C-152/01

KYOCERA

OPINION OF ADVOCATE GENERAL JACOBS delivered on 23 January 2003 1

1. In this case the Bundesfinanzhof (Federal The relevant legislation Finance Court), Germany, has asked the Court two questions concerning the effect on the customs value of goods of interest payments made in connection with their purchase but not disclosed in the customs declaration form or in the invoices sub- mitted with that form. Community legis- lation excludes interest payments from the customs value of the goods provided that they are 'distinguished from the price actually paid or payable'. 3. At the material time the customs value of goods was determined by Council Regu- lation (EEC) No 1224/80 of 28 May 1980 on the valuation of goods for customs p u r p o s e s 4 ('the basic regulation'). Article 3(1) provides:

2. It was decided to postpone preparation of the present Opinion until the Court had delivered its judgment in Overland Foot- 'The customs value of imported goods wear, 2 which concerned the interpretation determined under this Article shall be the of similarly worded legislation 3providing transaction value, that is, the price actually for the exclusion from the customs value of paid or payable for the goods when sold for goods of 'buying commissions'. That judg- export to the customs territory of the ment was delivered on 5 December 2002. Community, adjusted in accordance with Article 8...'. 1 — Original language: English 2 — Case C-379/00. 3 — Article 33(e) of Council Regulation (EEC) No 2913/92 of 4 —OJ 1980 L 134, p. 1, as amended by Council Regulation 12 October 1992 establishing the Community Customs (EEC) No 3193/80 of 8 December 1980, OJ 1980 L 333, Code, OJ 1992 L 302, p. 1. p. 1.

5. Article 8(1) lists certain items to be 8. Article 19(1)(b) provides that provisions added to the price actually paid or payable necessary for the implementation of inter for the imported goods in determining the alia Articles 3, 8 and 16 are to be adopted customs value under Article 3. The list in accordance with a prescribed procedure. includes 'commission and brokerage, In accordêance with that procedure Com- except buying commissions'; 5 it does not mission Regulation (EEC) No 1495/80 include interest payments. Article 8(3) implementing certain provisions of Council states that no additions are to be made to Regulation (EEC) No 1224/80 6 ('the the price actually paid or payable in deter- implementing regulation') was adopted on mining the customs value except as pro- 11 June 1980. vided in that article.

6 — OJ 1980 L 154, p. 14, as amended by Commission Regulation (EEC) No 220/85 of 29 January 1985, OJ 1985 5 — Article 8(1)(a)(i). L 25, p. 7.

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9. Article 3(2) of the implementing regu- — the claimed rate of interest does lation provides: not exceed the level for such trans- actions prevailing in the country where, and at the time when, the finance was provided.'

subject to interest payments. The customs distinguished from the price of the declaration showed the price net of the goods if at the material time, namely interest charges, which were discovered by the acceptance of the customs declar- customs officials during an audit examin- ation, only the invoice for the net price ation of Kyocera's imports. The customs of the goods has been submitted to the authorities assessed additional duty on the customs office and that invoice — like interest. Kyocera made an unsuccessful the declaration of customs value — administrative complaint and subsequently does not reveal either expressly or by challenged the assessment before the implication that in the context of the Finanzgericht (Finance Court). transaction to be assessed interest was also paid by the buyer to the seller?

2. If the answer to Question 1 is in the 12. The Finanzgericht dismissed the action, negative: taking the view that the interest formed part of the customs value of the goods. Kyocera appealed on a point of law to the Bundesfinanzhof. The parties are at odds over whether interest not shown on the customs declaration, either separately or as part of the purchase price, is correctly to be Do the interest payments then form regarded as 'distinguished from the price' in part of the customs value of the goods?' accordance with Article 3(2)(a) of the implementing regulation. The Bundesfi- nanzhof has accordingly referred the fol- lowing questions to the Court:

The first question referred

' 1 . Must Article 3(2)(a) of Commission Regulation (EEC) No 1495/80 of 13. By its first question, the referring court 11 June 1980 implementing certain essentially asks what is meant by 'distin- provisions of Council Regulation guished from the price actually paid or (EEC) No 1224/80 on the valuation payable' and in particular whether that of goods for customs purposes condition is satisfied where both the cus- (OJ 1980 L 154, p. 14) as amended toms declaration and the invoice submitted by Regulation (EEC) No 220/85 therewith mention only the net price paid (OJ 1985 L 25, p. 7) be interpreted as with no reference to interest payments meaning that payments of interest are made by the buyer to the seller.

14. The Finanzgericht, whose views are set mitted in support show only the net price of out in the order for reference, had held the goods and neither explicitly nor impli- that, being a condition for the transaction citly indicate that the buyer also paid the taking place, interest paid by the buyer to seller interest. the seller in principle formed part of the transaction value within the meaning of Article 3(1) and (3) of the basic regulation. The only case in which it was not brought into the determination of the customs value was where the requirements of Article 3(2) of the implementing regulation were fulfil- led. In the disputed case, the requirement of 16. I agree with that interpretation, for the Article 3(2)(a) of that regulation, namely following reasons. that the charges are to be distinguished from the price actually paid or payable for the goods, was not fulfilled. That distinc- tion had to be made not later than the time of the acceptance of the customs declar- ations and be apparent from the documents submitted to the customs authority because only then would an examination of the distinction by the customs authority be 17. Article 8(3) of the basic regulation possible. The Bundesfinanzhof shares the explicitly states that 'No additions shall concern that, unless it was apparent from be made to the price actually paid or the documents submitted to the customs payable in determining the customs value authority that interest payments had been except as provided in this Article' (which made, that authority could not check makes no mention of interest payments). whether they were validly excluded from Article 3(2) of the implementing regulation the customs value. is similarly explicit that 'Charges for inter- est... shall not be included in the customs value'. The Court has confirmed that, by laying down the principle that the trans- action value is 'the price actually paid or payable for the goods when sold for export to the customs territory of the Community', Article 3(1) of the basic regulation indicates that that price may be adjusted only in accordance with Article 8 thereof; 8it has also stated, with specific reference to the 15. Only Kyocera and the Commission status of payments of interest by the buyer have submitted written observations. No to the seller in consideration of deferred hearing was held, none having been payment, that 'subject to the adjustments requested. Both Kyocera and the Commis- provided for in Article 8 of [the basic sion consider that the referring court's first regulation], payment for services provided question should be answered in the affirm- to the buyer on the purchase of imported ative: the condition that the interest pay- ments are distinguished from the price of the goods is satisfied where both the 8 — Case290/84 Mainfrucht Obstverwertung [1985] ECR customs declaration and the invoice sub- 3909, paragraph 23 of the judgment.

9 — Case C-21/91 Wünsche [1992] ECR I-3647, paragraph 16 21. Mainfrucht 15 concerned the cost of of the judgment. transport after importation into the cus- 10 — See paragraph 4 above. 11 — See Wünsche, cited in note 9, paragraphs 19 and 20 of the toms territory of the Community, which judgment. 12 — Paragraph 14 of the Opinion in Wünsche, cited in note 9, Caragraphs 30 and 31 of the Opinion in Case C-340/93 hierschmidt [1994] ECR I-3905 and paragraph 16 of the 13 — See the sixth recital in the preamble to the basic regulation Opinion in Case C-93/96 ICT [1997] ECR I-2881 and Mainfrucht, cited in note 8, paragraph 35 of the respectively. In addition Advocate General Lenz in Case judgment. C-79/89 Brown Boveri [1991] ECR I-1853 described the 'distinguishing' of costs as 'an attenuated form of 14 — Set out in paragraph 6 above. evidence': see paragraph 87 of his Opinion. 15 — Cited in note 8.

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OPINION OF MR JACOBS — CASE C-152/01

cannot form part of the customs value of comprises two elements one of which is those goods. It may be noted that Advocate dutiable and the other not. If the two General Mischo in Overland Footwear 20 elements are separated from the outset, adopted a similar approach. there is no need to distinguish them.

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cases concerning customs declarations ify).' According to the Commission, interest showing a composite figure comprising is to be mentioned under that rubric. If that both a dutiable and a non-dutiable element is correct, the interest can be treated as a are of assistance in determining the lawful- deduction only if it has first been included ness of declarations showing a dutiable in the price of the goods entered under figure net of non-dutiable ancillary costs. section A, basis of calculation.

30. The Commission adds that failure to observe that formal obligation neither gives 28. I accordingly conclude that the require- rise to a customs debt nor leads to any ment in Article 3(2)(a) of the implementing Community law sanction. regulation that interest payments are dis- tinguished from the price of the goods is satisfied where both the customs declar- ation and the invoice submitted in support show only the net price of the goods and neither explicitly nor implicitly indicate that the buyer also paid the seller interest. 31. Since however the national court has not referred a question on that issue, I do not propose to consider it further.

29. The Commission in its written obser- vations raises a further point. It submits that, even though for the purpose of Article 3(2) of the implementing regulation The second question referred interest is sufficiently distinguished from the price of the goods in the circumstances set out in the preceding paragraph, the importer is none the less obliged to indicate the existence of such interest payments on the customs declaration referred to above. 27 That form includes under section 32. Since I consider that the national C, deductions, '21. Other charges (spec- court's first question should be answered in the affirmative, the second question, which is put only if the answer to the first 27 — Paragraph 10. question is in the negative, does not arise.