TT Talk - Venezuela - Fines on containers
In accordance with Article 79 of the Venezuelan Organic Customs Law Regulations an import container unit is exempt from customs formalities applicable to the temporary admission regime for a period of three months. The general purpose of this exemption is to facilitate unloading operations in the country in the normal course of international trade. However, there is evidence over recent years that the application of Article 79 has become more stringent and in recent months there have been strong signs that the Venezuelan Customs Authorities are enforcing it more strictly.
If an inbound container is not shipped out of Venezuela within three months, Customs typically impose a fine 'equivalent to the total value of the goods'. This fine is calculated on the value of a used container as stated in a table prepared by Customs; for example the fine for a 20 foot container will be US$1,800 and for a 40 foot container US$2,500. As a result, fines have been imposed running into hundreds of thousands of dollars.
Customs levy fines either on the carrier or its agent. In the event of non-payment, enforcement against the locally based agent is likely.
There is an argument that the regulations permit containers to be considered as 'elements of transport' rather than 'goods', which reduces the fine very substantially. Cases on this point are under appeal and a Supreme Court judgment is awaited. Alternative arguments at administrative level that the calculation should be based on actual or depreciated value of the container units, rather than the Customs table, have so far been unsuccessful.
Approaches to Customs have shown that there are differences in policy and practice in different ports and therefore considerable uncertainty. Thus, while it is possible to seek an extension to the exemption period, without providing a guarantee, the process by which this may be done differs.
Due to the changing situation and varied application of the regulations, there are limited steps available to protect container operators. It is generally safe to assume that:
- this applies to all types of containers, including whether or not laden at the point of import; and
- the exemption period should be calculated from the earliest point, ie. the date of arrival in the country.
Breach does not, however, give Customs the right to confiscate the container.
Those container operators who import or plan to import containers into Venezuela in the normal course of international trade should:
1) Implement strict equipment control procedures to ensure as far as possible that container units are exported in a timely fashion;
2) Implement procedures to file the necessary petition to extend the exemption period before its expiry;
3) Consider incorporating provisions into contractual documentation imposing liability on the shipper and/or consignee to return container units quickly; and
4) Seek to obtain bank guarantees from the shipper and/or consignee for timely return of units.
This volatile situation is difficult to manage. The Club offers assistance in relation to the above steps and strongly recommends that Members cooperate with their normal Club contacts in developing such procedures and handling any problems that arise.
The Club acknowledges the assistance of its correspondent lawyer, Jose Alfredo Sabatino Pizzolante of Sabatino Pizzolante Abogados Maritimos & Comerciales, Puerto Cabello, Venezuela, in the preparation of this item.
You may also be interested in:
Upcoming conference: Lithium-ion Batteries in the Logistics Supply Chain
This article looks at freight crime in its simplest form
Read more about how transport and logistics insurer, TT Club, advises on container utilisation
TT Talk - Containers in a storm
TT Club looks at recent storm events to draw risk guidance from ports and shipping container terminals