Customs evasion and customs criminal proceedings – Criminal consequences of missing or incorrect customs declarations
Customs criminal law lies at the intersection of international trade, European customs law, and national criminal law. For companies with cross-border supply chains, logistics providers, importers, exporters, or individuals handling excise goods such as alcoholic beverages or tobacco products, customs criminal investigations can have significant economic and personal consequences. Private individuals, too, may come under the scrutiny of customs authorities – for example, during travel or cash checks.
These cases often involve allegations of import duty evasion. Typically, the responsible customs office or customs investigation department then initiates criminal customs proceedings.
The relevant criminal provisions – in particular Sections 369 et seq. of the German Fiscal Code (AO) – are so-called blanket provisions. This term refers to a criminal provision that refers to other legal acts. In the case of customs criminal law, the criminal assessment of conduct only becomes clear in conjunction with the Union Customs Code (UCC), the associated European and national regulations, and excise duty provisions. For defendants, this means that the criminal assessment depends on complex preliminary questions of customs and tax law.
Errors in customs declarations, incorrect tariff classifications, violations of import prohibitions, or incomplete information regarding customs value and origin of goods can have legal consequences. In addition to fines or imprisonment, confiscation measures, asset seizures, and significant reputational damage are possible.
The defense against charges of customs evasion focuses particularly on examining whether false information was provided or information was omitted, whether and to what extent tax evasion occurred, and whether intent can be proven. Our lawyers at Galen Rechtsanwälte possess extensive expertise and advise and represent clients nationwide in customs and white-collar crime proceedings.
What is meant by customs criminal law and customs evasion? – Typical offenses in customs criminal law (§§ 369–374 AO)
Customs criminal law is systematically classified under tax criminal law. Import and export duties are treated as equivalent to taxes according to Section 3 Paragraph 3 of the German Fiscal Code (AO). Customs offenses include:
- Customs evasion (§ 370 AO)
- Breaking the ban (§ 372 AO) – Violation of import, export and transit prohibitions
- Commercial, violent or organized smuggling (§ 373 AO) – Customs evasion or breach of customs regulations in cases of commercial activity, use of force, organized crime or the use of firearms
- tax evasion (§ 374 AO) – Illegal trade in goods imported in violation of § 370 or § 372 AO
- Value stamp forgery, insofar as the act concerns tax stamps (§ 148 StGB)
In addition, there are numerous customs offenses under Sections 377 et seq. of the German Fiscal Code (AO), which are punishable by substantial fines.
Customs criminal law primarily affects individuals in internationally operating companies. Global supply chains, complex customs tariffs, and embargo regulations significantly increase the risk of (even unintentional) criminal liability.
The central criminal provision in customs criminal law is customs evasion under Section 370 of the German Fiscal Code (AO). Anyone who provides incorrect or incomplete information to the customs authorities regarding tax-relevant facts, unlawfully omits information, or unlawfully fails to use tax stamps and tax labels is liable to prosecution. This conduct constitutes customs evasion if it results in a reduction of import or export duties, or at least the obtaining of an unjustified tax advantage. A reduction occurs even if the duties are not assessed, not assessed in full, or not assessed on time.
Typical scenarios include inaccurate information on customs value, incorrect tariff classifications, incorrect proof of origin, or simply the failure to submit a customs declaration upon import. Intent is required with regard to all objective elements of the offense. Conditional intent is sufficient. Negligent conduct can be punished as an administrative offense of reckless tax evasion pursuant to Section 378 of the German Fiscal Code (AO).
Typical errors in customs declarations – When is criminal prosecution a possibility?
Customs criminal proceedings are frequently initiated by inspections conducted by the main customs offices or the customs investigation unit. In practice, customs offices often begin their investigations as part of a customs audit; not infrequently, this is followed directly by criminal proceedings. The trigger can be discrepancies in the customs declaration.
Random audits by customs offices and customs controls under the Union Customs Code often lead to the initiation of criminal proceedings. Furthermore, tax authorities can conduct investigations into tax-relevant facts during a so-called follow-up review. In passenger traffic, checks at border crossings, such as at airports, can trigger investigations. International exchange of information with foreign tax authorities regarding cross-border matters can also result in customs criminal proceedings.
The public prosecutor's office only conducts the investigation if it is transferred to them or if they take over the case. Otherwise, the customs administration conducts the investigation itself. The customs investigation unit – the "criminal police of customs" – may search business and private premises to secure documents and data for the investigation. Furthermore, goods and documents may be seized and confiscated, and asset freezes may be issued to secure potential confiscation.
Penalties for customs evasion – imprisonment, especially serious cases and confiscation
The penalty for customs evasion under Section 370 of the German Fiscal Code (AO) ranges from a fine to five years' imprisonment. In particularly serious cases, the penalty increases to six months to ten years' imprisonment. The specific sentence depends primarily on the amount of import duties evaded, the duration of the offense, and the offender's conduct during and after the crime.
In cases of commercial, violent or organized smuggling (§ 373 AO), a prison sentence of six months to ten years is provided for; in less serious cases, a prison sentence of up to five years or a fine is provided for.
Under German law, companies themselves cannot be held criminally liable. However, if managers have committed offenses, they face fines under the Administrative Offenses Act (§ 30 OWiG). Furthermore, the authorization of Authorized Economic Operator (AEO) status and other customs authorizations can be revoked. Customs offenses under § 377 AO can be punished with substantial fines.
In addition to the main penalty, asset confiscation is of considerable practical importance. Assets can be provisionally secured through seizure as early as the preliminary investigation. Ultimately, proceeds of crime can be confiscated pursuant to Sections 73 et seq. of the German Criminal Code (StGB). Confiscation is often the most severe economic consequence of customs criminal proceedings. Calculating the amount of tax evaded is crucial in this regard. Performing this calculation is often complex and requires careful review within the framework of the defense.
Criminal defense in customs-related criminal cases – your legal advice and representation by Galen Lawyers
Our lawyers at Galen Rechtsanwälte advise and defend clients nationwide in cases involving white-collar crime and customs offenses. We have extensive forensic experience in complex economic proceedings and represent both individuals and companies.
Customs criminal investigations require an early, strategic approach. Crucial decisions are made during the investigation phase, for example, in connection with searches, arrests, or initial interrogations of suspects. How these measures are handled can significantly influence the further course of the proceedings.
Our lawyers prioritize a structured approach that fully considers your interests. We begin by requesting access to the case file, analyzing the customs and tax law basis of the alleged offense, and then developing a defense strategy tailored to your specific needs.
We accompany you during searches, advise you on how to remain silent, and defend you at all stages of criminal proceedings. Our goal is to consistently enforce your rights and minimize the impact of the proceedings on your professional and financial life.
Please contact us to arrange an appointment.
Customs evasion occurs in particular when incorrect or incomplete information is provided to the customs authorities, or when required information is omitted, thereby reducing import or export duties. The legal basis is Section 370 of the German Fiscal Code (AO) in conjunction with Section 369 of the German Fiscal Code (AO).
Smuggling under Section 373 of the German Fiscal Code (AO) is a criminal offense committed by anyone who evades import or export duties or violates a customs embargo on a commercial, violent, organized, or firearms basis. The penalty is significantly increased, ranging from six months to ten years imprisonment. In less serious cases, the penalty is imprisonment for up to five years or a fine.
Negligent violations are generally not criminal offenses, but may constitute an administrative offense. For example, reckless tax evasion can be punished with a fine according to Section 378 of the German Fiscal Code (AO).
The Union Customs Code (UCC) is the central legal basis under EU law for customs procedures and governs, among other things, customs clearance in the member states and the levying of import VAT on goods imported from non-EU countries. Violations of the obligations stipulated therein can form the basis for criminal liability under national law.
As a suspect, you are not obligated to comply with a summons from the police or customs investigation. You must appear if summoned by the public prosecutor's office or a court, but you are not required to give a statement. Stricter rules apply to witnesses, but they have the right to refuse to give information if it would incriminate them. Any statement should only be made after consulting a lawyer.
Confiscation means that assets obtained through the crime are seized. These assets can be secured through seizure as early as the investigation stage. This can have significant economic consequences.
Under German law, companies are not criminally liable. However, if managers commit criminal offenses, fines can be imposed under Section 30 of the Administrative Offenses Act (OWiG).
Customs administrative offenses are less serious violations of customs law obligations, which, according to §§ 377 ff. AO, are not considered criminal offenses but are punished with a fine.
As soon as you become aware of an investigation – for example through a search, a hearing or a summons – you should seek legal advice immediately to protect your rights.