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Cablegate: Spanish Customs Administration

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 MADRID 000841

SIPDIS

STATE PASS TO USTR POSNER, MOWREY AND RHODE

E.O. 12958: N/A
TAGS: EFIN SP ETRD EU WTO USTR
SUBJECT: Spanish Customs Administration

REF: State 42299

1. This cable contains responses to reftel cable re: EU
member state customs regimes. Responses are queued to
questions listed in reftel para 6. We collected the
information during routine visits with Customs and business
contacts.

A. CUSTOMS PROCEDURES The formal procedure is comprised of
two steps, each with its respective time period. The first
step begins upon the arrival of goods from outside the EC,
at which time the importer has twenty-four hours to make a
summary declaration of the goods. Many importers provide
this declaration even before their goods arrive in a Spanish
port or airport to help speed up the process. The summary
is transmitted electronically to a central office, where the
information is reviewed. The Customs Administration does a
risk analysis of the goods, and color-codes the imports
according to their degree of risk. About 80% of the goods
are marked "green" and are released into the stream of
commerce without any additional review. The next status is
"orange," which requires further examination of documents
and later will be marked "green" or "red." Approximately
10% of goods are labeled "orange," primarily for sanitary
and phytosanitary concerns. The other status is "red"
(roughly 5% of goods), which requires the examination of
both documents and goods.

The second step involves a more specific declaration of the
goods imported and includes a declaration of value and
destination. The time limit on this step varies depending
on whether the goods arrive via air or sea. If the goods
arrive by air, the importer has twenty days to make a
declaration, while goods that arrive by sea have a more
generous time period of forty-five days. There are three
points in time when Customs may choose to reevaluate its
valuation: 1) when Customs is initially reviewing documents
for an orange or red status shipment; 2) during subsequent
office reviews of documents for green status shipments that
have already entered; and 3) after Customs does routine
annual on-site inspections.

B. APPEALS PROCESS If the importer wants to appeal the
decision of Customs authorities, especially in the case of a
discrepancy in the valuation of customs duties, then the
appeal would be directed at the Tax Collection Department
(Departamento de Recaudacion) of the Tax Administration
(Administracion Tributaria). This is the only part of the
Tax Administration empowered to hear claims and make
reimbursements. Importers have two appeals-the decision on
the first appeal must be made within 15 days. If the
importer chooses to appeal a second time, the Collection
Department must review within 15 days. If the importer is
still not satisfied, he can then take the decision to court.
If the claim is not resolved after exhausting national
means, the appeals process can be taken to the European
level, but most appeals are solved within the Department.

C. See response to question A.

D. PENALTIES Customs tax fraud is considered to be the
incomplete disclosure in the declaration to customs
authorities. Penalties fall into the following three
categories depending on the gravity of Customs law
violations: minor, severe, and very severe. The penalty is
always issued as a fine, which depends on the degree of the
violation. If the fines total more than 30,000 euros
($36,900 at exchange rate of 1.23), then authorities can
impose additional non-monetary sanctions.

E. RECORDS Spanish Customs retains records for four
years-the law requires them to retain records for three
years for customs purposes, but for four years for Value
Added Tax records. The three years leeway allows Customs
authorities the possibility to review records, and
subsequently collect customs duties that were insufficient.

F. GUIDANCE Exporters can request guidance from Spanish
Customs if they have any uncertainties over classification
and evaluation of goods. The exporter simply submits a form
to Customs authorities. Customs authorities usually respond
in 15 days (however it can take up to 2 months depending on
the number of requests they receive). If the exporter does
not agree with Customs, then he has the opportunity to make
an appeal within fifteen days.

G. EU MEMBER STATES In theory all Customs of the member
states should operate in the same manner. However, business
contacts and Spanish officials say Dutch Customs are less
stringent than their Spanish counterparts. A business
contact told us that Spanish Customs is comparable to the
authorities in Italy and Greece. For the most part, our
business contacts were not aware of discrepancies in customs
duties in different member states, however we are aware of
one American company that has been unable to resolve a
Spanish Customs valuation that differs from the valuation in
another member state.

2. Spanish Customs and the Tax Collection Department are the
only two departments under the Spanish Tax Administration
that are involved with customs regulations. The Tax
Administration is part of the Spanish Treasury Department.

3. In 1995, Spain began incorporating information technology
into its customs procedures. Now, at least according to
Spanish Customs authorities, Spain's Customs Department is
the most technologically advanced of the EU-15 member
states. A business contact confirmed that the system is
completely electronic and works smoothly. Spanish Customs
Agents also claim that Spain's customs procedures are
stricter than countries with larger volumes of imports, such
as Holland, Belgium, and Sweden (our Customs contacts
referred to Holland as the "colander of Europe"). Despite
the stringent process, Spain's Customs Department seems to
function efficiently as information is processed
electronically and centrally. Spain has also made the
process more efficient by making arrangements with importers
from reputable multinational companies. In this
preferential agreement, companies make a guarantee payment
of customs duties, and their goods are released immediately
into the stream of commerce. They are billed monthly for
customs duties.

ARGYROS

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