C-86/97

IV — Legal Framework I-1045

V — Views put forward in the preliminary reference proceedings I - 1049

VI — My answer to the questions referred for a preliminary ruling I - 1050

(A) Defining the field of application of Articles 900 and 905 of Regulation (EEC) No 2454/93 I- 1050

(B) Division of powers between the national customs authorities and the Com­ mission under Article 905 et seq. of the implementing regulation I - 1053

(a) Discretion of the national customs authorities under Article 905(1) of the implementing regulation I - 1053

(b) In this case I-1060

VII — Conclusion I-1064

* Original language: Greek.

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OPINION OF MR COSMAS — CASE C-86/97

I — Introduction remission of the import duties on grounds of equity. The plaintiff then brought an action for annulment before the Finanzgericht (Finance Court) challenging the refusal to refer the application for remission to the Commission in accordance with Community customs law; that action was unsuccessful. In this case the Court is asked to give a pre­ The Finanzgericht held in particular that Com­ liminary ruling on two questions referred to munity law entirely ousted the provisions of it by the German Bundesfinanzhof (Federal national law allowing tax concessions on equi­ Finance Court). Those questions relate to the table grounds. It found that the conditions interpretation of Commission Regulation for referring the case to the Commission were (EEC) No 2454/93 of 2 July 1993 laying not met because there was no 'special situa­ down provisions for the implementation of tion' within the meaning of Article 905(1) of 3 Council Regulation (EEC) No 2913/92 estab­ Commission Regulation (EEC) No 2454/93 lishing the Community Customs Code. 1 (hereinafter 'the implementing regulation').

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circumstances which, in his view, justify the goods from a customs warehouse (non- remission of the assessed duties. Community goods) the conditions in Article 900(1)(a) of Regulation No 2454/93 for remission of customs duty to the owner of the warehouse are not met?

3. The referring court considered that the interpretation of the provisions of Commu­ nity law on customs duties relevant for deciding this case was not obvious and it therefore referred two questions to the Court for a preliminary ruling. The first is concerned 2. If Question 1 is answered in the affirma­ with defining the field of application of Arti­ tive: cles 900(1)(a) and 905(1) of the implementing regulation, in particular in cases where the applicant pleads the theft of imported non- Community goods; the second relates to the interpretation of the term 'special situation' used by the Community legislature in Article 905(1) of the implementing regulation.

Does the same apply in a case of hard­ ship where theft was not an insurable risk and the levying of customs duty would destroy the warehouse owner's business, or may it be found on such III — Questions referred for a preliminary facts that there is a 'special situation' ruling under Article 905(1) of Regulation No 2454/93 which should be referred to the Commission for decision?'

'1 . Is Article 905(1) of Commission Regula­ tion (EEC) No 2454/93 of 2 July 1993 IV — Legal Framework laying down provisions for the imple­ mentation of the regulation establishing the Community Customs Code (OJ 1993 L 253, p. 1) to be interpreted as meaning that the decision-making customs authority is not to accept that there is a "special situation resulting from circum­ stances in which no deception or obvious negligence may be attributed to the 4. The basic provision dealing with the ques­ person concerned" if on the theft of tion of the repayment or remission of import

— to be determined in accordance with the procedure of the committee; 5. The provisions required for the implemen­ tation of that provision were adopted, pur­ suant to Article 249 of the Community Cus­ toms Code, in the abovementioned 5 Commission Regulation (EEC) No 2454/93. The relevant provisions are contained in Chapter 3 ('Specific provisions relating to the application of Article 239 of the Code') of Title IV ('Repayment or remission of import — resulting from circumstances in which no or export duties') of Part IV ('Customs debt') deception or obvious negligence may be of the implementing regulation. It should be attributed to the person concerned. The noted that the Community legislature distin­ situations in which this provision may be guishes between decisions to be taken by the applied and the procedures to be followed customs authorities of the Member States to that end shall be defined in accordance (Section 1 of the abovementioned Chapter 3, with the Committee procedure. Repay­ that is to say Articles 899 to 904) and those ment or remission may be made subject to be taken by the Commission (Section 2 of to special conditions. that chapter, that is to say Articles 905 to 909). More precisely, the relevant provisions for

4 — Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p . 1). 5 — See footnote 1 above.

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answering the questions referred for a pre­ from deception or obvious negligence on liminary ruling in this case are as follows: the part of the person concerned, it shall repay or remit the amount of import duties concerned.

(a) non-Community goods placed under a — is based on grounds corresponding to one customs procedure involving total or par­ of the circumstances referred to in Articles tial relief from import duties or goods 900 to 903, and that these do not result released for free circulation with favour

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OPINION OF MR COSMAS — CASE C-86/97

able tariff treatment by reason of their (b) destruction, for any reason whatsoever, end-use are stolen, provided that the goods save in the cases expressly provided for are recovered promptly and placed again by Community legislation, of goods in their original customs situation in the entered for a customs procedure involving state they were in when they were stolen; the obligation to pay import duties after their release by the customs authorities;

(c) presentation, for the purpose of obtaining preferential tariff treatment of goods declared for free circulation, of docu­ ments subsequendy found to be forged, falsified or not valid for that purpose, even where such documents were pre­ sented in good faith.

Article 904 Section 2

constitute a special situation resulting from 7. (i) The plaintiff asserts that Article 900 of circumstances in which no deception or the implementing regulation does not exhaus­ obvious negligence may be attributed to the tively cover the question of remission of person concerned, the Member State to which import duties on the ground that goods have this authority belongs shall transmit the case been stolen; that is to say, there are cases of to the Commission to be settled under the remission on grounds of theft which fall procedure laid down in Articles 906 to 909. within Article 905(1) of that regulation. Fur­ thermore, interpreting Article 905(1) in the light of national law, the 'special situation' forming the basis for the application of Article 905(1) may consist in the fact that the debtor would be financially ruined if he were forced to pay the duties; in that case the duties must The term "the person concerned" shall be be remitted on grounds of equity. interpreted in the same way as in Article 899.

In all other cases, the decision-making cus­ toms authority shall refuse the application.

Italian Government reaches similar conclu­ negligence may be attributed to the person sions. It takes the view that the theft of the concerned' and not as to whether it in fact goods does not in this case constitute a 'spe­ constitutes a special situation justifying the cial situation' justifying remission of duty. remission of duties as the national court mis­ According to the Italian Government, a nega­ takenly considers. The Commission main­ tive reply must also be given to the plaintiff's tains that this case must be assessed in accor­ request that the risk of his financial ruin if the dance with the above approach to the duties are levied be regarded as a special situ­ interpretation of Article 905 and not by ation justifying remission, having regard to seeking to ascertain whether the remission to the uninsurability of the stolen goods. the applicant of the duties set out in the assessment is justified on grounds of equity.

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17. That solution also prevailed in Schoeller- Bundesfinanzhof to the Court for a prelimi­ shammer where the Court was concerned nary ruling. However, inability on the part of with the repayment or remission of import or the national customs authority to 'take a 9 export duty under Regulation No 1430/79. decision' under Articles 899 to 904 of the The Court was asked to rule on the applica­ implementing regulation is not the only pre­ tion of Articles 3, 4 and 13 of that regulation condition for the referral of the application to and held: 'In the light of the preamble to the the Commission under Article 905(1). The regulation, Article 13 appears to the Court to national authority is asked to assess whether be a general equitable provision designed to '... the application is supported by evidence cover situations other than those which had which might constitute a special situation most often arisen in practice and for which resulting from circumstances in which no special provision could be made when the deception or obvious negligence may be attrib­ regulation was adopted. It is clear from the uted to the person concerned ..." before it conditions which must be satisfied by per­ transmits the case to the Commission. The sons wishing to benefit from Articles 3 and 4 entirely justified doubts of the national court, that those provisions were not drawn up to which resulted in its referring the questions cover the particular situation in which the in this case to the Court for a preliminary applicant finds itself. In those circumstances, ruling, relate precisely to the interpretation of the Court sees no reason in this case to that precondition. I elaborate upon that issue exclude the possibility of applying Article in the continuation of my analysis. 13.' 10

national court in reply to the questions referred with a view to reaching a definitive decision by it for a preliminary ruling is as useful as as to whether or not the applicant's case con­ possible for settling the dispute before it. As stitutes a 'special situation' justifying the the Commission correctly points out, the role remission of the duties on grounds of equity; which the Community legislature confers on its competence does not extend beyond the national customs authorities in connec­ assessing whether the evidence relied on by tion with the application of the general equi­ the applicant relates to 'circumstances in which table provision enacted in Article 905 does no deception or obvious negligence may be not consist in making an exhaustive selection attributed to the person concerned' and which of the cases where remission of the assessed might be regarded as a 'special situation'. The duties is justified on grounds of equity but in question as to whether that situation justifies making an initial selection of those applica­ the remission of duties will be decided by the tions which prima facie could be brought Commission in accordance with Articles 905 within the general equitable provision. Those to 909 of the implementing regulation. applications are then referred to the Commis­ sion, which alone is competent to decide the issue. That, moreover, is the reason why Article 905(1) expressly provides that the national customs authority is to transmit the case to the Commission where '... the appli­ 11 cation is supported by evidence which might constitute a special situation resulting from circumstances in which no deception or obvious negligence may be attributed to the 21. As the Commission observes, correcdy in person concerned ...'. my view, when the national court begins its consideration of Article 905(1) of the imple­ menting regulation it appears, in its interpre­ tation, to proceed from an incorrect starting point in that it takes the view that the national customs authorities are required, when assessing the case, to conclude with certainty whether or not the circumstances invoked by the applicant for remission constitute a 'spe­ cial situation' within the meaning of that article. At first instance the Finanzgericht appears likewise to have relied on the same incorrect basis in its interpretation. 20. Thus, the national authority is not asked to consider the application submitted to it

for a preliminary ruling, that the assessment (i) Historical approach under Article 905(1) by the national customs authority (the Hauptzollamt) of the facts and law which the plaintiff has relied on before it — namely the very fact of the theft itself, the place where it occurred, the fact that the goods were uninsured and the risk of finan­ 23. It is useful first of all to examine how the cial ruin in the event of payment of the duties Community legislation evolved until Article — must not have the objective of reaching a 905(1) of the implementing regulation, which definitive decision as to whether those factors is in force today, was adopted. As already constitute a special situation justifying the mentioned, 13there was also formerly a gen­ remission of duties; it must be examined, on eral equitable provision in Article 13 of the other hand, whether those factors relate 14 Council Regulation (EEC) No 1430/79, to circumstances in which no deception or which laid down that 'import duties may be obvious negligence may be attributed to the repaid or remitted in situations resulting from person concerned and which might be special circumstances in which no negligence regarded as a 'special situation' to be consid­ or deception may be attributed to the person ered subsequently by the Commission with concerned'. It is to be noted that the pre­ regard to whether the remission of duties is 12 amble to that regulation stated: '... only those justified. special situations most frequently encoun­ tered in practice may at the present stage be covered by regulations relating to repayment or remission of import duties; ... it is advis­ able to make provision for the use of a Com- 15 munity procedure in order to define, where appropriate, other situations which also war­ rant repayment or remission of import duties'. (b) Interpretation of Article 905 et seq. on Article 13 was subsequently amended by 16 the basis of their history and of the scheme Council Regulation No 3069/86. The pre­ of the legislation amble to the amending regulation stated: '... experience has shown that there is no reason why responsibility for deciding on such appli­ cations for repayment or remission cannot be 17 assumed by the Member States themselves, provided it is established that, where the pro­ cedural requirements have not been observed, the substantive conditions laid down for repayment or remission have been met and The above conclusion is also borne out by the interpretation of the relevant Community provisions on the basis of their history and of 13 — See point 17 above. the scheme of the legislation. 14 — Council Regulation (EEC) No 1430/79 of 2 July 1979 on the repayment or remission of impon or export duties (OJ 1979 L 175, p. 1). 15 — Emphasis added.

— first, cases which are exhaustively covered by legislation, that is to say are not to be dealt with under the general principle of equity. In those instances the indefinite concept of equity has been transformed 24. After the adoption of the Community 19 into concrete special provisions and the Customs Code, the Community legislature discretion of the decision-making body is returned to the question of the general equi­ particularly restricted. Those applications table provision. It repealed the abovemen- are assigned to the national customs tioned provisions and adopted the relevant provisions of Article 905 et seq. of the imple­ authorities; menting regulation. In the pertinent chapter of the implementing regulation, powers were divided clearly between the national authori­ ties and the Commission with a view to strengthening the role of the latter, in par­ ticular in cases where the general equitable provision has to be applied to the facts in order for the application for remission to be dealt with and a wide discretion is conferred — secondly, cases which the legislature was on the decision-making administrative body. unable to foresee in advance and thus cover exhaustively. Those cases must be considered in the light of the general prin­ 18 — It should be noted that the body applying Article 13 of ciple of equity and the competent admin­ Regulation No 1430/79, both before and after its amend- istrative body then enjoys a very wide ment, is called on to assess whether a special situation justi- fies the remission of duty and not whether a circumstance discretion. Such cases are thus assigned to might constitute a special situation. In other words. Article 13 of Regulation No 1430/79 corresponds to Article 907 of the Commission, in the interests of the the regulation implementing the Community Customs Code and not to Article 905 with which we are concerned in the optimal application of Community law. instant case. Article 905(1) of the implementing regulation establishes a preliminary stage in the assessment of applica- tions for remission which precedes the stage to which Article 13 of Regulation No 1430/79 and Article 907 of the imple- menting regulation relate. 19 — Namely Articles 900 to 904 of the implementing regulation.

(ii) Approach based on the scheme of the 905(1) in such a way that they consider the legislation substance of cases in depth and decide them selves whether the general equitable provision should be applied in favour of applicants for remission, there is the risk of systematic refusal of the applications in question, no longer by the body on which the power of 26. The argument derived from interpreting decision has been conferred (namely the Com the implementing regulation on the basis of mission) but by those bodies which, according the scheme of the legislation is also particu to the true meaning of the Community pro larly significant. In the Community customs vision, are merely to undertake an initial system it is for the Commission to take the sorting out of the applications without con definitive decision regarding application of sidering fully the substance of the cases. the general equitable provision in cases not expressly provided by Articles 900 to 904 of the implementing regulation. The case must therefore finally come to that body for its consideration, unless the applicant for remis sion relies on circumstances in which decep tion or obvious negligence may be attributed to him or his application is entirely without 28. Upsetting the balance intended by the foundation; however, where the application is Community legislature in the division of supported by evidence which might consti powers between the national customs authori tute a 'special situation' within the meaning ties and the Commission results in prejudice of Article 905(1) of the implementing regula to the Community customs system at a more tion the case must be transmitted to the Com

27. Otherwise, that is to say if the national natural adjudicator, that is to say the Com customs authorities interpret and apply Article mission.

31. It is necessary, in my view, to make three further observations at this point.

(C) The question as to what might constitute 'a special situation resulting from circum- stances in which no deception or obvious neg- ligence may be attributed to the person con- cerned' within the meaning of Article 905(1) of the implementing regulation

32. First, a purely Community rule is laid down in Article 905(1) of the implementing regulation and, contrary to the plaintiff's view, no purpose is served when interpreting it to refer to the provisions of German law laying down the general principle of equity in tax 30. I consider that the above analysis reveals cases. The Community provisions concerning with clarity the interpretative framework the remission of duty on grounds of equity,

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20 — Such as Article 13 of Regulation No 1430/79, both before and after its amendment by Regulation No 3069/86. 21 — See Joined Cases 98/83 and 230/83 Van Gend & Loos v Commission [1984] ECR 3763; Joined Cases C-121/91 and C-122/91 CT Control and JCT Benelux v Commission [1993] 34. Thirdly, the question of the correct inter­ ECR I-3873; Joined Cases 186/82 and 187/82 Ministem delle Finanze v Esercizio Magazzini Generali and Mellina Agosta pretation and application of Article 905(1) of [1983] ECR 2951, paragraph 14; Case C-250/91 Hewlett the implementing regulation has not yet been Packard France v Directeur Général des Douanes [1993] ECR I-1819; and Case C-446/93 SEIM v Subdirector-Geral dealt with sufficiently in administrative prac­ das Alfândegas [1996] ECR I-73. It should be noted that the Court usually adopts a strict approach with regard to the tice and in case-law. It should also be noted, grounds which applicants for the remission of duty put for- with regard to the examination of the matters ward to justify the application of the equitable provision; in one instance, nowever, it accepted the possibility that there relied on each time by the applicant for remis­ may be a situation justifying the remission of duties. In Hewlett Packard France, cited above, the Court held that sion which is carried out in order to establish the fact that a trader had relied on incorrect information whether those matters might constitute a spe­ supplied to a company belonging to the same group as the person liable by a competent customs authority in a Member cial situation resulting from circumstances in State other than that of the customs authority competent to effect post-clearance recovery could constitute a special situ- which no deception or obvious negligence is ation of the kind referred to in Article 13 of Regulation No 1430/79 (paragraph 47). present, that, while experience gained to date

36. In my view, the order for reference made by the national court fails to set out exhaus­ tively the legal and factual aspects of the dis­ pute before it and thus provide a full picture of the circumstances relied on by the plaintiff in order to secure the remission of the import duties to which he was assessed; it therefore — secondly, each application must be con­ cannot be concluded with certainty whether sidered individually. The first paragraph or not the plaintiff's case might amount to a of Article 907 of the implementing regula­ 'special situation' within the meaning of tion clearly establishes the particular and Article 905(1) of the implementing regulation. specific nature of the examination: 'After Nor does the Court have jurisdiction to rule consulting a group of experts composed on the substance of the case, which remains of representatives of all Member States, exclusively for the national court to assess; meeting within the framework of the Com­ the Court merely interprets the Community mittee to consider the case in question, the provisions which are relevant for disposing of Commission shall decide whether or not the main proceedings. In that light, I believe the special situation which has been con- that the task of the Court in this case is largely sidered justifies repayment or remission.' completed, even though the legal analysis of The preliminary examination carried out by the national authorities under Article 905(1) of the implementing regulation 22 — For the need to deal individually with each application sub- mitted, sec also point 75 of my Opinion in SEIM, cited above in footnote 21.

37. According to the order for reference, the plaintiff contended that he was in a special situation justifying the application of Article 905(1) of the implementing regulation because: (i) the goods to which the duties related had been stolen; (ii) the goods were uninsurable; (iii) the goods had been stored within a geo­ 39. In that regard, the plaintiff's view is, I graphical area pregnant with particular danger; believe, reinforced by the argument that the and (iv) payment of the duties imposed would goods by their nature — cigarettes are bulk lead to his financial ruin. goods which cannot be identified — could not be located with certainty after the theft, for the purposes of Article 900(1) of the imple­ 24 menting regulation. Thus, since the goods are products which cannot be identified and it is objectively not possible to apply the favourable provision contained in Article 900(1)(a) of the implementing regulation, the plaintiff maintains that the relevant provisions 38. First of all, the theft of the goods is a cir­ of Article 905(1) of that regulation must be cumstance which prima facie might constitute interpreted less strictly and must result in his a 'special situation' within the meaning of application being accepted and referred to the Article 905(1), inasmuch as the trader affected Commission. On the face of it, that view is is in a situation which is different and distinct not illogical. from that of traders carrying on the same activity who have not been the victims of theft. It is, of course, a precondition that not only deception but also obvious negligence 23 — See the strict interpretation adopted by the Court in Min- istero detle Finanze v Esercizio Magazzini Generali, cited cannot be attributed to the trader concerned. above in footnote 21. It would in any event be difficult, in accor­ 24 — The plaintiff surmises, furthermore, that the cigarettes stolen from him are among the large quantities of contraband ciga­ dance with the case-law of the Court to rettes found and seized in Germany.

41. In any event I consider, in the context of 42. The plaintiff also invokes the fact that the the questions referred for a preliminary ruling stolen goods were not insurable against the in this case which are designed to ascertain risk of theft. I am not in a position, on the the correct interpretation of Article 905(1) of basis of the information contained in the the implementing regulation, that the plaintiff order for reference, to express a clear view as is wrong in his assertion that the theft he suf­ to whether that argument satisfies the condi­ fered automatically justifies the remission of tions laid down by Article 905(1) of the the duties imposed on him; however, the implementing regulation so as to justify the French and Italian Governments are also mis­ transmission of the case to the Commission taken in their view that the theft of goods, for further consideration; nor do I intend to even if not due to deception or obvious neg­ substitute my analysis for that of the national ligence on the part of the person concerned, authorities which by law have the compe­ can never be considered to be a 'special situ­ tence for deciding those issues. It is, however, ation' within the meaning of Article 905(1) important that those authorities examine because, in accordance with case-law and prac­ whether the lack of insurance in respect of tice to date, circumstances of that kind do not the goods may be attributed to deception or justify the remission of duties on grounds of obvious negligence on the part of the person equity. The question whether or not the theft concerned, in which case the application is to suffered by the plaintiff ultimately justifies be refused automatically. On the other hand, the remission of the duties imposed on him the rejection of the above submission as a will be decided by the Commission under the possible justification for transmitting the case procedure set out in Article 907 of the imple­ to the Commission cannot, in my view, be based simply on the fact that, as the French and Italian Governments and the Commis­ sion rightly point out, it is unlikely that that 25 — Sec Ministero delle Finanze v Esercizio Magazzini Generali, cited above in footnote 21, paragraph 14. argument will provide grounds justifying the

45. In conclusion, only general guidance can 44. Finally, I consider that, as the French and be given to the national court with regard to Italian Governments and the Commission cor­ the question whether the facts of the case rectly point out, a special circumstance capable before it fall within Article 905(1) of the implementing regulation. It must in any event be emphasised that, when the national cus­ 26 — It is in fact accepted in analogous cases that circumstances toms authorities consider applications for the of that kind are linked to the entrepreneurial risk inherent in the nature of the activity carried on by the trader liable remission of duty within the framework of to pay the duties. It is worth referring here to three judg- Article 905(1) of the implementing regulation, ments of the Court: first, Schoellershammer, cited above in footnote 8, concerning an application for remission on the the possibility that a 'special situation' exists ground that the goods were erroneously entered for free cir- culation; secondly, Hewlett Packard France, cited above in may be deduced from the overall assessment footnote 21, concerning an application for the repayment of duties imposed because of an error by the competent authori- of the evidence and circumstances relied on ties themselves which could not reasonably be detected by by the applicant, and the case must be trans­ the person liable to pay them; thirdly, CT Control and JCT Benelux, cited above in footnote 21, concerning an applica- mitted to the Commission in the case of tion for the repayment of dudes because of the subsequent withdrawal of the import certificates by the competent cus- doubt. toms authority. However, the Court held in Hewlett Packard France, at paragraph 47, that it was possible for the repayment of the duties to be justified on the basis of the specific circum- stances in which the error came about for the applicant (see 28 — As the Commission and the French and Italian Govern- footnote 21 above). ments correctly state, an analogous point was previously put 27 — See, on this point, Case 58/86 Coopérative Agricole to the Court in Van Gend & Loos, cited above in foot- d'Approvisionnement des Avirons v Receveur des Douanes note 21. In its judgment the Court held that the argument [1987] ECR 1525, in particular paragraph 22. In that case the that the applicants for remission were unable to recover their applicant for the repayment of import duties had invoked loss from their clients because the latter had gone into liq- the particular circumstances in which maize is imported into uidation did not constitute a ground for the remission of Réunion; the Court rejected the submission in question. duty.

(3) When the national customs authorities consider an application for the remis­ sion of customs duties within the framework of Article 905(1) of the imple­ menting regulation, they must assess the matters raised in order to establish whether they 'might constitute a special situation resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned' and, if so, they are to transmit the case to the Commission. Situa­ tions which are not special, are not fully proven or are due to deception or obvious negligence on the part of the person concerned do not warrant the transmission of the case to the Commission but the rejection of the applica­ tion. In any event, the national customs authorities may not base the rejection of the application solely on the fact that, on their assessment, the applicant's situation does not amount to one justifying the remission or the repayment of the import duties imposed on him.

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