Customs: Classification and valuation not always smooth sailing

In previous blogs, we discussed the differences and similarities between VAT and customs. At Less Grey, we specialize primarily in VAT, but we also see customs questions come up regularly.

Whereas VAT cases are often already interesting fare to read, some customs cases allow you to completely enjoy the topics that come before you. We use this term for a reason when discussing a recent customs case.

In this recent case (1), the Amsterdam Court of Appeal considered on appeal the importation of lubricants for sexual use. The Court had to rule on classification and customs value, the importation process was apparently not smooth.

This article was written in collaboration with Eibert de Vries, customs specialist.


The question of classification exposes a limitation of the Harmonized System (HS). The system was created to facilitate international trade without libertarian ulterior motives. The system makes no mention of articles for sexual pleasure and so interpretation is required. The importer declares the lubricants under heading 3304, a 0% heading for, among other things, skin care products. Customs has a different angle and pushes through to heading 3307 for, among other things, cosmetic products not elsewhere specified nor included with a 6.5% tariff. After this push-back, the importer slides back to heading 3006, another 0% heading, where, among other things, lubricants for use during surgical operations are classified.

The importer argues that the lubricants are officially approved as medical devices and therefore have the same "objective characteristics" as the lubricants listed in the heading. The parties then bite their heads off over the interpretation of the word "only" in the note explaining the contents of heading 3006. According to Customs, "only" means that heading 3006 includes "only" products specifically mentioned in the heading. This goes against the crotch of the importer who feels that "only" indicates that heading 3006 should be interpreted restrictively and that it includes imported products as well.

The court grabbed the Van Dale dictionary, saw that "only" in this unprecedented source is interpreted as "exclusively," and vindicated Customs. The Court of Appeals accepted the customs and court's classification but with different reasoning. The Court states that the lubricants for sexual use are not designed to be used as medical devices, which is a requirement for classification under heading 3306. The only option left is classification under residual heading 3307.

Customs value

The customs value question reads like a compromise by the Court. When importing, the importer used invoices that in fact represented an inventory movement. Customs obviously disagreed because the "buyer" and the "seller" are the same party.

Then the importer came up with a contract with the producer. Customs rejected these transactions based on this contract because the parties had the same shareholder and the price was insufficiently substantiated. Customs then used the intra-EU sales price without allowing deductions for costs and profits that had occurred after importation. Customs rejected the calculation submitted by the importer for this purpose.

The court followed Customs, but the Court sees the case differently. According to the Court, the deduction method cannot be used because the elements to be deducted are missing. Next, the Court turns to the computed value method, the latest method of determining customs value. The computed value method is less rigid than the previous methods and this gives the Court room to accept the importer's calculation and set the customs value lower than the customs and court vat.


What this case demonstrates are the steps that must be followed in basically every import transaction: classification, tariff, and valuation. This logic is the basis of the customs system. If this case had involved teacups or key rings, the Court would have followed the same logic.

On the other hand, this case also shows very well that different interpretations are possible by customs, the importer and the courts. That is what makes it fun and exciting. And then of course it is nice that there is always someone who can help.

Want to know more?

VAT is fun. In some ways, customs is even more fun. But both can lead to many questions for entrepreneurs importing goods from non-EU countries.

We can help you with all your VAT and customs questions. Please feel free to contact us, for example by booking an appointment directly through our website.

At Less Grey, we have the knowledge and experience to help you with VAT Advice, Compliance and Refunds. And if you are interested in IOSS, it is good to know that Less Grey is one of the largest VAT intermediaries in the Netherlands.

  1. Amsterdam Court of Appeal 07.11.2023, case no. 22/2400 link

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