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Checking customs duties

License fees and customs value

Recently, there has been a lively discussion of the current practice of customs authorities to include license fees in the customs value of imported goods.

Why has this topic become
relevant now?

The Accounts Chamber of the Russian Federation has published a report on the inspection of the Federal Customs Service (1bbb4139914f4f2e51e0edb565f19647.pdf (, in which it compared the data of the Federal Tax Service on license payments, which were taken for deduction when calculating income tax and the data of the Federal Customs Service on license payments, which were included in the customs value. Based on this, a significant difference emerged.
Also, the Accounts Chamber checked the approaches to customs control on this issue and came to the conclusion that the customs authorities do not have sufficient information on license fees, as well as:
– Internal control systems are not developed;
– Few customs checks are carried out.

Bottom line: The Accounts Chamber recommended that the FCS more actively check the non-inclusion of license fees in the customs value according to the Federal Tax Service of the Russian Federation.

In what cases are license
fees to be included
in the customs value?

To simplify very much, then in those when it is impossible to buy goods without paying them and when they refer to imported goods.
However, the established judicial practice has seriously rethought these conditions:
For example, despite the fact that formally with regard to royalties, payments for know-how, franchises, this issue is not so unambiguous, in court practice there are already a number of cases that show that when making payments in favor of a parent company or an interconnected company, the FCS includes the customs value of all named payments for intellectual property. At risk are both those who pay royalties to the parent companies and those who pay them to the group’s companies. And even agricultural producers who pay royalties for the right to reproduce.

Which companies will this affect?

– Companies engaged in the import and distribution of finished goods;
– Manufacturing companies, the import of which is foreign raw materials, equipment and components.
Customs inspections are now being initiated both for companies that do not include royalties in the customs value, and for companies that include royalties in part or in full. The customs authorities also bring to responsibility the heads of such companies: administrative and sometimes criminal.

Our team is ready to provide
comprehensive support
in this matter, namely:

To work out a license agreement and, in general, relations on the supply of goods in order to convince the customs authorities that license payments do not relate to imported goods and are not subject to inclusion in the customs value, as well as conduct a substantive analysis:
– licensing agreements;
– the scope of granting rights to intellectual property objects;
– the circumstances of the import of goods and their use.

In addition, we:
• will prepare the company for customs inspection;
• will help to answer the requests of the customs authorities;
• will prepare well-grounded objections to the verification act.