8/3/2019 Customs Fines for Fertiliser Cargo Discrepancies

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20/10/2010

Argentina - Customs Fines for Fertiliser

Cargo DiscrepanciesClub correspondents Pandi Liquidadores S.R.L, Buenos Aires have advised that they areencountering an increased number of cases of customs fines being imposed in Argentinean ports dueto discrepancies between the landed and manifested cargo figures.

Fertiliser cargoes in particular are affected and in some instances substantial fines and additionalcustoms duties amounting to several hundred thousand US Dollars have been imposed. Overage inone parcel cannot be offset against a shortage in another, and a fine may be imposed for each cargodiscrepancy.

In order to minimise the risk of vessels discharging bulk products being fined, Pandi Liquidadores offer

the following advice:

“In view of the number of recent cases of shortage of bulk fertilisers in Argent inean ports leading to Customs fines, we would like to give the Club and its Members a general briefing of the local situation bearing in mind the Customs Law and their actual behavior.

Although this is not a new problem, there has lately been an increase in the number of cases relating to discrepancies between the shore and manifested cargo figures, especially in respect of fertilisers. In general there is a 2% allowance for discrepancies which applies to bulk liquid cargoes and 4% to solid bulk cargoes in respect of customs fines. This means that if the anomaly in the cargo figures exceeds these amounts then a fine could be imposed of between one and five times the CIF value of the cargo.

Recently the main problem has related to the duties imposed for short landed cargo. Previously, if the discrepancy was up to 0.6% of the whole cargo then no charges were imposed. However, the customs authorities now consider that the 0.6% limit only applies to weights controlled through the draught survey system, but if the cargo weight is measured by shore scales then the tolerance for error would be nil as far as additional duties are concerned. For the sake of clarity, please note that the tolerance of 0.6% still applies to bulk liquid cargoes.

The duties imposed for such discrepancies would normally be paid by the receivers. However, they have certain benefits/exemptions in respect of VAT and Income Tax, so at present the Customs office commences proceedings against the carrier/agents for both the VAT and income tax in respect of the short landed cargo, stating that the exemption applies only to importers but not to carriers/agents. The interpretation of the customs laws in this regard very much depends on the customs office involved with the offices in Rosario, San Lorenzo, San Nicolas, Campana and others interpreting the law 

differently.

When fines and additional duties are imposed, depending on their size, most of them are defended to try at the very least to reduce their magnitude, even if they cannot be dismissed entirely.

As you will note it seems that we are often in a difficult situation as far as customs is concerned.Bearing in mind that in Argentina agents are jointly and severally responsible with the carrier for customs infringements and proceedings are commenced directly against port agents, it is therefore usual for agents to require a Club’s LOU in case of any cargo discrepancies following discharge whichcould give room to customs proceedings.

At present it is recommended that Members control the cargo discharge not only through draught survey but also by carrying out an off-loading survey by checking the cargo weight in each truck at the shore scale as in Argentina the official weights for customs purposes are taken from the shore scale.During the past year this exercise has been conducted with good results. Unfortunately, however,

8/3/2019 Customs Fines for Fertiliser Cargo Discrepancies

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shortages were found with the last two vessels which discharged at different local ports, although we are not completely sure whether the problem occurred at the discharge port or whether discrepancies existed from the load port.

As Members will be aware, conducting draught surveys in conjunction with monitoring the cargo quantity loaded into each truck is an expensive exercise so it is their decision as to whether they would 

like to proceed with this additional precautionary measure. One possible alternative protective measure that we are considering for future cases is as follows: 

1. Draught survey to be carried out on loading, involving local customs if possible.

2.  All access to cargo spaces including hatch covers, to be sealed upon completion at the load 

port, again with the involvement of the local customs authorities if possible.  

3.  Before the ship’s arrival in Argentina, collated letters are to be passed by the agents to 

customs/receivers inviting them to carry out a joint draught survey on arrival and then to jointly 

proceed with the breaking of the seals placed at the load port.

4.  Upon completion of di scharge “empty holds certificate” to be jointly issued between all parties

concerned. 

It is likely that both customs and receivers will refuse to attend a joint survey or the unsealing of hatches as in line with Argentinean customs regulation the weighing method utilising shore scales is used by receivers. If proceedings are commenced for any cargo discrepancies, the completion of the aforementioned steps will give the attending lawyer additional means to try to defend the charges/fines, stating that both customs and receivers were given the opportunity to attend onboard to verify the cargo quantities.

Members are therefore advised to, at the very least, conduct a draught survey. They should also be 

ready for a LOU to be issued in agent’s favor in case of any discrepancies upon completion of discharge and before the vessel sails.”  

If Members require advice with regard to challenging fines and additional customs duties imposed byArgentinean authorities they should contact the Managers in the normal way.