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Ilyashev & Partners Sought For Reimbursement of Two-Year Duty Overpayment to Druzhkovkа Hardware Plant

30/ 03/ 2021
  As a matter of court litigation procedures, Ilyashev & Partners Law Firm proved that customs authorities had wrongfully interpreted a decision of the Interdepartmental Commission on International Trade on application of anti-dumping duty based solely on the UTKZED code and the country of origin, without taking the goods’ description into account. According to decision of the Interdepartmental Commission on International Trade, anti-dumping duty was applied to imports of reinforcement steel and rolled steel that fall within the appropriate goods’ description. However, Donetsk Customs Office of the State Fiscal Service of Ukraine insisted on payment of anti-dumping duty similarly for bar iron, which belongs neither to reinforcement nor to rolled steel by its description, but is classified under the same UTKZED codes as these. Following numerous addresses seeking clarifications to the State Fiscal Service by Druzhkovka Hardware Plant PrJSC, Ukraine’s leading metalware manufacturer, the fiscal authorities acknowledged that they had been acting wrongfully. However, the customs office rejected reimbursing the amounts of anti-dumping duty, charged and paid by the enterprise over the course of 2018-2019 pertinent to the supplies of raw materials, i.e., bar iron for manufacturing metalware products. As a matter of defending the plant’s lawful interests, Ilyashev & Partners challenged the customs’ actions at court. On 18 March 2021, the Supreme Court awarded a final and binding judgement for the benefit of Druzhkovkа Hardware Plant. The court obliged the customs office to recurrently review the plant’s solicitation of reimbursing the overly paid amounts of the state duty and to report the reimbursement hereof to the State Treasury Service. The court judgement has now been enforced and the funds have been reimbursed to the plant in their entirety. “This is one of the first cases when an enterprise would prove as a matter of court litigation procedures that anti-dumping duty was payable based on the goods’ description rather than on the UTKZED code, — stressed Partner, Attorney at Law, Head of International Trade Practice Olena Omelchenko. — The court came to the conclusion that the customs office’s resolution to insist on paying anti-dumping duty had been adopted in excess of powers and in breach of the procedure, set out in currently applicable laws”. Interests of Druzhkovkа Hardware Plant were represented on all tiers of court litigation by the team of Ilyashev & Partners Law Firm under supervision of Partner Olena Omelchenko and Head of Kharkiv Office Andriy Lytvyn. Druzhkovka Hardware Plant PrJSC specializes in the production of metal products: bolts, nuts, rivets for general machine-building, fasteners for the upper structure of railway tracks, high-strength fasteners for engineering and bridge structures according to the normative documentation. The plant’s range of products is used by Ukrainian railways and exported to Poland, Turkey, Moldova, and Kazakhstan.

As a matter of court litigation procedures, Ilyashev & Partners Law Firm proved that customs authorities had wrongfully interpreted a decision of the Interdepartmental Commission on International Trade on application of anti-dumping duty based solely on the UTKZED code and the country of origin, without taking the goods’ description into account.

According to decision of the Interdepartmental Commission on International Trade, anti-dumping duty was applied to imports of reinforcement steel and rolled steel that fall within the appropriate goods’ description. However, Donetsk Customs Office of the State Fiscal Service of Ukraine insisted on payment of anti-dumping duty similarly for bar iron, which belongs neither to reinforcement nor to rolled steel by its description, but is classified under the same UTKZED codes as these.

Following numerous addresses seeking clarifications to the State Fiscal Service by Druzhkovka Hardware Plant PrJSC, Ukraine’s leading metalware manufacturer, the fiscal authorities acknowledged that they had been acting wrongfully. However, the customs office rejected reimbursing the amounts of anti-dumping duty, charged and paid by the enterprise over the course of 2018-2019 pertinent to the supplies of raw materials, i.e., bar iron for manufacturing metalware products.

As a matter of defending the plant’s lawful interests, Ilyashev & Partners challenged the customs’ actions at court.

On 18 March 2021, the Supreme Court awarded a final and binding judgement for the benefit of Druzhkovkа Hardware Plant. The court obliged the customs office to recurrently review the plant’s solicitation of reimbursing the overly paid amounts of the state duty and to report the reimbursement hereof to the State Treasury Service. The court judgement has now been enforced and the funds have been reimbursed to the plant in their entirety.

“This is one of the first cases when an enterprise would prove as a matter of court litigation procedures that anti-dumping duty was payable based on the goods’ description rather than on the UTKZED code, — stressed Partner, Attorney at Law, Head of International Trade Practice Olena Omelchenko. — The court came to the conclusion that the customs office’s resolution to insist on paying anti-dumping duty had been adopted in excess of powers and in breach of the procedure, set out in currently applicable laws”.

Interests of Druzhkovkа Hardware Plant were represented on all tiers of court litigation by the team of Ilyashev & Partners Law Firm under supervision of Partner Olena Omelchenko and Head of Kharkiv Office Andriy Lytvyn.

Druzhkovka Hardware Plant PrJSC specializes in the production of metal products: bolts, nuts, rivets for general machine-building, fasteners for the upper structure of railway tracks, high-strength fasteners for engineering and bridge structures according to the normative documentation. The plant’s range of products is used by Ukrainian railways and exported to Poland, Turkey, Moldova, and Kazakhstan.

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