KPMG and KPMG Law Article in *Betriebs-Berater*: Pitfalls in Customs Law

Criminal Law Consequences and Risk-Mitigating Compliance Measures

Customs and foreign trade law is a complex and often underestimated area of law that presents numerous pitfalls for companies operating internationally. In recent years in particular, this specialized field has become a key item on the executive board’s agenda. The past few years have been marked by the United Kingdom’s withdrawal from the European Union, trade conflicts between the U.S., the EU, and China, Russia’s invasion of Ukraine, and the resulting tightening of sanctions regulations. Added to this is the United States’ recent realignment of its trade policy, which has definitively brought global trade—and thus customs law—into sharp focus in many boardrooms. At the same time, customs and foreign trade audits are once again gaining significant importance following the reduction in audit activity by customs authorities due to the pandemic. In practice, we are seeing not only a higher frequency of audits but also an increased intensity of these audits. As the number of findings rises, so does the likelihood that cases will be referred to the relevant enforcement authorities and that criminal or administrative penalty proceedings will be initiated. Violations of customs and foreign trade regulations can result in significant financial losses. In addition to back customs duties and interest, individuals involved, those with supervisory responsibilities, and companies face the risk of criminal and administrative fines. In addition, administrative consequences may apply, in particular the suspension, modification, or revocation of customs authorizations. For companies, the loss of an authorization—for example, in the area of simplified procedures or AEO status—can have more severe economic repercussions than a fine. This article highlights the pitfalls that are particularly relevant in practice regarding tariff classification, customs value, origin, and export controls; classifies the criminal and administrative penalty consequences; and outlines effective compliance measures to minimize risk.

You can find the full article by KPMG expert Mario Urso and KPMG Law expert Philipp Schiml here.