7th Symposium of Lawyers - Judit Somlo 2

“Diversity of controls and sanctions in goods road transport: helping your hauliers through the maze of unharmonised applications”

Customs Control Policy and Applied Sanctions in Road Freight Transport

Dr Judit SOMLÓ, lawyer, Legal Advisor of MKFE, Hungary
7th Symposium of Lawyers, Members of the IRU Legal Assistance Network
St. Petersburg, 30 April 2008

Customs Functions and Structure

In Hungary, the Customs and Finance Guard (furthermore Customs) has a very significant control power beyond the narrow field of classical customs control. Customs controls the transport of arms, that of ammunitions, drugs, radioactive materials and military articles, high technology products and excise goods (tobacco, alcohol, and oil products), etc. It controls also the trade in products subsidised by the EU and/or under protected trademarks to fight commerce in counterfeit articles. It checks export/import cargo at the EU’s external borders as well as processes TIR carnets for transit cargo and other customs documents. It has important tax control functions.

With Hungary’s accession to the EU, the emphasis has moved from traditional customs control to road side checks of road transport activities and from borders to controls by mobile units along the roads within the country.

The Law on road transport has mandated Customs to control road goods and passenger transport and it carries out these activities very forcefully indeed. In 2007, an administrative penalty was imposed in almost 13’000 cases on passenger and goods transport operators. In the same period, Customs controlled more than 42.000 drivers in respect of the proper implementation of the AETR provisions.

The hierarchical structure of Customs consists of three layers, the functions and competences of which are determined by law . I shall tackle only the most important of these structures and functions in this paper.

The highest level is the National Directorate of the Customs and Finance Guard which is the appeal forum against first degree decisions of medium level bodies. It cooperates with the respective EU authorities, like EC TAXUD or OLAF; it also drafts regulations governing the functioning of subordinate organisations and audits their implementation.

Medium level bodies are the Regional Directorates, the Central Directorate of Control and Crime Pursuit, Regional Inspectorates and the Central Directorate for Patrolling. Regional Directorates are entitled to decide on appeals against decisions taken by base level subordinate bodies.

Base level organisations are directly in charge of customs controls and other controls at borders and anywhere else in the country. These are often conducted by mobile patrols. They take the first level decisions which may concern also road transport such as in case penalties are imposed due to offences in passenger and goods transport which may go as far as retaining vehicles, a measure of great concern for transport operators.

Beyond the Customs, the Hungarian Law on road transport mandates also the Transport Inspectorate, the Police and the Employment Office as well as the Catastrophe Prevention Agency to exercise certain control functions of relevance for road transport.

Customs carries out controls at locations mentioned above; the Transport Inspectorate does the same on the roads and at company plants/offices, the Police, which integrates also the border guard, on the roads and at borders, the Employment Office and the Catastrophe Prevention Agency on the roads and at company plants.

Main Types of Customs Controls regarding Road Transport

Customs have the right to control vehicles participating in international traffic in respect of the following aspects:

• Transport operations subject to licensing, advance notification and special documents
• Own-account transport subject to the availability of certain documents
• Compliance with provisions of the Regulation 561/2006/EC and those of AETR regarding driving and rest time
• Compliance with provisions of the Regulation 3821/85/EC on the tachograph
• Vehicles used for transporting dangerous goods and these vehicles’ staff, consignors, consignees and persons temporarily storing such goods, and other related transport procedures
• Compliance with provisions on the transport of perishable foodstuff and live animals
• Compliance with rules on road transport in rented vehicles
• The technical state of and observance of environmental requirements related to vehicles
• Compliance with regulations on international combined transport

These conditions are to be checked by Customs mainly regarding vehicles used in international traffic but the observance of rules in respect of driving and rest time, the use of tachographs and the transport of dangerous cargo is also checked for domestic traffic in co-operation with other control agencies.

Control conducted by Hungarian Customs is in function of the type of operators, i.e. whether they do own-account or hire and reward operations and cover the following documents:

• Availability of an operator licence in case of hire and reward activities
• Certified copy of the Community licence in case of vehicles with an EU registration plate
• The availability of a road transport permit based on bilateral road transport agreements or an ECMT licence on board a vehicle registered in a non-EU country
• Vehicle registration certificate
• Vehicle technical certificate on periodical control
• Certificate of approval of the vehicle and a valid TIR Carnet in case of TIR transport
• CMR consignment note in case of an international transport, consignment note in case of a domestic transport, certificate and waybill as per legal requirements in case of an own-account transport
• Tachograph verifying label and documents if the use of the tachograph is obligatory on board the vehicle
• ECMT certificate for the tractor and the trailer as per vehicle category
• Authorisation in case of exceeding permissible weight limits or dimensions
• Documentation of live animal transport, veterinary and phyto-sanitary certificates
• Driver documents such as: driving licence, driver qualification certificate, driver attestation if an EU-registered vehicle is driven by a non-EU citizen, driver certificate as per Regulation 2205/1/EC regarding live animal transport, if applicable, tachograph discs for periods prescribed by AETR or 561/2006/EC or a digital driver card, an activity certificate if during a given period the driver has not worked or does not have a disc or digitally registered data for any other reason, driver ID card containing also his/her home address, passport and visa according to visa arrangements in force, health and accident insurance police, etc.
• Customs documents, commercial invoice, loading list
• Driver employment certificate and vehicle rental document
• In case of ADR transport, vehicle approval certificate, packaging documentation, written instructions, driver training and test certificate, dangerous goods transport permit, certificate of the Dangerous Goods Transport Safety Advisor, various documents relating to vehicle identification, vehicle equipment, packaging, loading (all these documents are required by ADR according to a checklist of 61 items)

This list does not cover all possible cases and types of road goods transport but it reflects the manifold tasks and obligations of transport operators and drivers as well as control authorities.

The Fines

In case of irregularities regarding the above items, such as the lack of documents and certificates, or their incorrect contents, Customs may impose a fine of HUF 50’000-800’000 (Euro 200–3’100) according to a list of penalties fixed by a respective Government Regulation .

The Regulation defines precise amounts of fines for each offence and there is no possibility for the control officer to consider any attenuating circumstances. There is only one preference given to the operators: in case of the lack of a document, 50% of the fine may be annulled if the person or operator fined presents the document in question within 8 days following the control provided that the document concerned was valid at the time when the control was conducted (e.g. the driver simply forgets to take a document otherwise available).

Customs and other control authorities have the right to retain the vehicle until the payment of the fine and in certain cases they may impose the eradication of the irregularity with immediate effect.

There is a possibility of filing an opposition against decisions on a fine within 15 days from the date of the decisions’ delivery. It will be decided upon by a superior Customs organisation. The opposition should be filed with the organisation having made the decision of the first instance paying in parallel an appeal fee which is HUF 400 (Euro 1.5) per HUF 10’000 (Euro 40) of the fine, the minimum being HUF 5’000 (Euro 20) and the maximum HUF 500’000 (Euro 2’000).

Need for Improvements

Practical experience shows that this Government Regulation about the fines should be refined in several points:

• There is no provision on who should be fined, whether the holder of the vehicle or the driver or the consignor in the individual cases. Thus, the force of retention of the Regulation does not really function.
• There is no unique legal practice; a number of Customs entities target the operator, other ones the driver, because the rules do not say which actor perpetrating the offence should face the penalty
• There is no provision about sharing the fine and therefore responsibility sharing is also out of question
• There would be a need to differentiate penalty levels in function of whether the driver or the company is subject to the fine duly considering that they do not possess the same financial means
• Due to the lack of pertinent provisions, the authority cannot define a “lump sum-type” fine in case of several accumulated offences which normally would be a lesser amount than the simple addition of individual fines (e.g. as in criminal law if a person is accused of a number of criminal acts and a “lump sum-type” sentence is imposed by the Court, which is less important than what the result would have been of adding up the possible penalties separately for each individual crime)
• It would be necessary to fix also a maximum total limit of accumulated fines due as a consequence of a number of offences committed since there is a real danger that even harmless administrative irregularities may lead to the bankruptcy of the transport operator concerned
• It is not clear if handing over a decision to the driver is to be considered as a delivery to the transport company while it may be decisive regarding appeal deadlines
• The control authority should have the right of considering circumstances as whether the operator is a one-off or a regular offender

Outlook

In view of the fact that this Regulation is relatively recent, we hope that the government will consider, on the basis of practical experiences, the possibility of introducing the necessary modifications soon.

There have recently been regular accusations against the Hungarian Customs of practicing discrimination against operators of a few countries. Any sort of discrimination is intolerable.

According to Customs statistics however there is a high frequency of rule violation by operators of countries having just recently acceded to the EU. This is certainly due to the difficulties of an adaptation process to a new legal environment. This has earlier been experienced also with Hungarian operators and drivers carrying out operations abroad. It is also true that since Customs conducts control activities often at borders, the more regularly an operator crosses the Hungarian border, the more frequently it may be subject to a control.

An international exchange of control authorities on best control practices as well as a certain degree of international harmonisation of offence and fine categorisation would certainly contribute to a positive development in Hungary and other countries.

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