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Challenging Issues of Penalty Accrual in Natural Gas Export
 
PIIS231243500022467-1-1
DOI10.18572/2410-4396-2021-3-64-68
Publication type Article
Status Published
Authors
Sergey S. Koshman 
Affiliation: Saint-Petersburg State Economic University
Address: Russian Federation, Saint-Petersburg
Journal nameEnergy law forum
EditionIssue 3
Pages64-68
Abstract

The legal regulation of the grounds and the procedure for penalty accrual by customs authorities in connection with the export of energy resources produces a significant impact on the terms and conditions of such supplies. This issue is especially relevant for the export supplies of natural gas. Natural gas export agreements contain provisions regulating the procedure for the revision of the natural gas price. The price revision period usually covers the supplies that have already taken place. In cases when the supply price increases following a retroactive revision by the parties to an agreement, the declarant pays an additional customs duty to the federal budget in view of the revision. In such situations, the customs authority accrues a penalty on the amount of the additional payment of the customs duty for the entire period starting from the customs declaration filing date to the penalty accrual notification issue date. This article reviews the legal grounds for the penalty accrual and brings forward proposals aimed at improving the legal regulation of the penalty accrual procedure, terms and conditions.

Keywordsenergy law, legal regulation of gas export, customs regulation
Received01.09.2021
Publication date30.09.2021
Number of characters11074
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Table of contents

The legal nature of penalties
No damage to the budget as a ground for non-accrual of penalties
Proposals for the improvement of the legal regulation of the procedure and terms and conditions of penalty accrual
1 Building of a balanced legal regulation of the penalty accrual procedure in the context of export of energy resources in general, and natural gas in particular, is an important element of compliance with the fundamental principle of energy law on ensuring a balance of interests of parties to public law relations that develop between export suppliers of energy resources and customs authorities.
2 In this regard, one should agree with V.V. Romanova that the fundamental energy law principles can be implemented only if there is adequate legal support and the possibility of the effective protection of violated rights and property interests of subjects of private and public law relations in the energy industry [1].
3 The key step in the customs clearance of natural gas export is the payment of a customs duty.
4 For the goods to be released by the customs authority, a declarant must pay the customs duty in the established amount and within the deadlines provided for by the laws on customs.
5 In accordance with Art. 72 of the Federal Law On the Customs Regulation, penalties are cash that a declarant has to pay to the budget in case of non-fulfillment or improper fulfillment of the obligation to make customs payments within the deadlines provided for by the laws on customs.
6 The cases when the customs authority makes a decision on the classification of goods after the release of the goods resulting in the increase in the customs duty to be paid may serve as an example of a situation where the grounds for penalty accrual may arise (Part 2 Art. 15 of the Federal Law On the Customs Regulation).
7 Speaking of natural gas export, the most common situation of penalty accrual by the customs authority is the retroactive customs value adjustment. The corresponding adjustment is a consequence of an arrangement reached by the parties to a foreign trade agreement for the supply of natural gas on the revision of the natural gas price in respect of the supplies that have already taken place. In this case, the customs authorities accrue a penalty on the amount of increase in the customs duty.
8 Due to the fact that natural gas supplies are carried out on a monthly and continuous basis, revision of the natural gas price under one agreement entails the need to amend a lot of declarations filed within the framework of the customs declaring of export of natural gas.
9 These features result in a significant number of disputes between a declarant and the customs authority as to the presence or absence of penalty accrual grounds in respect of each individual supply.
10 The legal nature of penalties is of substantial significance for the evaluation of the penalty accrual grounds.
11

The legal nature of penalties
12 An analysis of the applicable customs laws and the judicial practice shows that penalties are defined in the relations arising during the customs clearance of export of natural gas not as a punishment or a fine but as a remedial measure aimed at compensating for budget losses resulting from the declarant’s untimely fulfillment of the obligation to make customs payments.
13 In accordance with Part 9 Article 72 of the Federal Law On the Customs Regulation, it is not allowed to reduce the penalty amount to be paid. This wording is consistent with the understanding of the legal nature of penalties as a compensatory measure.
14 The degree of guilt and the social danger of the act resulting in the failure to make customs payments to the budget are of no legal importance in the determination of the amount of penalties subject to collection, which could indicate that penalties are classified as a type of sanction.
15 There has also now been established a position in the judicial practice where penalties are understood as a remedial measure of a compensatory nature. The judicial practice has used an analogy with the provisions of tax laws to disclose the legal nature of penalties accrued for the untimely making of customs payments.
16 The penalty accrual ground in both tax and customs law is the untimely tax / customs duty payment by a taxpayer/ declarant (Clause 1 Article 8 of the Tax Code of the Russian Federation, Subclause 33 Clause 1 Article 2 of the Customs Code of the EAEU).
17 There has been established an approach in the judicial practice on the possibility of applying the legal position worded in Clause 5 of Ruling of the Constitutional Court of the Russian Federation No. 20-П of December 17, 1996 [2] to the determination of the legal nature of penalties accrued for the untimely making of customs payments.
18 The essence of the abovementioned legal position of the Constitutional Court of the Russian Federation is that penalties are a compensation for losses of the state treasury incurred as a result of non-receipt of tax amounts in due time in case of a tax payment delay.
19 The position that the obligation to pay penalties is supplementary to the obligation to make customs payments and arises in cases where a failure to make customs payments has resulted in budget losses, was also reflected in Order of the Supreme Court of the Russian Federation No. 305-ES197439 of July 25, 2019.[3]

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1. Romanova V.V. The Legal Support of the Balance and Protection of Interests of Parties to Public Relations in the Energy Industry / V.V. Romanova // Court of Arbitration. 2017. No. 2 (110). P. 204–213.
2. Ruling of the Constitutional Court of the Russian Federation No. 20-P of December 17, 1996 On the Case on the Verification of the Constitutionality of Clauses 2 and 3 Part 1 Article 11 of the Law of the Russian Federation of June 24, 1993 On Federal Tax Police Authorities // Russian Newspaper. 1996. December 26.
3. Ruling of the Supreme Court of the Russian Federation No. 305-EhS19-7439 of July 25, 2019. URL: https://ras.arbitr.ru/ 
4. Ruling of the Court of Arbitration of the Moscow District No. F05-2966/2021 of March 5, 2021 on Case No. A40-73187/2020. URL: https://ras.arbitr.ru/.  ;  Ruling  of  the  Ninth  Arbitration  Court  of  Appeal No. 09AP-66170/2020 of January 13, 2021 on case No. A40-107470/2020. URL: https://ras.arbitr.ru/.  ; Ruling of the Tenth Arbitration Court of Appeal No. 09AP-78273/2019 of January 31, 2020 on case No. A40-186047/2019. URL: https://ras.arbitr.ru/ 
5. Ruling of the Plenum of the Supreme Court of the Russian Federation No. 49 of November 26, 2019 On Some Issues Arising in the Judicial Practice in View of the Entry into Force of the Customs Code of the Eurasian Economic Union // Russian Newspaper. 2019. December 6.

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