Adv. Gadi Kaye, Adv. Gill Nadel
As we know, an importer who wishes to import goods into Israel must pay the charged import taxes on the subject. At the same time, depending on the subject, in many cases he must meet regulations set by the governmental body responsible for this matter – generally, the various governmental offices or the Standards Institute. The various requirements for each type of goods are specified, among other places, in the Free Import Order.
Not only that, but the various requirements are also set by the relevant authorized professional body. For example, approval from the pharmaceutical branch of the Ministry of Health when importing medicines; approval from the Ministry of Agriculture when importing fodder; approval from the Ministry of Transportation when importing spare auto parts; etc. The actual enforcement of these requirements is carried out by the Customs Authority.
Import of goods to Israel that fail to meet the regulations and duties set by the law is a criminal offense, but instead of a mechanism in which an indictment is filed and the offender is brought to trial, the law allows use of an alternative mechanism called "financial forfeit". In such a mechanism, the importer is required to pay a sum of money to the treasury of the state as a replacement for standing on trial and receiving a criminal punishment. Not only that, but the financial forfeit can also be paid by the importer as an alternative to confiscating the goods by the Customs Authority, mainly in order to allow him to release the goods and continue his commercial activities.
The legal source of the financial forfeit for crimes under import law is the Import and Export Act. Paragraph 14 to the Act states that the Minister of Industry, Trade, and Labor (ITL) can absolve by means of financial forfeit for offenses or actions committed in violation of the stipulations of this Act, in other words failure to meet the requirements set by the regulator. Paragraph 12 of the Import Act gives the Minister of ITL the power to appoint counsels and advisory committees to help enforce the stipulations of the Act. Under the stipulations of this paragraph, the Import Committee of the Ministry of ITL was established. In any case of violation of the legality of import or if there is allegedly a cause for confiscating the goods, at first the importer must transfer the financial forfeit to the Customs Authority, in order to release the goods from the Customs' supervision. Yet he also has the opportunity to bring the matter before the Import Committee and present it with his arguments.
The Import Committee has the authority to fully or partially cancel the financial forfeit, using various arguments . The Import Committee can, for example, cancel the forfeit if it reaches the conclusion that, despite the findings of the Customs Authority, no crime has been committed. The Committee can also decrease or even completely cancel the financial forfeit levied, even when a crime was indeed committed but it was the importer's first offense and he acted in good faith and so on.
Either way, there is no doubt that the Import Committee, as a function of the Ministry of ITL which has the power to levy the forfeit under the Import and Export Act, is the arbitrator of the forfeit and its extent. The Customs workers, who actually collect it, are no more than the long arm of the Ministry of ITL that carries out the actual collection of the forfeit from the importers.
Recently, a letter was published and sent to the customs agents by a senior and highly respected official, the Deputy Head of the Customs Department Mr. Reuven Meltzer- In his letter, Mr. Meltzer criticized the customs agents who regularly pay financial forfeit for importers, as an alternative to confiscation of the goods, while protesting . The Deputy Head of the Customs Department explains his protest , and says that "one can not agree to forfeit payment and at the same time pay it under protest".
In our opinion, this position requires clarification, as follows-
On the one hand, the stance above does not fit the mechanism of setting the forfeit instead of confiscation, since by its very nature payment of the forfeit, particularly as an alternative to confiscation, is only intended to allow the importer to release the goods from Customs supervision, and to temporarily pay the amount of the forfeit levied by the Customs Authorities, and later bring the case before the Import Committee which is, as mentioned, the highest authorized body to set the payment and the extent of the forfeit. In other words, the financial forfeit levied by the Customs Authority, constitutes a kind of temporary estimated payment, until the matter is clarified and fully examined before the Import Committee.
This principle can be derived from "Suggestions Regarding How to Assess the Value of the Financial Forfeit" published by the Ministry of ITL a number of years ago in the form of an organized chart which sets the forfeit according to a number of parameters such as the number of prior offenses of the importer, mitigating circumstances relevant to the case, and also claims regarding the justification for levying the forfeit in the first place.
We wish to emphasize that in our opinion, the Import Committee is not an appeals instance for decisions of the Customs Authority, but the instance that examines and checks the matter from the start. It can even be said that payment of the forfeit set by the Customs Authorities constitutes, in fact, a sort of “security in bond” to ensure that if the Import Committee finds justification for levying one, it will be possible to collect.
Under these circumstances, the forfeit left in the customs house instead of confiscation obviously does not require a crime confession, nor does it constitutes an approval that there were indeed circumstances justifying a forfeit payment. In our opinion, this is not what the Deputy Head of the Customs Department meant in his letter.
On the other hand, the letter does, justly, refers to and differentiates between payment under protest as established under paragraph 154 to the Customs Code, which obliges the importer to file an action with the court within a set period of time, and payment of the financial forfeit. This arrangement, claims Mr. Meltzer justly, is not relevant to the question of financial forfeit and indeed the financial forfeit cannot be paid under protest as it is meant by paragraph 154 to the Customs Code, and the specialized period of limitations of the two months set by this paragraph will not apply, whether or not the customs agent noted that the forfeit was paid under protest or not.
However, it seems that in light of the nature of the financial forfeit and the mechanism for its determination as described above, even Mr. Meltzer would agree that payment of the financial forfeit by the customs agent on behalf of the importer does not constitute an approval to the causes that led to the financial forfeit being levied. The importer standing before the Import Committee comes with clean hands and does not bear the stigma of having admitted the existence of an activity justifying the forfeit. The committee applies its first discretion on the matter, and partially or fully levies or completely exempts the importer from payment of the forfeit. And indeed, payment of the forfeit set by the Import Committee, after deeply examining the issue - that payment presumably does require an admission of the existence of circumstances justifying its being levied, depending on the situation.
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