The issue of temporary admission for yachts in Italy is connected to the crime of customs smuggling, governed by Articles 282 and ff. of the Italian Consolidated Law on Customs Regulation. More in detail, it is connected to the violation of financial regulations, and, in particular to:
- Laws imposing export duties on foreign goods;
- Bans on foreign good entry into and exit from national borders;
- Fraudulent conducts relating to internal customs duties and to State Monopolies.
The above mentioned offence frequently takes place in the following cases:
- Transfer of goods across land borders and within customs areas;
- Transfer of goods across border lakes;
- Transfer of goods by sea;
- Transfer of goods by air;
- Transfer of goods in duty free areas;
- Misuse of goods imported with customs facilitations;
- Storage of goods in customs warehouses;
- Cabotage and free circulation of goods;
- Export of goods subject to drawback of duties;
- Temporary export of goods.
As regards sanctions, made exception for those cases specifically provided for by law, the Italian law provides that non-payment of customs duties is punished with an administrative fine amounting from a minimum of twice to a maximum of ten times the amount due.
It is worth remembering that the Italian Legislative Decrees no. 7/2016 and 8/2016 (in force since 6 February 2016) have turned into administrative offences (among which customs smuggling) many offences previously provided for by the Italian Criminal Code and by special laws (decriminalization).
After this reform, therefore, the so called "simple customs smuggling" offences, i.e. cases of non-payment of customs duties punished with an administrative fine amounting from a minimum of twice to a maximum of ten times the amount due, are currently punished with an administrative fine of variable amount, ranging from 5,000.00€ up to 50,000.00€. Aggravated smuggling, instead, is still punished with imprisonment, only pecuniary penalties vary.
Temporary admission for yachts: overcoming the period of discharge for non-EU yachts
While recreational craft and fishing vessels flying the flag of a EU-country are not subject to any limitations, non-European recreational craft and fishing vessels are subject to the Geneva Convention of 1956 on temporary admission/importation and to the Istanbul Convention of 15 March 1993.
The customs regime of temporary importation (the so called temporary admission) allows yachts from non-EU countries (including non-EU goods) to be admitted in the EU area with total or partial relief from importation duties, without being subject to other duties nor to commercial policy measures.
Temporary admission of non-EU yachts in European waters is possible, provided that:
- Non-EU yachts have been registered outside the European community, to the name of a specific person;
- Non-EU yachts are used by a specific person outside the customs territory of the Community, with certain exceptions;
- Non-EU yachts can be destined, in case of transport by road, only for private and not commercial use;
- Non-EU yachts have a civil liability policy for damage caused by their ships to third parties (green card).
The authorization to temporary admission and importation is issued by the customs authority and the presence of a non-EU yacht in Community waters is allowed for a maximum of 18 months (the so called "period for discharge"), after which the yacht has to leave the Community territory, in order to prevent permanent importation, and payment of customs duties, as well as payment of the penalties applicable in case of "customs smuggling". For vessels laying up some exceptions are made to the above mentioned term of 18 months.
Therefore, yachts flying a non-EU flag, as soon as they enter Community waters, must obtain a declaration of arrival, issued by the Maritime Authority of the first national port of call. A declaration of arrival is valid for 12 months and must be renewed before its expiry.
Temporary admission for yachts: no VAT on worksite operations of non-EU yachts
Yachts which are temporary imported into the EU-Community, and thus into the Italian territory, for purposes of construction, maintenance or assembling in the shipyard are exempted from paying importation duties, pursuant to Article 9(1), no. 2 of the Decree of the President of the Italian Republic 633/1972, which considers transports of export, transit of temporary importation goods as non-taxable goods.
These cases are not subject to temporary importation laws, but to inward processing arrangements, allowing to refit non-EU yachts in Italy in a VAT exemption regime.
In order to take advantage of the interruption of a period for discharge some fulfilments are required, such as submitting a request to the competent customs authority of the place where the yacht is laid up.
Temporary admission for yachts: appeal against the legality of the seizure e administrative proceeding
Article 20 of the Italian law no. 689/1981 provides that following assets are subject to preventive seizure:
- Assets which are used to commit an offence;
- Assets which are the result of an offence;
- Assets whose production, use, transport, possession or transfer constitute an administrative offence.
Administrative preventive seizure by the Customs Agency begins with the notification of a Report of Contested Violations. This latter – under pain of nullity – should include:
- all personal details of the parties involved;
- the reason why, according to Customs authorities, there is an infringement of Customs laws;
- the deadline by which the interested party can make objections in its own defence;
- information about operators;
- number and kind of customs seals to be affixed.
If, on the basis of the objections, the Report of Contested Violations is held to be defective or mistaken, the proceedings against the interested party are dropped;
The interested party can appeal against the order for payment and against administrative confiscation, as the case may be, either before the Justice of the Peace or before the Court having local jurisdiction.
The period for appeal is 30 days for persons residing in Italy and 60 days for persons residing abroad.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.