US embassy cable - 04MADRID841

UNCLAS SECTION 01 OF 02 MADRID 000841 
 
SIPDIS 
 
STATE PASS TO USTR POSNER, MOWREY AND RHODE 
 
E.O. 12958: N/A 
TAGS: EFIN, SP, ETRD. EU, WTO, USTR, Trade Issues 
SUBJECT: Spanish Customs Administration 
 
REF: State 42299 
 
1.  This cable contains responses to reftel cable re: EU 
member state customs regimes. Responses are queued to 
questions listed in reftel para 6. We collected the 
information during routine visits with Customs and business 
contacts. 
 
A. CUSTOMS PROCEDURES The formal procedure is comprised of 
two steps, each with its respective time period.  The first 
step begins upon the arrival of goods from outside the EC, 
at which time the importer has twenty-four hours to make a 
summary declaration of the goods.  Many importers provide 
this declaration even before their goods arrive in a Spanish 
port or airport to help speed up the process.  The summary 
is transmitted electronically to a central office, where the 
information is reviewed.  The Customs Administration does a 
risk analysis of the goods, and color-codes the imports 
according to their degree of risk.  About 80% of the goods 
are marked "green" and are released into the stream of 
commerce without any additional review.  The next status is 
"orange," which requires further examination of documents 
and later will be marked "green" or "red."  Approximately 
10% of goods are labeled "orange," primarily for sanitary 
and phytosanitary concerns.  The other status is "red" 
(roughly 5% of goods), which requires the examination of 
both documents and goods. 
 
The second step involves a more specific declaration of the 
goods imported and includes a declaration of value and 
destination.  The time limit on this step varies depending 
on whether the goods arrive via air or sea.  If the goods 
arrive by air, the importer has twenty days to make a 
declaration, while goods that arrive by sea have a more 
generous time period of forty-five days.  There are three 
points in time when Customs may choose to reevaluate its 
valuation: 1) when Customs is initially reviewing documents 
for an orange or red status shipment; 2) during subsequent 
office reviews of documents for green status shipments that 
have already entered; and 3) after Customs does routine 
annual on-site inspections. 
 
B. APPEALS PROCESS If the importer wants to appeal the 
decision of Customs authorities, especially in the case of a 
discrepancy in the valuation of customs duties, then the 
appeal would be directed at the Tax Collection Department 
(Departamento de Recaudacion) of the Tax Administration 
(Administracion Tributaria).  This is the only part of the 
Tax Administration empowered to hear claims and make 
reimbursements.  Importers have two appeals-the decision on 
the first appeal must be made within 15 days. If the 
importer chooses to appeal a second time, the Collection 
Department must review within 15 days.  If the importer is 
still not satisfied, he can then take the decision to court. 
If the claim is not resolved after exhausting national 
means, the appeals process can be taken to the European 
level, but most appeals are solved within the Department. 
 
C. See response to question A. 
 
D. PENALTIES Customs tax fraud is considered to be the 
incomplete disclosure in the declaration to customs 
authorities.  Penalties fall into the following three 
categories depending on the gravity of Customs law 
violations: minor, severe, and very severe.  The penalty is 
always issued as a fine, which depends on the degree of the 
violation.  If the fines total more than 30,000 euros 
($36,900 at exchange rate of 1.23), then authorities can 
impose additional non-monetary sanctions. 
 
E. RECORDS Spanish Customs retains records for four 
years-the law requires them to retain records for three 
years for customs purposes, but for four years for Value 
Added Tax records. The three years leeway allows Customs 
authorities the possibility to review records, and 
subsequently collect customs duties that were insufficient. 
 
F. GUIDANCE Exporters can request guidance from Spanish 
Customs if they have any uncertainties over classification 
and evaluation of goods.  The exporter simply submits a form 
to Customs authorities.  Customs authorities usually respond 
in 15 days (however it can take up to 2 months depending on 
the number of requests they receive).  If the exporter does 
not agree with Customs, then he has the opportunity to make 
an appeal within fifteen days. 
 
G. EU MEMBER STATES In theory all Customs of the member 
states should operate in the same manner.  However, business 
contacts and Spanish officials say Dutch Customs are less 
stringent than their Spanish counterparts.  A business 
contact told us that Spanish Customs is comparable to the 
authorities in Italy and Greece.  For the most part, our 
business contacts were not aware of discrepancies in customs 
duties in different member states, however we are aware of 
one American company that has been unable to resolve a 
Spanish Customs valuation that differs from the valuation in 
another member state. 
 
2. Spanish Customs and the Tax Collection Department are the 
only two departments under the Spanish Tax Administration 
that are involved with customs regulations.  The Tax 
Administration is part of the Spanish Treasury Department. 
 
3. In 1995, Spain began incorporating information technology 
into its customs procedures.  Now, at least according to 
Spanish Customs authorities, Spain's Customs Department is 
the most technologically advanced of the EU-15 member 
states.  A business contact confirmed that the system is 
completely electronic and works smoothly.  Spanish Customs 
Agents also claim that Spain's customs procedures are 
stricter than countries with larger volumes of imports, such 
as Holland, Belgium, and Sweden (our Customs contacts 
referred to Holland as the "colander of Europe").  Despite 
the stringent process, Spain's Customs Department seems to 
function efficiently as information is processed 
electronically and centrally.  Spain has also made the 
process more efficient by making arrangements with importers 
from reputable multinational companies.  In this 
preferential agreement, companies make a guarantee payment 
of customs duties, and their goods are released immediately 
into the stream of commerce.  They are billed monthly for 
customs duties. 
 
ARGYROS