Customs Additional Charges Did Not Occur — A Major Victory for Inmar Legal

Customs Additional Charges and Dispute Over Classification in Medical Devices Import

Inmar Legal successfully represented a client in three related court cases involving attempts by the Central Customs Authority to reconsider classification of imported medical devices and impose customs additional charges against one of the leading importers of medical products.

In each case, the customs authority’s position was based on the same grounds: it asserted that the names of the imported goods allegedly did not substantiate their status as medical devices, argued that accessory components should be classified separately, and claimed that the application of a VAT exemption was unjustified.

On those bases, the customs authority altered the classification codes, excluded the goods from the VAT exemption regime, and calculated and issued notices for customs additional charges, alleging purportedly inaccurate declaration.

In all three cases, courts held that the decisions of the customs authority were unlawful, inconsistent with regulatory requirements, and based on formal assumptions unsupported by technical analysis of the goods. The courts determined that the customs additional charges were improper. Lower court rulings were upheld on appeal in all matters, and in two cases the Supreme Court of the Russian Federation refused to accept petitions for review, effectively cementing the favorable outcome.

Registration Certificates as Core Evidence

The central legal issue in all three cases concerned the legal status of the imported goods. The importer presented registration certificates for the medical devices, which — pursuant to the Federal Law No. 323-FZ “On the Fundamentals of Health Protection of Citizens in the Russian Federation” — constitute sufficient proof of the intended purpose of such products and their accessories.

The courts confirmed that a registration certificate defines not only the status of the primary device but also the status of its accessories when they are intended for use together with the registered device. The customs authority’s argument that accessories require separate registration was rejected as legally unwarranted.

Judicial decisions emphasized that registration certificates contain information about the functional purpose of the goods and confirm that they fall under the scope of the Government Decree No. 1042, which regulates application of the VAT exemption for medical goods. Previously, the Supreme Court of the Russian Federation in case No. 305-ЭС21-6774 held that a registration certificate is sufficient evidence of medical purpose and that attempts by customs to contest its legal effect are inconsistent with law.

Classification of Goods According to TN VED EAEU and Customs Authority Discretion

The courts also paid special attention to the correctness of classification of goods under the Commodity Nomenclature for Foreign Economic Activity of the Eurasian Economic Union (TN VED EAEU). In one of the cases, the central customs authority changed the commodity code from 9021 29 000 0 to 9021 90 900 9, which removed the goods from the preferential category and enabled the calculation of additional customs duties.

The basis for this decision was an analysis of product names without accompanying technical expertise or objective assessment of the goods’ actual characteristics — a practice that the court ruled violated the Core Rules for Interpretation of TN VED EAEU.

The courts found that such classification practices, which disregard technical properties and objective characteristics, fall outside the lawful discretion of customs authorities and cannot form the legal basis for reclassification or the imposition of additional customs charges.

VAT Exemption and Illegality of Additional Charges

In all three matters, the VAT component played a pivotal role. The customs authority contended that the imported devices did not qualify for the zero VAT rate because they allegedly did not fall within the definition of medical goods.

On that basis, it imposed customs additional charges, assessed VAT, and issued enforceable notices. The courts ruled that this position contradicted applicable tax legislation. The VAT exemption is tied to the correct classification of goods under the TN VED EAEU and their inclusion in the list of medical products subject to preferential VAT treatment (under Government Decree No. 1042).

When goods have the classification code 9021 29 000 0, the VAT exemption applies automatically; the law does not condition eligibility on completeness of shipment, simultaneous import of all components, or additional documentary proof beyond valid registration certificates.

The customs authority’s requirement to demonstrate the absence of Russian analogues was also rejected by the courts as legally erroneous — that requirement pertains to raw materials and components for production of medical goods, not to finished products and their accessories.

Unsubstantiated Declaration and Court Findings

Across the cases, the courts consistently found that the customs authority failed to prove either inaccurate declaration or any material discrepancies in the documentation. The courts noted that the importer presented a complete set of documents required by law, the information provided was consistent with registration certificates, and application of the VAT exemption complied with statutory criteria. As a result, the customs authority could not demonstrate a basis for imposing additional customs charges.

The rulings make clear that a customs authority’s misunderstanding of the goods’ intended purpose does not automatically imply an error on the part of the declarant. In these matters, the importer acted strictly in accordance with registration documents and the established regulatory framework.

Importance for Foreign Economic Practice

This series of victories establishes a coherent legal principle: customs authorities may not unilaterally reassess the technical nature of medical devices and their accessories by substituting their own interpretation for decisions by authorized regulatory bodies.

In matters of classification of goods under TN VED EAEU, customs must base decisions on objective characteristics and internationally harmonized rules, not on linguistic associations or terminological assumptions. For participants in foreign trade, these court decisions highlight the importance of accurate product classification and the effectiveness of challenging customs authority decisions when they rest on speculation rather than substantiated technical analysis.

The outcomes also underscore the critical role played by a qualified customs lawyer in defending business interests within the customs regulatory sphere