C-54/80

on the interpretation of Regulation N o 803/68 of the Council of 27 June 1968 on the valuation of goods for customs purposes (Official Journal, English Special Edition 1968 (I), p . 170),

T H E C O U R T (Second Chamber)

composed of: P. Pescatore, President of Chamber, A. Touffait and O. Due, Judges,

Advocate General: F. Capotorti Registrar: J. A. Pompe, Deputy Registrar

gives the following

JUDGMENT

Etienne Marcel, Paris 2ème, which has means of transfers to the United as its Chairman and Managing Director States under cover of mark-ups in Mr Samuel Wilner and as its objects, in value. particular, the importation of second- hand fabrics, clothing and household linen, imported from the United States The accused in the main proceedings of America goods having a total declared challenged this interpretation and value of US$ 1 520 093.39. contended, first, on the basis of a statement provided by the forwarding agent, that the goods dispatched, being second-class or substandard, had been The French customs authorities maintain declared as rags, which allowed a more that on importation Victory France SA favourable freight rate to be obtained; marked up the value by the sum of FF secondly, that, as the New York 3 965 540. For that reason, they rejected Chamber of Commerce and Industry had the invoices from the American exporter confirmed, the declaration made in the (Victory Jobbing House, the Director of United States was required only to which is Mr Henry Wilner, a brother of permit statistics to be kept and not for Samuel Wilner), even though the amount levying duties or charges; thirdly, that of the invoices was actually paid by the the invoice prices, although higher than French importer and received by the said the value indicated by the forwarding exporter, regard being had to the fact agent on export from the United States, that the invoices were made out in were clearly lower than the average France by the importer, Victory France values declared for similar goods by all SA. In order to determine the "normal French importers and that this precluded price", the customs authorities refer any accusation of marking up the value. exclusively to the export declaration made by the American forwarding agent, Dorf International Limited, when the goods left the United States even though The customs authorities and Mr Wilner that declaration was not accompanied by were at one in submitting that an inter- any document emanating from Victory pretation of Regulation No 803/68 Jobbing House. They adopt only the should be sought from the Court of value indicated by the forwarding agent, Justice and the Juge d'Instruction emphasizing that he had approved the therefore submitted the following printed words stating all the information question: contained in the declaration to be "true and correct". Consequently, the customs authorities charge the accused in the "Under Regulation (EEC) No 803/68 of main proceedings with a twofold 27 June 1968 on the valuation of goods offence : for customs purposes, may the normal price of goods originating in and coming from the United States of America, which must be taken as the value to be — In terms of customs law: uttering declared on importation into France, be false declarations of value, per- equal to the value of those same goods petrated with the assistance of forged declared by the forwarding agent of the documents, and the marking-up of seller to the customs authorities of the value on importation; country of origin, even if that value, which is much lower than the price paid . — In terms of exchange-control law: the by the French buyer and received by the making of irregular payments by American seller, is not based upon any

The order making the reference was received at the Court Registry on 12 "Does Regulation No 803/68 permit the February 1980. In accordance with competent authorities of a Member State Article 20 of the Protocol on the Statute to set aside the value declared on the of the Court of Justice of the EEC, basis of the invoiced price (the price paid written observations were lodged on or payable within the meaning of Article 21 April 1980 by the Commission, 9) and to take a value for customs represented for these purposes by Mr purposes which is much lower than the Beschel, acting as Agent, assisted by price invoiced and paid by the French F. Herbert, of the Brussels Bar. buyer and received by the American seller where the value taken is based on a declaration made by the seller's Upon hearing the report of the Judge- forwarding agent to the customs auth- Rapporteur and the views of the orities of the country of origin but not Advocate General the Court decided to on any accounting document (such as an open the oral procedure without any invoice accompanying the goods) and preparatory inquiry. where, moreover, the declared value is less than the normal price of the same goods agreed between a buyer and a By order of 4 June 1980 the Court, seller under conditions of free pursuant to Article 95 (1) of the Rules of competition (such as appears from the Procedure, decided to assign the case to average values declared by all French the Second Chamber. importers for similar goods) ?"

In regard to the offence of fraudulently exporting capital, the Commission II — O b s e r v a t i o n s l o d g e d p u r - considers that a national legislature may s u a n t t o A r t i c l e 20 of t h e have resort, in the context of legislation P r o t o c o l o n t h e S t a t u t e of other than customs legislation, to the t h e C o u r t of J u s t i c e concept of value for customs purposes, but such a reference cannot affect the Community provisions governing the uniform interpretation and application of Observations of the Commission the Common Customs Tariff.

In regard to the question whether an administrative authority may, with a view to setting aside the declared value, But, since Article 2 (1) of Regulation No proceed upon an export declaration 803/68 stipulates that for a sale to be where the purpose of the declaration is assimilated to a sale transacted in purely statistical and the value shown in conditions of free competition it is not confirmed by any accounting presupposes that "the price is not document, the Commission recalls that influenced by any commercial, financial although the Court has stated that, in or other relationship", the Court of principle, it is the price paid or payable Justice states in the aforementioned which is the best guide to the normal Caterpillar judgment that such an price forming the basis of the value for influence "may also arise from a customs purposes (see judgment of 10 comparison made with the price of December 1970 in Case 27/70 Edding identical or similar goods paid by any [1970] ECR 1045), it has also confirmed buyer operating in the territory of im- that the possibility allowed by Article 9 portation" and thus referred to the of Regulation No 803/68 of accepting comparative method. The Court also the price paid or payable as the value for held in the same judgment that it is in customs purposes in no way precludes accordance with Regulation No 803/68 recourse to other methods of calculating to calculate the value for customs the normal price (see Case 111/79, purposes on the basis of the price at Caterpillar [1980] ECR 773) and it which the goods are resold in an referred to two methods: the deductive unaltered state after deduction of all the method and the comparative method. costs incurred by the buyer-reseller and, where necessary, an appropriate profit margin, thus referring to the deductive method.

Turning thereafter to the facts, the accused submits first that the fact that " T o the extent to which both the method the Chairman and Managing Director of based on the price paid, account being the French company is the brother of a taken of the adjustments provided for in member of the board of the American Article 9 (2) of Regulation No 803/68, company "cannot have any effect on the and that based on comparison with the value to be declared"; secondly, that the price of identical or similar goods export declarations subscribed by the indicate that there has been no mark-up American forwarding agent on dispatch in value as compared with the price of the goods "without the production of under conditions of free competition, any sales invoice and without any special recourse, with a view to setting aside the instruction from the consignor cannot invoiced price, to declarations emanating have any effect either on the value to be neither from the seller nor from the declared"; thirdly, that the fact that the buyer, which were made outside the seller placed trust in the purchaser and Community customs territory for stat- permitted him to make out the invoices istical purposes, which are not supported bearing the seller's bill-head by entering by any accounting document and which the price after a prior telephonic appear to have had the purpose of agreement "does not amount either to a obtaining favourable freight rates cannot factor capable of casting the slightest constitute a proper application of the doubt on the genuineness of the price"; principles of assessment of value for and fourthly, that by proving that the customs purposes contained in the values declared were the subject of actual provisions of Community law." transfers of funds to the credit of the seller and that Victory France purchased those goods at a price lower than that of other French importers he has destroyed the customs authorities' arguments. Ill — Oral procedure

Finally, fearing that the Court may with which it is faced" the Commission declare that "there are no grounds for suggests that the Court should consider proceeding to judgment" the accused in only the question of principle and adopt the main proceedings expresses the desire the line or argument put forward in the that, as in the Donckerwolcke case the Châtain judgment. Court "should go further" and rule "that these facts cannot be accepted". As regards the fears of the accused in the main proceedings, the Commission is of The Commission, recalling that the the view, first, that the Court ought to judgment in the Châtain case was give an answer to the Juge d'Instruction delivered after the lodging of its written at the Tribunal de Grande Instance, observations, asks the Court no longer to Paris, but that, on the other hand, it have regard to the answer which the ought to confine itself to an answer Commission has suggested and proposes related to Regulation No 803/68 without that the Court give a reply "along the considering "the position under same lines as the operative part of the legislation intervening in the fiscal or Châtain judgment". financial field". According to the Commission, the question has in fact two aspects. The Finally, the Commission draws the first, which is not expressly raised, is Court's attention to one point of fact: concerned with a question of principle, according to the accused in the main namely: may the value for customs proceedings, the value declared is less purposes be reduced? The second, which than the average price and logically it emerges expressly from the question would therefore be necessary to increase submitted, relates to the method of that value instead of reducing it but the establishing the value for customs Commission questions whether identical purposes, that is to say the normal price, or similar goods are truly involved, in and is consequently more concerned with which event the price difference would the Caterpillar judgment. be explicable. Since the purpose of Article 177 is "to The Advocate General delivered his provide the court making the reference opinion at the sitting on 16 October with a practicable answer to the issue 1980.

2 This question has been raised in the context of a criminal investigation against the Chairman and Managing Director of Victory France SA, who is accused of having declared to the customs, at a value in excess of the normal price, goods bought from Victory Jobbing House, a company incorporated in the United States of America, the director of which is the brother of the Chairman and Managing Director of Victory France. The purchases in dispute are spread over the period between 10 March 1972 and 7 March 1974 and amount to a sum of US$ 1 520 093.39. On the basis exclusively of the export declaration made by the American forwarding agent when the goods left the United States, even though that declaration was not accompanied by any document emanating from the American company, the French customs authorities maintain that, on importation of the goods in question, Victory France SA marked up the value by FF 3 965 540 for the purpose of enabling it irregularly to transfer capital to the United States.

PROCUREUR DE LA RÉPUBLIQUE v WILNER

than the normal price for the same goods agreed between a buyer and a seller under conditions of free competition?"

4 In the context of the judicial cooperation provided for by Article 177, whereby national courts and the Court of Justice are called upon, each within the scope of its own jurisdiction, to contribute directly and reciprocally to the reaching of a decision aimed at ensuring the uniform application of Community law in all the Member States, the Court may extract from the wording of the question submitted and the facts set forth by the national court the matters of Community law necessary for the national court to be able to decide in accordance with Community law the legal problem with which it is faced.

5 In the present case, although the question from the Examining Magistrate is confined to an issue concerning the assessment on importation of the value of goods for customs purposes on the basis of a declaration of value made by the seller's forwarding agent to the customs authorities of the country of origin, the grounds stated in the order making the reference make it possible to recognize the question as one which is truly concerned with whether, in the context of Regulation No 803/68, the customs authorities of a Member State may reduce the value of the goods for customs purposes with a view to purposes other than those of customs control properly so termed.

6 In its judgment of 24 April 1980 in Case 65/79 Procureur de k République v René Châtain [1980] ECR 1345, the Court had occasion to indicate in detail the matters of Community law which apply to this topic.

io The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Second Chamber),

in answer to the question submitted to it by the Examining Magistrate at the Tribunal de Grande Instance, Paris, hereby rules:

1. The reduction by the competent authorities of a Member State of the invoice price of goods imported from a non-member country does not accord with the aims of the rules relating to the determination of the value of goods for customs purposes. However, the determination of the value for customs purposes in accordance with those regulations cannot have the effect of requiring the fiscal and financial authorities

PROCUREUR DE LA RÉPUBLIQUE v WILNER

Mr President, the case involves an importer who is Members of the Court, charged with using invoices for a value greater than the true value in order to effect an illegal transfer of currency 1. At a space of only a few months abroad and it is therefore criminal from the judgment delivered by the proceedings which are pending before Court on 24 April this year as a pre- the national court. However, the salient liminary ruling in Case 65/79 Châtain, point in the question framed by that the Court is faced with another question court is not whether the customs auth- of interpretation concerning Regulation orities have power to reduce the value No 803/69 of the Council of 27 June declared by the importer but really 1968 on the valuation of goods for whether it is possible to fix a value for customs purposes. On this occasion also, customs purposes which is less than the

I — Translated from the Italian.