The Supreme Court’s conclusions
Citing case law review No. 1 (2018) approved by the Presidium of the Supreme Court of the Russian Federation on 28.03.2018, the Supreme Court noted that "…an error in classifying a product for customs purposes, where not accompanied by inaccurate declaration of its quantitative characteristics, cannot serve as a basis for imposing sanctions under part 1 of Article 16.2 of the Administrative Offences Code".
In particular, the Supreme Court observed that the exported goods had been fully declared as to quantity, with a total of 1,398 pieces specified. That quantity included the 94 pieces of rough timber discovered by the customs inspection.
Thus, the error made in classifying the goods related to information about the qualitative characteristics of the goods. Giving inaccurate information about the qualitative characteristics of goods when the goods have been declared in full does not constitute the offence for which sanctions are prescribed by part 1 of Article 16.2 of the Administrative Offences Code.
At the same time, the Supreme Court notes that such an error may constitute the offence for which sanctions are prescribed by part 2 of Article 16.2 of the Administrative Offences Code. The offence in question is result-based, meaning that liability only arises if the inaccurate declaration of goods resulted or may have resulted in the non-payment of customs charges.
Given that the administrative offence proceedings did not establish any failure to pay customs charges, the Supreme Court had no obligation to reclassify the exporter’s action under another part/article of the Administrative Offences Code as provided in clause 20 of Resolution No. 5 of the Plenum of the Supreme Court of the Russian Federation of 24.03.2005 "Concerning Certain Issues Arising for Courts in Applying the Administrative Offences Code of the Russian Federation".
It should be pointed out that a similar position, i.e., that entering the wrong classification code for a product while the quantity of the product is correctly declared does not constitute the offence stipulated by part 1 of Article 16.2 of the Administrative Offences Code, was expressed by the Supreme Court back in 2017 (Resolution No. 78-AD17−7 of the Supreme Court of 13.03.2017).
In practice, however, the customs authorities do not always heed the Supreme Court’s position and classify such errors as non-declaration offences.
Notably, in considering this dispute the Supreme Court not only assessed the substance of the offences under part 1 of Article 16.2 of the AOC (non-declaration) and part 2 of Article 16.2 of the AOC (inaccurate declaration) but also assessed the social danger posed by the offences and the level of applicable sanctions. See the figure below for more detail.