the Terminal will Compensate, Customs will not Refund the Duties
Gill Nadel, Adv.
The recent decision given by the district court of Tel Aviv will not be good for shipment storers.
A Palestinian importer imported two containers of cigarettes, stored them in a cargo terminal, paid the import duties, and the import license was granted approval from the customs authority. Before the cigarettes were physically released from the cargo terminal, the cigarettes were stolen from the terminal.
The importer filed an action against a number of parties: the importer sued the customs authorities and requested that it refund the duties paid (around two million NIS), by virtue of the instructions of paragraph 150 to the Customs Code which establishes that the Customs Administrator is permitted to refund duties or forgo their payment, partially or in full, in the goods were lost, destroyed, damaged, or left to the Customs Authorities, while still under its supervision or beforehand.
Similarly, the importer sued the cargo terminal and its insurance company for recommendations for the sum of the above import duties, because of the failure to sell the stolen cigarettes and other damages.
The court accepted the importer’s suit against the cargo terminal and its insurance company. The court ruled that the cargo terminal is the one responsible for the security of cargo in its property, both by virtue of its being a “hired watchman” and by virtue of the law that gives it authority to be an exclusive “licensed warehouse”, for the storage of merchandise before the payment of customs, and for this purpose the cargo terminal is obligated to establish efficient security procedures, while relying on professional standards and with due supervision regarding their implementation in the field.
The court added that “if this is true of merchandise in general, it is doubly true of cigarettes- which are a product on the one hand easy to steal and distribute and on the other hand subject to high duties. For these reasons, these goods are defined -by all sides- as especially sensitive.”
The court found that the cigarettes were left without supervision in the inspection area and were not returned to their regular place in the terminal area- a place that was designated specifically for containers in which cigarettes are stored, to which access is more difficult and more secured.
Similarly, the court found that the inspector at the terminal gate did not rigorously check the documents or their correlation to the containers, and that it was possibly to identify the papers used for the removal of the goods from the port as forged simply by looking at them- something that was not done.
From this, the court derived that the cargo terminal did not behave in a manner that can and should be expected from a “responsible and intelligent” terminal, that deals with sensitive cargo given to theft, and that no means of protection- even the most minimal- were used to prevent unauthorized persons from removing containers from the terminal, despite the fact that such actions were foreseeable.
On the other hand, the court rejected the action of the importer against the customs authorities (and accordingly rejected the third party notice that the cargo terminal and insurance company filed against the customs authorities). The court ruled that the conditions of paragraph 150, which allows for refund of the duties to the importer, were not fulfilled, as the goods were no longer in under the supervision of the customs authorities. The court used testimony given before it according to which there is no need to receive confirmation from the customs authorities to remove the goods from the terminal after the import license has received approval. Accordingly, the court ruled that “under the circumstances of our case (upon which there is no one who disagrees factually regarding this), the goods were no longer found in the ‘supervision’ of the customs authority, but rather the ‘supervision’ of the cargo terminal- and the duty of payment of import duties rests on that party.”
We will raise two of our own interpretative points:
In everything regarding the case against the customs authorities, it seems that the court explained the phrase “supervision” in the sense of “physical control” over the shipment, and not in the sense of “legal control”, from which the court derived that if the customs authorities did not physically control the shipment, it did not supervise it. This decision of the court can be disagreed with.
The results of the decision are that the application of paragraph 150 becomes progressively smaller, in addition to the additional limitation (not decided in this case) related to the question of whether the customs authorities is obligated, when the conditions of the paragraph are fulfilled, to return the duties, or whether they are allowed discretion in the matter. In any case, it is clear that the results of the case are not good for storers of cargo or their insurers, since they are, on one hand, exposed to suits by cargo owners, and on the other hand, unable to request refund of duties from the customs authorities.
תא 2780/00 Shirkat Yamko v. State of Israel et. al, decision given 6.5.2007
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