal, what rules to rely on when appealing, and what procedural violations by customs most often become the basis for its cancellation in court.
What is a refusal card and what is its place in the registration procedure
A refusal card is a formalized decision of the customs authority provided for in Article 256 of the Customs Code and Section VII of the Procedure for the Execution of Customs Formalities (Order of the Ministry of Finance No. 631). By its very nature, it is an individual administrative act: a written, reasoned decision on the impossibility of customs clearance.
It is crucial to understand how a refusal card differs from a decision to adjust the customs value. Adjustment is when customs says: “We will clear your goods, but at a different price”. A refusal card is when customs says: “We will not clear your goods at all”. Often these two decisions are issued simultaneously, but they need to be appealed separately, and the defense tactics are different in each case.
Five grounds for refusal that customs uses most often (and what is wrong with them)
- “The declaration does not contain all the information or is submitted without the necessary documents”. This is a reference to clause 11 of Article 264 of the CCU. Formally, it is a legal ground. However, in practice, customs often interprets it in an expanded way: it requires documents that are not included in the exhaustive list established by Article 335 of the CCU. For example, the manufacturer’s price lists, export declarations of the country of shipment, and explanations of discounts. The Supreme Court has repeatedly emphasized that the list of documents set out in the Code is exhaustive, and customs has no right to require additional documents as a condition for clearance.
- “There are grounds to believe that the declared customs value is unreliable”. This is the most common ground, and at the same time the most vulnerable for customs in court. The fact is that Article 54 of the CCU clearly defines when the authority has the right to reject the declared value. Mere “doubts” without specific factual grounds are not a sufficient reason. If the refusal card says something like “there are reasonable doubts about the numerical values of the components of the customs value” without specifying which ones, this is a weak decision that has a high chance of being canceled.
- “Incorrect classification of goods”. The customs believes that your UKTZED code is incorrect and refuses to clear the goods. There is a subtle nuance here: according to the procedure, the customs authority must make an independent classification decision, not just refuse. If, instead of a classification decision, a refusal card is issued with the wording “incorrect code”, this is a procedural violation.
- “Violation of prohibitions and restrictions”. For example, the absence of a permit, certificate, or license. Here, you need to look at each specific case: whether this product really needs this permit, or whether customs mistakenly applies restrictions to goods that do not apply.
- Refusal without a clear motivation. It happens more often than we would like. The refusal card contains general phrases, references to “non-compliance with the requirements of the law” without specifics. Article 256 of the CCU explicitly requires that the decision must state the reasons for the refusal and provide “comprehensive explanations of the requirements, the fulfillment of which ensures the possibility of customs clearance.” If this is not the case, the decision does not comply with the law.
Deadlines: what needs to be done and when
Administrative appeal to a higher-level customs authority – 10 working days from the date of receipt of the refusal card (Chapter 4 of the CCU). In practice, this route rarely works: customs almost never reverses its own decisions in an administrative procedure. But sometimes it’s worth going through it, if only to fix the position and get an official response that can then be used in court.
Judicial appeal – a lawsuit to the district administrative court within 6 months. Important: an administrative appeal is not a prerequisite for going to court. You can file a lawsuit right away. In our experience, this is often more expedient – especially when the goods are worthwhile and every day is money.
It is also worth remembering that the decision to refuse must be made within the time limit set out in Article 255 of the CCU for completing customs clearance (4 business days, in exceptional cases – up to 30). If the customs has not made any decision within this period, this is an inaction that is appealed separately.
What the court pays attention to: key arguments
The analysis of court practice shows several stable positions that the Supreme Court relies on when considering cases on refusal cards:
Motivation. The customs decision must be specific, not formal. The court checks whether the refusal card indicates which documents were missing, which information is unreliable, and which regulations the declaration does not comply with. General wording is grounds for revocation.
List of documents. The courts have consistently upheld the position that customs does not have the right to demand documents outside the list set out in Article 335 of the CCU. If the refusal is motivated by the failure to provide a document that is not included in this list, the decision is illegal.
The consultation procedure. When controlling the customs value, Article 57 of the CCU provides for a consultation procedure between the customs and the declarant. If the customs skipped this stage and immediately issued a refusal card with adjustments, this is a violation of the procedure, which the courts pay attention to.
The arguments are at the court stage. An important nuance: The Supreme Court has repeatedly noted that the customs authority has no right to provide new grounds for refusal at the stage of court proceedings that were not specified in the card itself. That is, if the card says one thing, but the customs says something else in court, these new arguments are not accepted.
A practical algorithm of actions
If you received a rejection card, the procedure is as follows:
First, save everything. The refusal card, the decision on adjustments (if any), the customs declaration, all documents that were submitted, correspondence with the customs. Do not delete anything from the electronic cabinet.
Second, analyze the grounds. Read the card carefully: what exactly is indicated as the reason for refusal. Compare it with the actual list of documents you submitted. Are all customs requirements based on specific provisions of the Code?
Third, decide on a strategy. You have three options: (a) comply with the customs requirements and submit a new declaration if the requirements are legitimate and you really missed something; (b) file an administrative complaint; (c) go to court immediately. The choice depends on the specific circumstances, the amount of the dispute, and how urgently you need the goods.
When you should not appeal
To be honest, not every rejection card makes sense to appeal. If you really did not submit the document required by Art. 335 of the TCU, it is easier to submit it and re-execute the declaration. If the mistake in classification is really yours, it is cheaper to fix it than to go to court. We always advise our clients to start with an honest analysis of the situation. It makes sense to appeal when customs acts beyond its authority, demands unnecessary things or does not follow the procedure.
That’s why we offer a free preliminary assessment: you send us a refusal card and supporting documents, we analyze and honestly tell you whether there is a prospect, and if so, what strategy will be optimal.
Did you get a rejection card? Send us your documents and we will evaluate your prospects for free.
Phone: +38 093 722 56 33
Email: fo@fedoryshyn.com
