The cost of temporarily importing: insured risk vs premium

1. Introduction

Many of the failures linked to what the insurance company must face in the event of definitive importation for consumption^[1] (nationalization) of merchandise that was previously imported under the temporary import regime[2], has led me to investigate whether the importers contracting the guarantee are (or are not) assuming the “correct insurance premium”, the one that corresponds, that is, the one in accordance with the true risk insured in each specific case.

To introduce this topic, often overlooked by those who calculate the costs of importing merchandise into our customs territory, I propose to analyze different rulings - of peaceful application to customs litigation - and then transfer the economic consequences that they could have if they were projected to the stage of formation of the surety insurance contract for temporary imports.

In this way I take on the challenge of giving my opinion[3] regarding whether temporary importers - a priori - could (or not) be paying a higher premium than what would actually correspond; that is, analyzing whether they are paying what would correspond to the true risk insured by the insurance companies.     

In this order of ideas, it is worth explaining the methodology that will be used: first, I will define the proposed topic; then I will explain the concepts that must be kept in mind for the purposes of the intended approach, and finally, I will deal with the influence that the following precedents could have on the insured risk: (1st) “Frisher SRL (TF 16.236 -A) c/ ANA” and “IEF Latinoamericana SA (TF 16.912-A) c/ DGA” (14.08.2013/2/22179), (23.08.2011nd) “Volkwagen Argentina SA (TF 22.343-A)” (2590/06/604155) and “Cladd ITA SA (TF 01-A) c/ EN – DGA resol. 26.11.2019/XNUMX (file XNUMX/XNUMX) s/ Dirección General de Aduanas” (XNUMX/XNUMX/XNUMX).

2. The premium in insurance

Without intending to dwell on more than those basic concepts and elements that are strictly necessary to carry out the proposed analysis, it should be noted that the first paragraph of art. 1574 of the Civil and Commercial Code has defined that there will be a "surety contract" when a person (in our case the insurer) is additionally obliged by another (the importer) to satisfy a benefit in the event of non-compliance.

In turn, art. 1577 of the aforementioned Civil and Commercial Code states that “any current or future obligation, including that of another guarantor” may be guaranteed (including any taxes levied on the importation of goods for consumption).

Thus, within this legal framework, the provisions of art. 453, paragraph c) of the Customs Code fit perfectly, allowing the importer to guarantee, through a surety bond, those tax obligations arising from the eventual definitive import of the merchandise documented - previously - under the temporary import regime (arts. 250 to 277 of the Customs Code).

It should be noted that Article 256 of the Customs Code provides that “1. The importation of merchandise under the temporary import regime is not subject to the imposition of taxes, with the exception of service fees (…)”.

As a result, it is generally accepted that when the temporary import of merchandise is documented and later said temporary import is transformed into a definitive import for consumption (usually this happens irregularly), the beneficiary (in our case the General Directorate of Customs) will have -two or more- "solidary" debtors (art. 827 of the Civil and Commercial Code) of the obligations previously settled (in the DIT).^[4]).

In fact, there will be an insurance policy (surety), previously issued by the insurance company in favor of the General Directorate of Customs, which will obviously contain a settlement of what should have been guaranteed in the event of definitive importation for consumption. Without a doubt, this guarantee is a species within the genus "insurance contract", which guarantees Customs the collection of taxes that must be determined (for example, import duties).^[5] or the additional right^[6]), as well as those that must be collected (internal taxes^[7]), due to definitive import for consumption^[8], in full compliance with arts. 274 and 638 inc. e) of the Customs Code. And of course, since it is a species within the “insurance” genus, as long as it is compatible and not specific, it will also be governed by the provisions of Law 17.418 (Insurance Law).

The surety bond (customs) used to obtain the release^[9] the temporary imports square^[10] It is provided for in art. 453 inc. c) of the Customs Code and covers the “any taxes levied on the importation for consumption of the merchandise in question” (i.e. all taxes, except service fees, in accordance with Article 256 of the Customs Code). 

Article 27 of Law 17.418, establishes in its relevant part: “The policyholder is the one obliged to pay the premium. (…)”.

Speaking about the insurance “premium”, Dr. Domingo López Saavedra indicates: “(…) the premium constitutes the mathematical equivalent of the risk assumed by the insurer (…)”^[11], while Dr. Waldo Sobrino does it in the following way: “1.1. In an introductory and generic way, it can be pointed out that the premium is the amount that the insured pays to transfer the risk to the insurance company, taking into account the probability of the occurrence of the loss, where the frequency and intensity are considered. Specifically: the premium is the price that the insured pays to the insurer. (…)”.^[12] 

That being said, it is a truism that in order to determine the value of the premium, the value of the insured risk must be taken into account, That is, it must be taken into account what exactly the insurance will pay (in this case, what taxes it will have to face) if the event that enables the pursuit of that payment occurs. (in the case of the customs surety bond, simply the final import for consumption).

Of course, the policies issued have a maximum limit that coincides with the settlement of the taxes guaranteed in the body of the office, circumstance that reveals what tax burden the insurance company has wanted to face (guaranteed concepts and in what proportion).

And of course, the amount of the secured taxes will impact the “premium” that the temporary importer must pay.

If that limit (or the liquidated concepts guaranteed in the body of the office)^[13]) are lower, will be liable for less and it goes without saying that it should be projected to the premium (the premium should be lower in that case).    

With this introduction, I will return to my initial doubt: the precedents indicated in point 1 (Introduction), Did they have the effect of wrongly reporting the insured risk? then, Were (or are) importers paying a higher premium than they technically should be paying?   

3. Some precedents of the Supreme Court of Justice and their possible influence on the risk assumed

In the introduction I mentioned three rulings of the SCJN: (1st) “Frisher SRL (TF 16.236 -A) c / ANA” and “IEF Latinoamericana SA (TF 16.912-A) c / DGA” (14.08.2013/2/22179), (23.08.2011nd) “Volkwagen Argentina SA (TF 22.343-A)” (2590/06/604155) and “Cladd ITA SA (TF 01-A) c / EN – DGA resol. 26.11.2019/XNUMX (file XNUMX/XNUMX) s / General Directorate of Customs (XNUMX/XNUMX/XNUMX).

In the first of them (Frisher and IEF Latinoamericana SA) the Supreme Court of Justice of the Nation revoked the judgment issued by Chamber I of the National Chamber of Appeals in Federal Administrative Matters, which had confirmed the decision of the National Tax Court (TFN).

He explained that art. 15 of Resolution 72/92 (ME)^[14] It expressly conditions the requirement to collect the additional fee on the registration of an application for destination for consumption and its authorization by the customs service, not being applicable to cases in which the definitive importation for consumption occurs in an "irregular" manner (that is, without the application for definitive importation for consumption before the expiration of the deadline for re-exportation).

Therefore, it is based on this doctrine that all temporary imports that become definitive imports for "irregular" consumption will not have to pay this additional duty (thus reducing the risk, since if the event that would lead to the insurer's obligation to pay occurs, this concept will not be satisfied).

The additional duty was previously 30% “ad valorem” (Resolution 72/92 ME), remaining at 2% monthly, not less than 12% (according to art. 23 of Decree 1439/96 and its counterpart art. 20 of Decree 1330/2004).

It does not escape me that the reform introduced by Decree 854/18 on Decree 1330/2004 would render the aforementioned doctrine inapplicable, since the new wording of art. 20 of Decree 1330/2004 currently “does not distinguish” between regular and irregular cases of imports for consumption.^[15], with respect to merchandise previously entered under the special regime.

However, in light of the above, and since there is no known ruling that took this recent modification into account, my (partial) conclusion is that - in principle - in contrast to the CSJN ruling in question, there could have been (and even currently exist) policies that contemplate a greater risk than what could truly be present in each specific case. 

This could mean that temporary importers are paying for policies that are more expensive than they should be, also breaking the rule of unjust enrichment to the benefit of insurance companies.    

The second of the rulings brought to light is the case “Volkwagen Argentina SA (TF 22179-A)”.

In this case, the Supreme Court of Justice adopts the Opinion of the Attorney General of the Nation of 5/07/2010, which addresses the application of article 20 of Law 23.905 to the case and the potential conflict that it could present with respect to article 7 of Law 23.928.

In summary, the High Court ruled that obligations corresponding to "other taxes levied on imports and exports" must be determined in US dollars, but that only VAT must be determined in dollars together with the relevant customs duties. 

It clarifies that the income tax is a way of anticipating the future -and eventual- tax that could arise in the taxpayer's head for all his income obtained and subject to said tax in the future; and that in the case of the collection of general resolution 3.431 (and its modifying regulations) it is the same, since it is related to an advance payment of the VAT that must be paid in due time by the importer of movable goods, but for merchandise that will later be sold in the domestic market.

Basically, it indicates that both perceptions should have been practiced in pesos from their origin (they are not covered by article 20 of law 23.905).

This situation, in many cases, limited the application of the CER.^[16] on the items of additional VAT and income tax.

Of course, in many cases it also significantly reduced the tax liability that insurers ultimately had to face. 

This situation raises the question again: Did importers pay (and currently pay) the premium, according to the real risk assumed?.

Finally, the ruling “Cladd ITA SA (TF 22.343-A) v. EN – DGA resol. 2590/06 (file 604155/01) s/ Directorate General of Customs”.

In this case, the Supreme Court highlights that from the moment the term for submitting the sworn declarations of the questioned taxes expired, the General Directorate of Customs had lost the power to demand the payment of the collections that should have been made for such concepts. On that basis, it concludes that, once the term for submitting the sworn declaration of the examined taxes has closed, the authority of the Agency (DGA) to demand the payment of those collections is extinguished.

The Supreme Court's decision was in line with the case "Volkswagen Argentina SA (TF 22.179-A) c/ DGA" (of 23.082011) and establishes that - through the presentation of a sworn statement, comprehensive of the entire respective fiscal period (annual in the Income Tax, monthly in the VAT) - the exigibility of said perceptions is extinguished, even if they have not been entered into the treasury up to that moment.

So things are: "(…) the AFIP may require, until the expiration of the general deadline or until the date of filing of the sworn declaration by the taxpayer, whichever is later, the payment of amounts on account of the tax that must be paid for the fiscal period for which the advances or collections are liquidated (…)"^[17].

In this way, I understand that the risk "assessed" before by the insurers (when it was contracted) is -technically- diminished by the failures, since the effects of each of the rulings directly affect what the insurers will eventually have to pay if the “legal event” occurs.^[18] which enables Customs to pursue the credit in question (which is the definitive import for consumption).

There is no need to analyze whether customs surety insurance should be considered compulsory insurance (or not), it is enough for me to point out that the last part of art. 724 of the CCyC places within the concept of obligation the notion of “forced compliance”; and by virtue of this, once the possibility of action has expired, said situation will generate the extinction of the obligation as such (precisely because the possibility of demanding forced compliance is diluted, according to art. 730 of the CCyC). In this order of ideas, it becomes a priority to determine what the insurers are obliged to pay if the final import for consumption occurs in order to determine the risk actually faced, in order to determine "the fair premium". 

4. CONCLUSIONS

Art. 34 of Law 17.418 under the title “Adjustment for decreased risk” establishes that “When the insured has wrongly reported a more serious risk, he has the right to a correction of the premium for the periods following the reporting of the error, according to the rate applicable at the time of the contract. When the risk has decreased, the insured has the right to a readjustment of the premium for subsequent periods, according to the rate applicable at the time of reporting the decrease.”.

In the first case (the policyholder has wrongly reported a more serious risk) the law provides that the policyholder will have the right to a reduction in the premium from the date on which the new risk status is rectified... but clarifies that "The modification of the premium must be made taking into account the current rate at the time of the conclusion of the contract".

In the second case (when the risk has decreased) the rule establishes that the premium must be reduced, taking into account the current rate. “at the time of reporting the reduction of risk”.

Thus, from what has been explained so far, it can be concluded that the insured has the right to "adjustment of his insurance premium" in both cases (either when a greater risk was reported or assessed or when the risk subsequently decreases) but depending on the case, the economic effect caused will be different.

If we consider that the risks have been “erroneously reported” by the surety insurance policyholder (importer), the modification of the premium must be carried out in accordance with the rate applicable at the time of signing the contract.

In this case, I consider that the aforementioned errors do indeed affect the initial risk (because the risk was wrongly considered), and therefore, the policy premium must be readjusted.

However, even if it were considered that the risk existed at the time of contracting, no one can doubt that the failures caused the (subsequent) reduction of the risk.

In either case, it could be said that the approach suggested in this work is consistent with the principle that promotes the devaluation of “unjust enrichment”, a principle (and theory “per se”) that, although it was not enshrined in an express rule of the Civil Code of Vélez^[19] It was given doctrinal consideration in several notes of the aforementioned Code (such as those belonging to arts. 43, 499 and 784 of the Civil Code)^[20]); and now it takes place expressly in the Civil and Commercial Code approved by law 26.994 -which has eliminated the methodology of the notes- but has expressly contemplated it in arts. 1794 and 1795, with evident projection to the law in general (commercial law, insurance law and even customs law).

Indeed, when speaking of unjust enrichment, it should be noted that “From the depths of history and human conscience comes a principle that dominates the whole of social life: no one should enrich himself at the expense of another. A moral precept that translates the first idea of ​​law: suum cuique tribuere: to give to each his own”^[21].

In this sense, I consider it important to mention that legal principles are "optimization standards", guidelines, standards that are not necessarily norms in the strict sense, but that together with them (the norms) fulfill an essential function in the elucidation of rights and duties, granting unity (of meaning, teleologically speaking) to the complex and dispersed normative world.^[22].

As Navarro Fallas explains it “Principles allow positive law to be adapted to reality. Indeed, because they are not subject to forms (e.g. linguistic), because they do not respond to concrete facts, because they respond to the institutions and convictions of a society, principles, unlike norms, transcend time and social phenomena.”^[23] And I believe that it is not in accordance with the correct understanding of the law that the system supports the collection of an insurance premium greater than the true insured risk..  

Essentially, the lack of coverage of a risk can be asserted to also materialize in the hypothesis of an erroneously assessed risk (excessively) and for which a premium is being paid that -literally- contemplates a risk not assumed (in effect, non-existent risk). 

If the policyholder pays to insure a risk that does not exist, then it could be argued that there is unjust enrichment.

Beyond what may be provided in the so-called premium collection clauses drawn up by the National Insurance Superintendence and even in the Insurance Law, I believe that the violation of the rights of the policyholder (often even considered a consumer) becomes inapplicable and illegal.

Indeed, taking into account the provisions of art. 1094 of the Civil and Commercial Code, which establishes the normative priority of all legislation that favors the consumer (in accordance with art. 42 of the National Constitution), art. 1794 of the Civil and Commercial Code must be applied when we are faced with the case of “unjust enrichment.”

It should be noted that it is quite obvious that there is no legitimate reason for the insurance company to claim to keep something that it charged the policyholder (e.g. percentage of the premium) without there being a reason to justify it (i.e. when the insured risk that motivated this payment has never existed). With reference to the subject, the duty of information and, in particular, the duty of advice of the insurance producer (art. 10 of law 22.400) and the insurance company (art. 1100 of the CCyC) must be taken into account.[24].

Yes, the insurer charged the “full” premium (containing all the DIT items in the usual terms)[25]) and then the insurance company -dissects- the tax burden that it intends to face (later, in the summary and in the trial), its actions simply reveal that it did not correctly report -at the time of the initial contract- the risk that it itself estimated later (why did it not report the claims that it would later make in court in order to collect the correct amount from the beginning?).

Undoubtedly some professional specialist in insurance law will object that the risk assumed is a future risk that depends on public order regulations, the national economy, etc., but this is no obstacle to estimating it reasonably. 

As a consequence, judges must consider that doing justice does not mean anything other than the correct determination of what is fair in concrete terms, for which it is necessary to ensure the effective realization of the law in the real situations that arise, which requires combining the principles stated in the law with the factual elements of the case (conf. CSJN, Ruling: 302:1611).

At this point, the argument is compatible with a previous opinion of the undersigned in which I held that insurance companies have the obligation to inform how they will respond in the event of the event that entails the obligation to respond (the final import for consumption) in a concrete and clear manner; The information they provided at the time of marketing the insurance became relevant..

This is not only due to the principle of good faith in the contract (the specialist in the matter, that is, the insurance contract provider, has to specify what he will be responsible for, discriminating what he will not ultimately be responsible for) but also due to the strict application of certain consumer regulations (public order regulations) that I consider absolutely applicable.^[26].   

However, the approach I am making now is very different from the one I made before, because now I am questioning the premium paid (if it is correct) and I am raising the possibility of a claim by the importer against the insurer that has charged for a risk that, technically, it would never have assumed, because it never existed (or at least has already decreased).  

The approach is completely different and it should be noted that this short thesis does not provide a definitive solution to the problem presented (it only formulates some logical propositions), but invites us to reflect on the facilitation of international trade and its important relationship with insurance law.

I would add that, after a necessary debate on this issue, it would be desirable for the policies to cover in pesos what must be settled (taxes) in pesos and must actually be paid in the event of a loss and, of course, to cover in dollars what must be settled in dollars, always in accordance with current regulations.

Put another way, I think that The policies issued (and already being issued) should be tailored to the risk actually assumed, neither more nor less, in order to avoid overloading the temporary importer with unnecessary costs. and so as not to frustrate the expectations of the State in relation to the taxes to be paid in each case.

Predictability in legal relationships is always linked to the legal security of society and also to legal transactions, such as insurance.        

Therefore, the experience gained (rulings of the Supreme Court of Justice of the Nation applied peacefully) must be taken into account when calculating the premium to be paid and, of course, it should also be taken into account to rectify (when appropriate) the policies whose risk (1) is incorrectly assessed or (2) which may be considered to have decreased over time. 

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^[1] The definitive import for consumption is provided for in art. 233 of the Customs Code, being defined as "that by virtue of which imported merchandise may remain for an indefinite period within the customs territory". I would like to expressly point out the difference with the “suspensive destination of temporary import” (or temporary import), which is that which allows the imported merchandise to remain for a purpose and for a determined period within the customs territory, being subject, from the moment of its release, to the obligation to re-export it for consumption before the expiry of the aforementioned period (art. 250 of the CA). In this last case, the taxes are guaranteed, but not paid, since the merchandise is not intended to remain permanently in the customs territory.    

[2] The issue is important since the number of cases brought for violations of Article 970 of the CA is increasing, a situation that can be seen when analyzing the situation of the Secretariats of Action Nos. 1 and 4 of the Department of Customs Legal Procedures (General Directorate of Customs).   

[3] It should be noted that the opinion contained in this work is the personal opinion of the subscriber, and does not in any way represent the opinion of any entity or organization with which it may have a relationship.

^[4] DIT is the abbreviation for “Temporary Import Clearance.”

^[5] Art. 635 of the CA.

^[6] Art. 20 of Decree 1330/2004.

^[7] Cfr. laws 20.628 and 23.349; and general resolutions DGI 3431/91, and 3453/92.

^[8] Our system resorts to the so-called “choke point”, about which it has been said: "It can be argued that collection at source constitutes a simplification in the management of taxes, facilitating greater efficiency in the collection system and bringing about, as an indirect effect, greater security as to whether the collection will be successful" (Horacio Díaz Siero; Rodolfo Veljanovich and Leonardo Bergroth “Tax Procedure” Edic. Macchi. Page 242, citing Alonso González Luis “substitutes and retainers in the Spanish tax system”) and for this reason the common field of taxation that customs duties share with internal taxation cannot be ignored; thus the doctrine states that “All of the above prevents the creation of watertight territories between internal and customs taxation, given that global evolution has unified the analysis and judgment of the same under the same pattern” (Vicente Oscar Diáz “The legal exegesis of customs taxation and its economic impact” Errepar Tax Doctrine. September 2004, XNUMX).

^[9] Art. 231 of the CA establishes: “Clearance, for the purposes of import, is the act by which the customs service authorizes the withdrawal of the merchandise subject to clearance”.

^[10] Art. 255 of the CA establishes that “In the event that temporary importation is authorized, a guarantee must be provided in favor of the customs service, in accordance with the provisions of Section V, Title III, in order to ensure faithful compliance with the obligations imposed by the regime.” In turn, art. 22 of Decree 1330/2004 establishes: “Temporary imports carried out under this decree are subject to the guarantee regime provided for in Article 453 and following of the Customs Code.”.

^[11] López Saavedra, Domingo, “Insurance Law commented and annotated”, Edit. “La Ley”, (2007), p. 164.

^[12] Sobrino, Waldo Augusto R. “Commented Insurance Law”, Edit. “La Ley” (2021), V1, p. 383/384

^[13] Although policies are currently electronic, this information (policy limit) is still available, making it relevant to point out that what I will explain has not changed with the advances in information technology. In the past, policies were issued by written instrument and this written instrument contained a limit that usually coincided with the amount settled in the temporary import clearance (DIT). This DIT contained an individual settlement of each tax item and next to it the letter “G” (guaranteed) was recorded. Everything that had “G” added together, gave the maximum guaranteed limit. 

^[14] Precedent of Decree 1439/96, currently repealed by its similar Decree 1330/2004.

^[15] For greater precision, see the undersigned’s publication “A reform with values: Decree 854/18 would render the SC doctrine inapplicable –in re– “Frisher SRL (TF 16.236-A) v. ANA” and “IEF Latinoamericana SA (TF 16.912-A) v. DGA” of “El Derecho”, Diario de Doctrina y Jurisprudencia of February 19, 2019 (ISSN 1666-8987 • Nº 14.574 • YEAR LVII • ED 281).

^[16]Reference stabilization coefficient introduced by Decree No. 214/2002.

^[17] Juan Pablo Rizzi “Import VAT, the collection of Additional VAT and the Advance Payment of Profits”, for the magazine “Jurisprudencia Argentina” (Edit. Abeledo Perrot), dated 04/03/2020 (ISSN: 2545-6261 RNPI 5074812 -2020 – I, fasc. 10). 

^[18] The legal fact to which I refer is in accordance with art. 257 of the CCyC, since it is the event that, according to the legal system, produces the birth, modification or extinction of legal relationships or situations. In this case, it is the “definitive import for consumption” (regular or irregular). 

^[19] The Civil Code approved by Law 340 (now repealed) provides in its art. 499 that there is no obligation without cause, that is, without it being derived from one of the facts, or from one of the lawful or unlawful acts, from family relations, or from civil relations. The principle in question could be considered within this provision, but it does not make express reference to it.

^[20] Marcelo J. Lopez Mesa, “The action for unjust enrichment. Requirements and characteristics”, in The Law, volume 2009-E, p. 803.

^[21] Philippe Malaurie Laurent Aynés and Philippe Stoffel Munck “Obligations”, 4th ed., Edit. Defrénois, Paris, 2009, p. 577

^[22]Rodolfo Luis Vigo, Contemporary Philosophical Perspectives: Ross-Hart-Bobbio-Dworkin-Villey, Abeledo Perrot, Buenos Aires, 1991, p. 129.

^[23] See Navarro Fallas, Román A. “Legal Principles. Structure, Characteristics and Application in Costa Rican Law” in https://www.ucipfg.com/Repositorio/MCSH/MCSH-03/BLOQUE-ACADEMICO/Unidad-2/lecturas. pp. 1-2.

[24] I anticipate the criticism that the insurance does not determine which concepts must be covered, since the broker is the customs technician (specialist). However, the provider and specialist “in all types of insurance” is the insurance company par excellence and if it notices that it charges a premium higher than what is due, it is to be expected that it will alert you so that you are paid what is fair, what is due.  

[25] The concept of habitual use in this case is linked to the currency used, according to the rulings of the SCJN explained in the work. 

^[26] See Pablo Sebastián Borgna, “Customs surety insurance for merchandise subject to the temporary import regime and taxes guaranteed against the potential influence of user and consumer protection regulations” published in elDial.com (DC2695, 07/12/2018), which was republished in Magazine No. 23, First Semester of 2016 – Second Semester of 2017, of the Argentine Institute of Customs Studies and in the “Practical Guide to Foreign Trade and Advances of the Customs Tariff Nomenclature” Number 448 of February 25, 2022, p. 3, among others.