C-186/82

JUDGMENT OF THE COURT ( FOURTH CHAMBER) 5 OCTOBER 1983

Ministero delle Finanze v Esercizio Magazzini Generali SpA and Mellina Agosta Srl (references for a preliminary ruling from the Corte d'Appello, Catania)

(Payment of customs duties — Exemption)

Joined Cases 186 and 187/82

European Communities — Own resources — Customs duties — Customs debt — Theft ofgoods subject to customs duties — No extinction of customs debt (Council Directive 79/623, Art. 4)

It appears from Article 4 together with embrace the concept of theft, regardless the ninth recital in the preamble to of the circumstances in which it has been Directive 79/623 that the reasons for committed. extinction of the customs debt must be based on the fact that the goods have not been used for the economic purpose Accordingly, according to the existing which justified the application of import Community customs provisions the duties. In the case of theft, it may removal by third parties of goods subject be assumed that the goods pass into to customs duty, even through no fault the Community commercial circuit. It of the taxable person, does not follows that the loss of the goods for the extinguish the obligation to pay duty on purposes of the directive does not them.

ESERCIZIO MAGAZZINI GENERALI SPA , in liquidation , Catania ,

and

MELLINA AGOSTA SRL , Catania ,

on the interpretation of the concept of force majeure for the purposes of Community customs law ,

THE COURT ( Fourth Chamber )

composed of: A. O'Keeffe , President of Chamber , P . Pescatore , G . Bosco , T . Koopmans and K. Bahlmann , Judges ,

released for consumption if they have procedure (Official Journal, English been unlawfully removed without Special Edition, 1969 (I), p. 82) already compliance with the customs obligations provided that "the depositor and the or if, in any event, they have not been warehouse-keeper must be able to enjoy presented within the prescribed periods complete exemption from customs duties, for customs inspection and control or charges having equivalent effect and if they have not been recovered for agricultural levies in respect of losses the purposes of the above-mentioned occurring during the storage period and

Article 22 of Law No 891 of 22 December 1980 (Gazzetta Ufficiale (b) officially recognized shortages 1980, No 355) provides that "the word arising from the nature of the 'loss' in Article 37 of the Consolidated goods." Customs Laws, approved by Decree No 43 of the President of the Republic of 23 January 1973, must be interpreted Those principles are codified in Council as meaning 'dispersion' (dispersione) Directive 79/623/EEC of 25 June 1979 and not removal (sottrazione della on the harmonization of provisions laid disponibilità) of a product". The down by law, regulation or adminis following paragraph states that that trative action relating to customs debt provision is to constitute the authentic (Official Journal 1979, L 179, p. 31). interpretation of Article 37 of the The fourth recital in the preamble to that Consolidated Customs Laws. directive states that ".

. . except

Nevertheless, considering that a "By way of derogation from Article 2, presumption of the definitive release for no customs debt on importation shall be consumption of the goods in question deemed to be incurred in respect of had been raised, the customs authorities specific goods : of Catania, by letter of 31 January 1979, requested Esercizio Magazzini Generali, (a) where the person concerned proves the company which manages the customs to the satisfaction of the competent warehouse, and Mellina Agosta, the authorities that the non-fulfilment of proprietor of the stolen goods, to pay the obligations which arise [from LIT 78 205 695 as customs duty and various customs provisions which value-added tax on those goods, plus have the effect of delaying the interest and costs in connection with the release for consumption of the customs duty. In the face of that request, goods] results from the total destruc­ Esercizio Magazzini Generali lodged an tion or irretrievable loss of the said application through official channels, but goods by reason of the nature of the that was rejected. Subsequently, on 14 goods themselves or because of June 1979, the customs authorities of unforeseeable circumstances or force Catania served an order requiring majeure; payment of the above-mentioned sum together with the interest and costs.

"Whether the removal of goods subject to customs duties, carried out in the II — Written observations sub­ manner indicated above or, in more mitted to the Court general and abstract terms, by methods which, in view of the foregoing argu­ ments, assimilate such removal to a case of force majeure by virtue of ordinary 1. Observations submitted by Esercizio legal principles, may fall within the Magazzini Generali concept of force majeure as formulated in the Community customs provisions." Esercizio Magazzini Generali maintains that the theft of goods must release the proprietor from the obligation to pay 5. The orders making the reference customs duty. were received at the Court Registiy on 23 July 1982. It points out that Decree No 43 of the In accordance with Article 20 of the President of the Republic of 23 January Protocol on the Statute of the Court of 1973 refers to the special legislation Justice of the EEC, written observations relating to general warehouses, which were submitted on 14 October 1982 expressly provides that the effect of force by Esercizio Magazzini Generali, majeure is to exempt those charged with represented by Ugo Monterosso, of the the storage and the temporary admission Catania Bar, on 21 October 1982 by the of goods deposited in that kind of Government of the Italian Republic, warehouse from liability (Decree Law represented by the Avvocatura dello No 2290 of 1 July 1926 converted into Stato, in the person of Ivo Braguglia, Law No 1158 of 9 June 1927). They and on 25 August 1982 by the Com­ are also exempt from payment of duty mission of the European Communities, calculated on the basis of the nature and represented by Alberto Prozzillo, acting the quantity of the goods as established as Agent. when they were put into storage (Royal Decree No 126 of 16 January 1927). The undertaking maintains that the report of Upon hearing the report of the Judge- the Guardia di Finanza and the Rapporteur and the views of the judgment of the Tribunale di Catania, Advocate General, the Court decided to whose findings were accepted by the open the oral procedure without any Corte d'Appello in the order making the preparatory inquiry. reference, made it clear that in relation to the theft which occurred the under­ By order of 19 January 1982, the Court taking might not be accused of even decided to join the two cases for the minor negligence. According to the order purposes of the oral procedure and the making the reference, "... the theft took judgment. place in such a manner as to imply the

existence, according to the view of legal exemption from the payment of customs writers and of the courts, of a case of duty and that Article 11 of Directive force majeure (cf. judgment No 3494 of 69 / 74 / EEC , in spite of its conciseness, the Corte di Cassazione of 26 October covers all the cases suggested. 1955) and that the event was unfore­ seeable" (cf. judgment No 1274 of the Corte di Cassazione of 26 April 1954). The Court of Justice has also adopted Italian academic opinion (Messineo, that approach in judgments which refer Trattato di Diritto Civile e Commerciale) to force majeure, notably in Case 158/73 also considers that the theft amounts to a (Kampffmeyer [1974] ECR 101), Case case of unforeseeable circumstances or 149/78 (Rumi [1979] ECR 2523) and force majeure. Case 808/79 (Pardini [1980] ECR 2103). The Italian Constitutional Court has given similar rulings. In accordance with that line of thought, the Italian courts have upheld the exemption from the obligation to pay Esercizio Magazzini Generali concludes customs duty where theft is perpetrated that Article 22 of Law No 891 is by a third party and where the conduct incompatible with the Community rules, of the person who is liable for the duty is inasmuch as it restricts excessively the neither fraudulent nor negligent (Corte concept of loss due to force majeure, for di Cassazione, judgments No 6148 of which express provision was made, in 22 December 1978 and No 431 of connection with customs warehouses, by 18 January 1980). the above-mentioned Article 11 (1) of Directive 69 / 74 / EEC and, in connection with goods in Community transit on On the basis of the new Law No 891, which customs duty is payable, by Article the Corte di Cassazione amended its 4 of Directive 79/623. position and held in its judgment No 5769 of 31 October 1981 that customs duty was payable on goods stolen whilst being transported by lorry. However, in 2. Observations submitted by the Italian a similar case the undertaking concerned Government maintained that Article 37 of the consolidated version contained in Decree No 43, as interpreted in the light of Law No 891, was unconstitutional and The Italian Government submits that the accordingly the Tribunale di Catania removal of goods on which customs duty referred the case to the Italian is payable, resulting from a theft or Constitutional Court. another similar event, does not amount to the destruction or loss of those goods.

ascertain whethter, even if theft may be considering Directive 69/74, which, as said to constitute a case of force majeure, regards Italy, applies to all types of it has the effect of preventing the customs warehouses. Article 11 (3) of customs debt from arising. that directive excludes "unauthorized removal of goods" from the concept of loss, inasmuch as it provides that in such cases, customs duties and the like are to be collected "on the goods removed" on the basis of the rates applicable on the Article 4 of Directive 79/623 is of date of removal. Thus the unauthorized fundamental importance in that respect. removal (irrespective of who is It only excludes the creation of the responsible) is presumed to coincide with customs debt when the non-fulfilment of the release for consumption. the obligations in question is due to the "total destruction" or the "irretrievable loss" of the goods. That provision therefore purports to cover exclusively events which make the release for consumption of the goods objectively impossible. Thus the intention of the Article 34 of Council Regulation (EEC) Community legislature was in fact to No 222/77 adopts the same policy, limit the grounds capable of barring the inasmuch as it exempts the principal, in creation of the customs debt to those general terms, from the payment of events which prevent anyone from using duties and the like where the goods have the goods and therefore make the release been destroyed or where there is a for consumption of the goods impossible, deficiency in the goods arising from their and not those which merely prevent the nature. person liable for duty from disposing of the goods. The removal, resulting from a theft, and the consequent unavailability of the goods does not enter into that category. Rather, according to the Italian Government, the very purpose of the theft was the release for consumption That conclusion is inherent in the risk of the goods in question. Moreover, if it which the person liable for duty assumes is accepted that the removal resulting by delaying the release for consumption from theft entails the "irretrievable loss" of the goods and in the obligations of the goods, it must necessarily be which are incurred as a result of that conceded that in consequence the delay. Even if the person concerned has customs debt does not arise, which acted with reasonable care, the theft of would have the effect of preventing the the goods does not justify his failure to authorities from recovering payment of fulfil the duties imposed on him by the customs duty and other charge from the various procedures (warehouses, the person responsible for the theft and temporary storage, transit and so on). It for the release for consumption. is therefore reasonable to impose liability on him for events, such as theft, which lead to the release for consumption of the goods. Any other conclusion would not only cause considerable harm to the Community and national interests in The Italian Government thinks that the respect of the collection of duties, but same conclusion may be reached by would also encourage arranged "thefts"

The Court of Justice has referred to the The Italian Government considers that, problem of force majeure in several if its argument is accepted, it becomes judgments, but it has never had occasion completely superfluous to examine to consider the problem raised in the whether theft may constitute a case of present case. It seems nevertheless that force majeure in Community law. Indeed, the theory set out above is the that could only be of use if it were underlying principle in the cases in which accepted that the theft of goods amounts the Court has acknowledged that an to the "total destruction" or "irre­ event amounted to force majeure. In fact trievable loss" of the goods; that most of those cases involved disputes in proposition has already been excluded. agricultural matters in which a legislative measure provided for the extinction of an obligation in the event of force majeure. Even in a case in which force majeure was relied upon on the basis of 3. Observations submitted by the the general principles of law, rather than Commission a legislative measure, (Case 149/78, Rumi [1979] ECR 2523) the requirement of the extinction of an obligation was upheld. The Commission maintains that under Community customs law, in particular Directive 69/74, theft may not be regarded as a case of force majeure, The Commission adds that all the whatever the circumstances in which it is Member States apply the provisions in committed. question in the manner advocated above. The Community provisions are themselves founded on international rules. The Kyoto Convention on the To qualify as force majeure, an event Simplification and Harmonization of must either present certain characteristics Customs Procedures provides, in point or have the legal effects which the 22 of Annex E 3 thereto, that legislation attributes to force majeure. The "warehoused goods destroyed or irrevo­ effect of force majeure is to release the cably lost by accident or force majeure parties concerned from liability. If the shall not be subjected to import duties legislation in force excludes that effect in and taxes . . .". Annex B 1 to the a specific legal context, it must be Convention states that stolen goods concluded that an event, even though it shall not be regarded as destroyed or be unforeseeable, irresistible and not irrecoverably lost. Council Decision attributable to the person liable, cannot 75 / 199 / EEC of 18 March 1975 (Official qualify as force majeure. In Community Journal 1975, L 100, p. 1) concluded that customs law, the person concerned is Convention on behalf of the Community released from liability only if the goods and accepted Annex E 3 thereto con­ stored in a warehouse are "lost". Stolen cerning customs warehouses. It seems goods are not "lost" within the meaning however that Annex B 1 has not yet been of the directive. In those circumstances accepted by the Community.

2 The question was raised in the context of separate proceedings between the Ministero delle Finanze and two undertakings, Esercizio Magazzini Generali SpA and Mellina Agosta Sri. It appears from the documents before the Court that in 1978 a quantity of foreign manufactured tobacco and whisky belonging to Mellina Agosta was stolen from the customs warehouse managed in the port of Catania by Esercizio Magazzini Generali. In order to carry out the theft, the thieves forced a metal sliding door fitted with two locks. The key to one of the locks was kept by Esercizio Magazzini Generali, whilst the key to the other was held by the port customs office. The customs authorities of Catania requested both Esercizio Magazzini Generali and Mellina Agosta to pay approximately LIT 78 000 000 as customs duty and value-added tax on the stolen goods together with the legally prescribed interest and costs.

JUDGMENT OF 5. 10. 1983 — JOINED CASES 186 AND 187/82

3 In June 1979 the customs authorities served an order on the two under­ takings requiring payment of the above-mentioned sum. The undertakings contested that order before the Tribunale di Catania which ruled that the sum was not payable. The administration appealed against that judgment.

4 Italian legislation provides that in the case of goods on which customs duty is payable the event giving rise to the fiscal obligation is constituted by their release for consumption in the customs territory. Goods are regarded as having been definitively released for consumption if they have been unlawfully removed without compliance with the customs obligations. However, the event giving rise to the obligation is deemed not to have occurred when the the taxable person establishes that the failure to fulfil his customs obligations or the failure to present the goods is due to the loss or destruction of the goods through unforeseeable circumstances or through force majeure or as the result of events attributable to the minor negligence of a third party or the taxable person himself.

8 Council Directive 69 / 74 / EEC of 4 March 1969 on the harmonization of provisions laid down by law, regulation or administrative action relating to customs warehousing procedure (Official Journal, English Special Edition 1969 (I), p. 82) prescribes the rules which must be included in the provisions of Member States laid down by law, regulation and administrative action relating to that procedure. According to Article 2 thereof, the effect of the system of customs warehouses is that customs duties, charges having equivalent effect and agricultural levies are not collected during the period of storage of goods.

9 According to Article 11 (1) of the directive, the depositor and the warehouse-keeper must be able to enjoy complete exemption from customs duties, charges having equivalent effect and agricultural levies in respect of losses occurring during the storage period and attributable to unforeseeable circumstances, force majeure or causes inherent in the nature of the goods.

10 Article 11 (3) provides that in cases of unauthorized removal of goods, customs duties, charges having equivalent effect and agricultural levies shall be collected on the goods removed on the basis of the rates and amounts applicable on the date of removal.

11 Council Directive 79 / 623 / EEC of 25 June 1979 on the harmonization of provisions laid down by law, regulation or administrative action relating to customs debt (Official Journal, L 179, p. 31) determines the rules which must be incorporated in the Member States' provisions laid down by law, regu­ lation or administrative action concerning, inter alia, the creation of a customs debt.

1 4 It appears from the above-mentioned article together with the ninth recital of the preamble to the directive that the reasons for the extinction must be based on the fact that the goods have not been used for the economic purpose which justified the application of import duties. In the case of theft, it may be assumed that the goods pass into the Community commercial circuit. It follows that "loss" of the goods for the purposes of the directive does not embrace the concept of theft, regardless of the circumstances in which it has been committed.

is In reply to the question submitted by the Corte d'Appello, Catania, it should therefore be stated that according to the existing Community customs provisions the removal by third parties of goods subject to customs duty, even through no fault of the taxable person, does not extinguish the obligation to pay duty on them.

Costs

16 The costs incurred by the Italian Republic and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable; as these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings pending before the Corte d'Appello, Catania, the decision on costs is a matter for that court.

MINISTERO DELLE FINANZE v ESERCIZIO MAGAZZINI GENERALI

On those grounds,

J. A. Pompe A. O'Keeffe Deputy Registrar President of the Fourth Chamber

OPINION OF MR ADVOCATE GENERAL MANCINI DELIVERED ON 6 JULY 1983 1

Mr President, goods subject to customs duty are Members of the Court, removed by a third party, through no fault of the taxable person, extinguishes 1. This reference for a preliminary the fiscal obligation on the ground that ruling concerns Community customs the impossibility of fulfilling that provisions. The point at issue is whether, obligation is attributable to a case of under those provisions, the fact that force majeure.

1 — Translated from the Italian.