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particulars or the declaration after it has goods (paragraph 1). In particular, '[w]here been accepted by customs. The amendment revision of the declaration or post-clear- shall not have the effect of rendering the ance examination indicates that the provi- declaration applicable to goods other than sions governing the customs procedure those it originally covered. concerned have been applied on the basis of incorrect or incomplete information, the customs authorities shall, in accordance with any provisions laid down, take the measures necessary to regularise the situ- ation, taking account of the new infor- However, no amendment shall be per- mation available to them' (paragraph 3). mitted where authorisation is requested after the customs authorities:

(a) have informed the declarant that they intend to examine the goods; or, Authorisation of customs procedures with economic impact

(b) have established that the particulars in question are incorrect; or, 7. Under Article 85, the use of certain customs procedures (so-called customs pro- cedures with economic impact, which include outward processing) is subject to authorisation by the customs authorities. The authorisation sets out the 'conditions (c) have released the goods.' under which the procedure in question is used' (Article 87(1)), which vary according to the procedure chosen.

Post-clearance examination of declarations 8. So that it is possible to check that those conditions still obtain, Article 87(2) states that '[t]he holder of the authorisation shall 6. Under Article 78 of the code, the cus- notify the customs authorities of all factors toms authorities may also amend a customs arising after the authorisation was granted declaration, on their own initiative or at the which may influence its continuation or request of the declarant, after release of the content'.

12. It is appropriate to point out here that, under Article 145(3), '"temporary export goods" means goods placed under the (b) the amount of duty legally owed failed outward processing procedure', '"process- to be entered in the accounts as a result ing operations" means the operations of an error on the part of the customs referred to in Article 114(2)(c), first, second authorities which could not reasonably and third indents', in other words 'the have been detected by the person liable working of goods, including erecting or for payment, the latter for his part assembling them or fitting them to other having acted in good faith and com- goods, the processing of goods, the repair

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of goods, including restoring them and processing procedure is not fulfilled, unless putting them in order'. Finally, as far as it is established that the failures have no concerns us here, '"compensating prod- significant effect on the correct operation ucts" means all products resulting from of the said procedure'. processing operations'.

GEFCO

Triangular traffic tariff and statistical nomenclature and the Common Customs Tariff 5introduced the combined nomenclature, classifying goods under appropriate headings ('the CN head- 17. The provisions relating to triangular ings'), primarily for the purpose of applying outward processing set out in Articles 748 the rates of duty of the common customs to 787 of Regulation No 2454/93 of 2 July tariff. 1993 ('the implementing regulation') 4are also relevant to the present case.

18. Under Article 748, in particular, triangular outward processing occurs when the compensating products are released for I — Facts and procedure free circulation with a customs adminis- tration other than that from which the goods were temporarily exported.

21. The dispute in the main proceedings arises out of a triangular outward process- ing operation involving, in various capac- 19. As far as the present case is concerned, ities, the companies Hewlett Packard Ita- Article 778 then provides that the goods liana, Hewlett Packard France and Hewlett entered for the procedure must be accom- Packard Europe ('HP Italy', 'HP France' panied by an 'information sheet' known as and 'HP Europe' respectively), the customs 'INF 2', which must be presented to the agent GEFCO SA ('GEFCO') and the customs office when the declaration for French and Italian customs authorities. release for free circulation is lodged (Article 781).

22. In 1995 HP Italy obtained authori- sation from the Italian customs authorities The combined nomenclature to use the outward processing procedure for the temporary exportation of hardware components (electronic cards), which were declared under CN heading 8473 30 90, 20. Finally, it should be recalled that and for the subsequent importation of laser Council Regulation No 2658/87 on the printers as compensating products.

26. At the time of reimportation GEFCO, which acted as customs agent for HP France, declared the cards under CN 29. GEFCO lodged an objection before the heading 8473 30 10, which was different Tribunal d'instance de Metz, producing from that declared in Italy when they were inter alia a declaration issued on exported (CN 8473 30 90) and more 21 December 2000 by the Italian customs advantageous for calculating the relief authorities — as a result of an application provided for under the outward processing presented on 29 November 2000 by procedure. HP Italy — confirming that the CN head- ing 8473 30 90, which was incorrectly declared when the goods were exported, 'does not correspond to the description of the exported goods'. 6

27. The discrepancy between the customs headings was noticed during subsequent 6 — See the note from the Circoscrizione Doganale (District Customs Office) Milan I of 21 December 2000 (Annex 9 to examinations by the French Customs the written observations submitted by GEFCO).

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GEFCO

30. As it had doubts as to the interpretation outward processing operation was due to of Articles 145 to 151 of the Community an administrative error by the Italian auth- customs code, the Tribunal d'instance de orities, which the company had overlooked Metz submitted the following question to in good faith. the Court for a preliminary ruling under Article 234 EC:

33. In those circumstances, GEFCO claims 'Upon triangular outward processing, is an that Article 151(2) of the customs code operator prohibited, on a proper interpre- should be interpreted as permitting the tation of Articles 145 to 151 of the blameless operator to deduct from the Community customs code, from deducting, amount of duty owed on the compensating on release of compensating products for products the amount of duty that would be free circulation, the amount of the import applicable to the temporary export goods duties which would be applicable to the on the basis of the customs heading cor- temporary export goods in accordance with responding to their real nature, even if it is their correct tariff heading where their different from that declared when they tariff heading declared on their exportation were exported. was different because it was incorrect?'

establish with certainty that the compensat- 39. In the opinion of the French Govern- ing goods are the result of the processing of ment, it flows in particular from the temporary export goods. Articles 65(1) and 87(2) of the code that an operator intending to obtain such an amendment has a duty to apply promptly to the customs authorities and to furnish them with proof of the need to change the heading. Otherwise, the customs adminis- tration would not be able to verify the 36. Finally, GEFCO contends that to fol- nature of the goods for which a particular low the contrary stance adopted by the customs procedure had been granted. French tax administration would be to impose a penalty that was patently dispro- portionate to the seriousness of the infringement of« the customs rules, need- lessly jeopardising achievement of the objective of the customs procedure with economic impact in question. 40. Furthermore, the French Government continues, nor did GEFCO make prompt use of the further possibility of amending the customs declaration envisaged by Article 78 of the code, so that the applicant can no longer rely on the inaccuracy of the 37. The French Government, for its part, said declaration before the national court. maintains that partial relief from import duties should be based, as a matter of principle, on the declaration of temporary exportation.

42. In principle, the Portuguese Govern- ment shares the analysis made by the French Government and submits that a unilateral amendment of the tariff classifi- cation of the temporary export goods is not 45. In the present case, the Commission permissible. observes, although the authorisation bore an incorrect customs heading, for the pre- cise determination of the nature of the goods it referred to a detailed annexed description, from the wording of which it seems possible to deduce that it also 43. In the opinion of the Portuguese Gov- covered the goods actually exported. ernment, however, a different solution would have to be adopted if the conditions set out in Article 220(2) of the code applied. In particular, under a triangular processing arrangement, the customs office at the place of importation of the com- pensating goods should take account of the 46. However, the Commission continues, correct customs heading of the goods if the even if that were so, it would still have to incorrect classification was the result of an be established whether the discovered non- error on the part of the customs authorities compliance with the provisions on the at the place of exportation that could not outward processing procedure — in the reasonably have been detected by the present case the incorrect customs declar- operator, provided that the latter had ation — had an effect on the correct oper- complied with all the provisions applicable ation of the procedure, since under to the customs declaration. In any event, Article 150(2) it is only in that situation the Portuguese Government concludes, it is that such non-compliance could attract a for the national court to establish whether penalty. those conditions are fulfilled in the present case.

50. The Commission therefore concludes that, if the temporary export goods have been declared under an incorrect customs heading, it is for the person liable for payment of the customs debt to prove that 48. Even if such amendment were not the false declaration did not have any real made, the Commission continues, it would effect on the correct operation of the none the less be possible for the party outward processing procedure. If that concerned to furnish the court with proof proof is provided and, in particular, if of the true nature of the temporary export post-clearance customs examination estab- goods and of the fact that the compensating lishes with certainty the exact tariff heading goods genuinely resulted from the process- of the temporary export goods, the debtor ing of those goods. In that case, however, it is authorised to deduct, upon release of the would obviously be necessary to adduce compensating goods for free circulation, proof — such as post-clearance examin- the amount of import duties that would be ation by the customs authorities or an applicable to the temporary export goods expert opinion — that with absolute cer- on the basis of their correct customs head- tainty could contradict the content of the ing. customs document, in other words attest unequivocally that the incorrect declaration as to the nature of the temporary export goods did not compromise the operation of the customs procedure in question.

Assessment

49. In the present case, as the Commission 51. In assessing the positions involved, I stated at the hearing, those conditions are must first observe that I do not think that, fulfilled, since the nature of the exported for the purpose of resolving the question at goods and the identity of the goods before issue here, it is useful to make reference to and after processing can easily be verified Article 220(2) of the code, which is raised from the detailed description annexed to by the Portuguese Government. I - 11558

55. Hence, in the present case it cannot be - considered that the further condition set out in Article 220(2) was satisfied either. 53. Although feasible in abstract terms, I do not think it useful to go down that road in the present case. It is true that French customs first set the amount of duty on the compensating goods at a given level in the light of the customs heading declared by GEFCO at the time of importation but subsequently recalculated it, increasing it 56. Moving on to the crux of the debate under Article 220(1) on the basis of the between the parties, I note first of all that different customs heading that had been none of the parties disputes that, in the declared upon exportation. However, the present case, the conditions of the outward error that led to subsequent entry of the processing procedure were infringed, duty in the accounts was due to neither the because it is established fact that at the French nor the Italian customs authorities time of exportation an incorrect declar- but essentially to the inexperience of the ation was furnished and that the customs exporter, HP Italy, which used the wrong authorities were not notified of the error. customs heading in its own export declar- ations. 7In my opinion, the first of the conditions set out in Article 220(2) that prevent subsequent entry in the accounts is not fulfilled.

57. By the same token, no one disputes that under Article 150(2) of the code infringe- ment of the conditions to which the cus- 54. Nor can it be claimed that the above- toms procedure in question is subject does mentioned error 'could not reasonably have not necessarily lead to an increase in the rate of duty if it has been proven that it did not have a significant effect on the oper- 7 — See Annexes 7 and 8 produced in court by GEFCO. ation of the procedure.

61. In that judgment the Court had been asked to rule on the case of an operator 59. The French Government appears to who at the time of importing certain goods consider amendment of the customs docu- had erroneously declared a value higher ment to be essential, because there would than the real value. When it became aware be a kind of absolute presumption of its of the error, it had applied for reimburse- authenticity, so that it would not be poss- ment of the part of the duty that was not ible to prove otherwise that the compensat- owed; reimbursement had been granted, ing goods were actually obtained by pro- but the decision had then been rescinded. In cessing the temporary export goods. its judgment, the Court did not consider it GEFCO and the Commission, by contrast, necessary to provide a reply as to the maintain that, even in the absence of principle of whether the customs auth- formal amendment of the customs declar- orities were required to amend the customs ation, the party involved could equally well declaration in accordance with Article 78, furnish proof by other means. and on what conditions. It simply noted that the customs authorities had initially granted the application for reimbursement and that, as they 'could not [have done so] without... having reviewed the customs declarations in the light of the new infor- mation submitted..., it must be held that those authorities agreed to undertake the revision of the declarations and, following that revision and in the light of its results, 60. For my part, I must first observe that, if adopted the decisions necessary to "regu- the opposing positions of principle are larise the situation" within the meaning of disregarded, it may perhaps be possible to Article 78(3) of the Customs Code, taking answer the question raised in the present account of the fact that the declarations case in a way that can be reconciled with were incomplete as a result of an inadver- both positions without necessarily having tent error by the declarant' (paragraph 23). to choose one camp or the other. I consider, in fact, that in the specific case with which we are dealing a solution might be found by 8 — Judgment in Case C-379/00 Overland Footwear v Com- drawing directly on Article 78 of the code, missioners of Customs and Excise [2002] ECR I-11133.

67. I consider that the present case repre- sents precisely one of these exceptional 64. That having been said, I do not think it instances, given that the Italian customs necessary to dwell on the question of authorities themselves confirmed that the principle, which, as we have seen (in customs heading under which the goods points 58 and 59), deeply divides the had been declared and their exportation parties, not least because in my mind the authorised was incorrect. code does not offer much scope for a clear and definitive reply. In this regard I shall merely express my puzzlement at a solution that would preclude, once and for all, the possibility of providing alternative proof in the cases contemplated, because to me such 68. It is obviously for the national court to a solution seems difficult to reconcile with assess the facts and establish whether the objectives of the system and with a fair GEFCO has or has not provided the proof and reasonable assessment of that system. in question. Here I shall merely observe

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