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Customs to refund €11m after exchange rate blunder

Customers who are owed money will have to apply separately for any interest owed and payment of sums under 10 euros.

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Image: Marja Väänänen / Yle

Finnish Customs said on Wednesday that it would begin refunding 11.5 million euros in overpayments on import taxes, after it discovered that it had been using the wrong exchange rate to calculate duties owed by customers.

Customs said in a press release on Wednesday that the inaccurate list of exchange rates had been in use between 1 May 2016 and 30 June of this year. It added that a total of 960,000 transactions had been affected by the incorrect rates. Customs said however that the individual sums were not very high.

"The lion’s share is very very small and the largest sums are just a few thousand euros," Customs clearance director Jarmo Räikkä commented.

Customer detected error

During the period in question, customs officials used exchange rates provided by a Finnish commercial bank. However in the case of certain currencies, it should have been using rates set by the European Central Bank (ECB).

"A misunderstanding occurred. In May 2016, an article of EU customs legislation entered into force, according to which we would begin using rates set by the ECB. The people who were responsible for updating those rates took them from the website of a Finnish commercial bank. As a result of a misunderstanding they thought that it provided a list of exchange rates set by the ECB. And that error just continued," Räikkä explained.

The mistake was detected by a customer who noticed that Customs was not using ECB exchange rates. "The customer asked why we were not using rates on the official ECB site. It was an isolated incident that later proved that the list of exchange rates that was being used was not an ECB rate list."

Altogether, customs officials had been using incorrect exchange rates for 25 currencies including the Russian ruble, the Swedish crown, China’s Renminbi and the US dollar in their calculations. The mistake meant that import duties fixed on the basis of customs duties and value added tax were between 1.5 and 2.5 percent too high.

Refunds to begin as soon as possible

Customs said that it plans to begin refunding the overpayments as soon as possible, but noted that in some cases returns won’t be paid until next year.

"The selections will be made by a computer, but in any case this will involve a huge amount of manual work. We estimate that even if we begin the payments next week, it will take long into next year before we get it all done," Räikkä continued.

Customs said that it will not refund sums below 10 euros unless customers request a repayment. By the same token, customers will have to make a separate request if they want to be paid interest on the excess payments.

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