Julio Guadalupe in Gestion: Exchange Zone

Our partner Julio Guadalupe, head of the International Trade and Customs area, published an article in Gestión newspaper in which he reflects on the General Customs Law. Through an analysis of the current customs paradigm, he considers whether a comprehensive reform or specific adjustments to the existing framework are appropriate, highlighting the autonomy of Customs Law in relation to Tax Law.

Metaphorically, the phrase “to put something on the table” refers to bringing an important matter forward for discussion.

The bill recently introduced in Congress does exactly that — it brings to the table key aspects of the General Customs Law that, naturally, invite reflection on its scope, purpose, and the specific issues addressed in this legislation.

Paradigm: “A set of interrelated assumptions about the social world that provides a philosophical framework for the organized study of that world.”

“The Structure of Scientific Revolutions,” Thomas Kuhn (1962).

The considerations regarding customs control (after 9/11), with particular emphasis on the security of global supply chains on one hand, and on trade facilitation — with special attention to the proper flow of legitimate trade — on the other, as the unquestionable role of modern Customs, reveal the face of the current paradigm in customs matters. This paradigm is none other than that of finding a sound and necessary balance between both concepts within an overwhelming context characterized by the use of artificial intelligence tools applied to each and every link of logistics, procedural, and relational processes among foreign trade actors, both public and private.

Based on this clear and undeniable current juncture, we may ask whether the scope of the General Customs Law (GCL) currently in force is aligned with this paradigm and its multiple ramifications, and whether, on that basis, a new GCL (this time approved by Congress) would be required, or merely amendments to the text currently in force (approved by Legislative Decree).

In general terms, history is important because it helps us understand our present and build a better future by analyzing the past, avoiding mistakes, and understanding social and cultural processes.

Historically, the General Customs Laws (GCL) in Peru have been enacted through Legislative Decrees issued by the Executive Branch under delegated powers from Congress. This situation leads us to question whether such a process has contributed — or not — to establishing a solid foundation that ensures an appropriate balance between customs control and trade facilitation, or whether, on the contrary, it may have contributed, intentionally or unintentionally, to tilting the balance toward control over facilitation.

This is the first point that must be defined. If we believe that this balance is already ensured under the current GCL (approved by Legislative Decree), perhaps only certain amendments to the text are required, respecting its existing structure. However, if we believe that the balance is not ensured, we should consider the possibility of adopting a new GCL that, from its inception, seeks to guarantee such balance through structural changes deemed necessary by Congress.

The bill currently under discussion in Congress invites this necessary debate.

“There is autonomy of a branch of law when it groups together a series of principles and legal figures that are its own and different from other branches of law, and that serve to explain and regulate a well-defined reality or social facts.”

Mexican Customs Law. Andrés Rohde (2002)

At present, doctrine is unanimous in affirming that Customs Law constitutes a branch of law that possesses scientific, didactic, and legislative autonomy, allowing solutions to be found for a concrete and specific reality. This issue is entirely peaceful, without, in my opinion, any doubt or questioning in this regard.

Being that so, another valid question that arises is whether the current text of the General Customs Law (GCL) regulates the customs matter with the required and necessary autonomy. This question is vital, since the proper understanding and materialization of such autonomy would make it possible to ensure that the concepts, principles, and institutions of Customs Law are adequately reflected in the GCL and that, likewise, the regulatory and procedural rules are aligned with it.

And what about taxation?

“Chained rhetorical questions” constitute a literary device through which several questions are asked without expecting a direct answer, but only to provoke reflection.

Here we go.

Up to this point, have we mentioned anything about taxation?

Of course not, for the simple reason that taxation, in customs matters, will never be the most important thing. And… the (relative) importance of taxation, in this field, must find its fair and necessary measure.

In this regard, it must be borne in mind that, in tax matters, a regulation is required to govern the relationship between the Tax Authority and the taxpayers (Tax Code), while in customs matters a regulation is required to govern the relationship between the Customs Authority and the operators (GCL).

Now, if —as happens in Peru— the same entity (SUNAT) is in charge of controlling both taxpayers and operators, it is not difficult to notice the complexities that could arise not only from the very difficult, surely, parallel management of these two roles, but also from the, we would understand, very difficult task that could entail having to raise a kind of “Chinese wall” between officials of the same entity.

Customs is customs

A statement used in reference to the phrase “La ‘U’ es la ‘U’” (“the U is the U”) popularized by José Luis “Puma” Carranza, historic idol of Universitario de Deportes.

Thus, if customs is “customs” and not “taxation,” we should speak of customs obligations, infractions, and sanctions, without distinguishing whether these are tax-related or not. This would lead us to conclude that, in customs matters, the procedural and sanctioning principles established in the regulation that governs, in general terms, the administrative field (General Administrative Procedure Law) would apply — a situation that should be reflected in a well-structured preliminary title, which the current text of the GCL lacks.

So, a new GCL or just specific amendments to the one currently in force?

Through rhetorical questioning, an idea is emphasized, emotions are expressed, or suspense is created without expecting a direct answer.

We’ll leave it there.

Read the full interview here