Customs tax evasion in Germany

By Dr. Julius Hagen, Attorney at Law

Defence in German customs tax evasion cases

Customs tax evasion in Germany is, in substance, tax evasion under German law in a customs context. The criminal allegation, however, depends on customs duties that are often shaped by EU customs law. A defence therefore has to address both levels. An incorrect declaration, customs value issue or failure to discharge a customs procedure may trigger additional duties, interest, risks for customs authorisations and a criminal investigation by customs authorities.

How customs authorities turn revenue issues into criminal allegations

German customs authorities usually start from the revenue side. If goods were wrongly declared, not presented to customs, classified under the wrong commodity code or imported with incorrect information on origin or value, the first issue is whether duties were not assessed, under-assessed or assessed too late. From there, the authorities may infer that legally relevant facts were misstated or withheld.

An incorrect commodity code, an understated transaction value, omitted licence fees, unclear Incoterms or missing freight costs are initially factual and legal issues. They become a criminal allegation only if the authorities can also prove that the person involved knew of the inaccuracy or accepted it as a risk.

Customs debt, under-assessment and personal attribution

A customs debt may arise without customs tax evasion. Criminal liability requires more than the existence of duties. The relevant question is whether the authorities were prevented from assessing duties correctly and in time because of false information, withheld facts or a failure to act.

Three issues often shape the direction of the case. When did the customs debt arise? How high is the alleged under-assessment? Who can be personally linked to the relevant declaration or omission? In international supply chains, the person filing the declaration, the person providing the data and the person benefiting from the import are not always the same. This is often where the prosecution theory can be challenged.

Incorrect declarations, customs value and tariff classification

The allegation often starts with a technical entry. The commodity code determines the applicable duty rate. The customs value determines the basis for calculation. The origin of the goods may affect preferences, anti-dumping duties or trade policy measures. A mistake in any of these areas may have serious financial consequences without automatically proving criminal liability.

It matters whether the declaration was objectively wrong, whether the position was legally arguable and what information was available at the time. Relevant evidence may include supplier emails, technical product descriptions, binding tariff information, previous customs audits, internal approvals and instructions from freight forwarders. A later disagreement with customs does not by itself prove prior intent.

Breaches in special customs procedures

Special customs procedures may become criminally relevant where goods were not properly presented, transit procedures were not discharged on time, storage conditions were breached or processing steps were carried out outside the authorisation. For customs debt purposes, this may be sufficient. For criminal liability, the additional question is whether the breach shows deliberate avoidance of duties or an error in a complex operational process.

Typical defence questions concern the route of the goods, responsibility for discharging the procedure, communications with freight forwarders or warehouse operators and the company’s documentation. A missed deadline, quantity discrepancy or missing document may justify a customs assessment, but it does not automatically prove intentional customs tax evasion.

Parallel customs and criminal proceedings

Customs tax evasion cases in Germany often proceed on two tracks. The main customs office may assess duties, request documents or conduct an audit. At the same time, customs investigators or the fines and criminal matters unit may investigate a criminal offence. The practical problem is that duties to cooperate in the customs procedure do not align with the right to remain silent in the criminal procedure.

A statement that appears useful from a customs perspective may create criminal exposure if made without knowing the status of the investigation. Conversely, criminal defence must not ignore the commercial consequences of assessments, interest, securities, customs authorisations or AEO status. Before any statement or correction is filed, it must be clear whether the response is being made to the main customs office, the fines and criminal matters unit or customs investigators – and what criminal consequences it may have.