24 August, 2022
In this article, we will review the Ramla Magistrate Court’s ruling, which ordered the return of luxury watches that were seized and forfeited by the Customs Authority, in light of the flaws in the conduct of the relevant customs authorities.
A luxury watch import and export company sent a representative to Rome carrying three Rolex watches, in order to meet a purchase order by one of its clients. The next day, the representative returned to Israel with the watches still in his possession, without transferring them to the client, under the directive of the company’s manager. The representative passed through the green track without declaring the three watches in his possession, and was caught. The Customs Authority issued a forfeiture declaration for the watches under sections 204(1) and 204(9) of the Customs Ordinance, on the pretext that they are smuggled goods for which a false declaration was given. The forfeiture committee later decided to impose an administrative sanction upon the representative and forfeit the watches. The company submitted a request for the return of forfeited goods under section 192 of the Customs Ordinance.
The Parties’ Arguments
The representative argued that he did not know of the requirement to declare the watches by passing through the red track, as he was not properly briefed, adding that he was informed of the requirement only past factum. In addition, he claimed not to know the value of the watches, and therefore did not know that he was required to take the red track.
The company’s manager claimed that he attempted to contact the representative in order to brief him, but managed to talk to him only after he was caught in the green track. Either way, the goods are not smuggled goods.
In addition, the company argued that the forfeiture proceeding is disproportionate under the circumstances, since this is not a case of smuggling goods, as the company intended to report the watches. In addition, at the relevant period the company was in the midst of replacing its computer systems, a fact which impeded its activity.
The Court’s Ruling
The court ruled that in order to establish forfeiture power, the false act must be performed intentionally, a fact that must be deduced through a detailed hearing to the parties involved. Such a process was not undertaken in this case, and therefore the forfeiture declaration lacks a factual foundation and thus is highly unreasonable.
As for the forfeiture committee’s decision, the court ruled that the committee ignored the company’s good faith arguments, as well as its arguments regarding the representative being a new employee and the replacement of the computer systems. In addition, the court ruled that committee ignored the argument that the goods are not smuggled. Therefore, the court ruled that the committee as well did not meet statutory procedural requirements under Section 191 of the Customs Ordinance.
The court ruled that the committee’s decisions were given based on a false perception, inaccurate examination or alternately a misunderstanding of the case facts and circumstances.
In conclusion, the court ruled that the Customs Authority must return the watches to the company, in addition to legal costs.
[TA 46864-03-18, Wolf Mayer Investment & Trade Ltd. V. The State of Israel; before judge Zecharia Yeminy, ruling given on 31.8.20]
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Written by: Adv. Gill Nadel, Adv. Dave Zeitoun, Ari Stavsky
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