Branch-Setting Precedent in Customs Disputes: Courts Uphold Classification of Winemaking Equipment

Belskiy and Partners has successfully represented one of Russia’s leading suppliers of winemaking equipment in a complex customs dispute. The matter was led by Alexey Kizerev, Counsel and Head of the Firm’s Foreign Economic Activity and Customs Law Practice.

The client operates nationwide, with established infrastructure across Russia’s key regions and a broad partner network. Its counterparties include major federal retail groups — Auchan, Lenta, METRO, Perekrestok, Magnit, Pyaterochka, and Azbuka Vkusa — as well as prominent Russian and international companies.

The dispute arose after customs authorities challenged the classification code declared for imported winemaking equipment. The authorities alleged an incorrect classification and treated the issue as an underpayment of customs duties, exposing the client to significant financial claims and potential criminal law implications.

The Firm developed a comprehensive litigation strategy aimed at confirming the correctness of the declared classification, overturning the customs authorities’ decisions, and recovering overpaid duties, taxes, penalties, and interest. Particular attention was given to eliminating any risk of liability under Article 194 of the Criminal Code of the Russian Federation.

The proceedings were marked by substantial procedural complexity. The statutory deadline for an administrative appeal had been missed for objective reasons, and post-clearance amendments to the customs declaration were no longer available. In these circumstances, the team initiated a property claim seeking to compel the customs authorities to refund the overpaid amounts. Additional complexity arose from the fact that the classification decision and the collection of payments were handled by different customs bodies, requiring the courts to address jurisdictional issues.

Both the court of first instance and the appellate court upheld the Firm’s position in full. The courts ruled that the customs payments accrued as a result of the reclassification — and overpaid by the client — must be refunded by the Central Customs Administration.

As a result, the client obtained a full refund of unlawfully collected customs duties, penalties, and interest. The courts also confirmed the correctness of the classification, establishing legal certainty for future imports of identical equipment.

The decision is of particular importance for companies operating in the food-processing and winemaking sectors, significantly reducing the risk of retrospective reassessments, administrative sanctions, and criminal exposure.