Court rejects bacon importer’s 159 million krona refund claim

Landsréttur, an Icelandic court, has upheld the dismissal of a claim by Ekran ehf. for a refund of nearly 159 million krona in import duties on bacon, mbl.is reported. The court also rejected the company’s alternative demand for damages in the same amount.

The case concerned bacon Ekran imported between 2018 and 2023. The company classified it under tariff heading 0210 and bought a tariff quota on that basis. In early 2023, Iceland’s tax authority said the bacon should instead be classified under heading 1602 as a cooked product. Ekran paid 158,711,894 krona to the authority on June 15, 2023, and later sought repayment.

Ekran argued that the tariff schedule did not state that boiling bacon changed its classification. It also said the tax authority could not rely on foreign guidance when the Icelandic schedule was clear. The company said the reclassification prevented it from using a quota it had bought in reliance on the wording of the schedule and a classification that had gone unchallenged for six years, leaving its imports subject to full duties rather than lower quota rates.

Reykjavik District Court ruled last year that there was some uncertainty in the tariff schedule over how to classify pork that was both smoked and boiled. It found the tax authority could consult explanatory material from the World Customs Organization, which states that cooked meat, including boiled meat, falls under heading 1602. The district court concluded the authority’s classification was lawful, and Landsréttur upheld its ruling.

On the damages claim, Landsréttur said importers and exporters, or their agents, are responsible for correctly classifying goods under customs law. If the classification is uncertain, they can ask customs authorities for a binding opinion.

Ekran was ordered to pay the state 600,000 krona in legal costs for the appeal. The district court’s award of one million krona in costs was also upheld.