EU-domstolen

JUDGMENT OF 24. 4. 1980 — CASE 65/69 PROCUREUR DE LA RÉPUBLIQUE ν CHATAIN

CELEX: 61979CJ0065
Typ: EU-domstolen

In Case 65/79 REFERENCE to the Court of Justice under Article 177 of the EEC Treaty by the Examining Magistrate at the Tribunal de Grande Instance [Regional Court], Nanterre, for a preliminary ruling in the proceedings pending before that court between

THE COURT, composed of: H. Kutscher, President, A. O'Keeffe and A. Touffait (Presidents of Chambers), J. Mertens de Wilmars, P. Pescatore, Lord Mackenzie Stuart, G. Bosco, T. Koopmans and O. Due, Judges, Advocate General: F. Capotorti Registrar: A. Van Houtte

gives the following

JUDGMENT

Facts and Issues

I — Facts and procedure

Question 1:

Question 2:

Question 3:

Question 4:

Question 5:

Question 6:

Question 7:

Question 8:

Question 9:

Question 10:

Question 11:

II — Written observations submitted under Article 20 of the Protocol on the Statute of the Court of Justice of the EEC

Observations of Mr Chatain, the accused in the main proceedings

A—) General

1. The facts

2. Background of the Sandoz group

3. Basis of the relationship between Sandoz-Switzerland and Sandoz-France

B — Consideration of the points of law raised in the questions submitted by the Examining Magistrate

1. Principal question: The reduction of the price agreed upon and actually paid is incompatible with Community law and with the agreement between the EEC and Switzerland

(a) Incompatibility of the reduction with Community law

1. Illegality of the practice of reducing the value in principle (Question 1 and supplementary question, that is to say Question 11)

1.1. The practice of reducing the value is unlawful with regard to both the spirit of economy and the objective of the Community rules on valuation for customs purposes

1.1.1. The objective of Regulation No 803/68: fair and uniform charging of customs duties under the Common Customs Tariff

1.1.2. The Convention on the valuation of goods for customs purposes signed at Brussels on 15 December 1950, which entered into force on 28 July 1953 (hereinafter referred to as the Brussels Convention)

1.1.3. The General Agreement on Tariffs and Trade (GATT)

1.2. The text of Regulation No 803/68

1.2.1. Upward adjustments

1.2.2. Specific downward adjustments (extrinsic elements included in the price)

1.3. The use of the Community concept of value for customs purposes to serve national policies is a misuse of the law which is contrary to the Community principles governing the customs union.

1.3.1. The customs authorities are ignoring the principle of the uniformity of Community rules

1.3.2. The customs authorities are undermining the principle of certainty and simplicity in Community law

2. Illegality of the practice of making reductions as regards consequences for the importer (Question 8)

2.1. Breach of the principle of proportionality

2.2. Breach of the rules governing the customs union (EEC Treaty, Articles 12 to 29)

(b) Incompatibility of the reduction with the agreement between the EEC and Switzerland

1. Incompatibility with the free movement of goods between the EEC and Switzerland (Question 9a)

1.1. The concept of measures having an effect equivalent to quantitative restrictions

1.2. The concept in application

2. Incompatibility with the free movement of capital between the EEC and Switzerland (Question 10)

Paragraph 2: subsidiary questions

(a) The purpose of and limitations on the obligations of the party making the declaration (Questions 7 and 9b)

1. Community law

1.1. Regulation No 375/69 of the Commission of 27 June 1969 (Official Journal, English Special Edition 1969 (I), p. 63)

1.2. The case-law of the Court of Justice

2. French international law

(b) Method of calculating the normal price which constitutes the value for customs purposes, where the price actually agreed upon and paid has been subject to a reduction (Questions 2, 3, 4, 5 and 6)

1. The principle of comparison with a contract of sale relating to the same product (Question 2)

1.2. Characteristics of the reference products

1.2.1. The reference products and the principle of the theoretical norm

1.2.2. The special problem of comparing active ingredients manufactured by different producers

2. Essential characteristics of the contract of sale used as a reference

2.1. Origin and destination of the product, the subject-matter of the reference contract — location of the undertakings

2.1.1. Origin of the reference products

2.1.2. Destination of the reference product

2.2. The level at which the transaction occurs

2.3. Imitation products (Question 4 b)

A. The location of the exporter and the origin of the reference product

B. The location of the importer and the destination of the reference product

3. Determination of the value for customs purposes in the absence of any reference price (Questions 5 and 6)

3.1. Unilateral recourse by a Member State to different methods

3.2. What criteria is it legitimate to use?

3.2.1. The criterion incompatible with the Community definition: calculation on the basis of the production cost (cost plus).

3.2.2. Criteria which are compatible with the Community definition

Observations of the French Government

A — The concept of value for customs purposes within the meaning of Regulation No 803/68

B — Penalties for infringement of customs legislation

Observations of the Government of the Federal Republic of Germany

A — Questions of customs law

1. First question on the possibility of reducing the value for customs purposes

2. Second question concerning the possibility of reducing the value for customs purposes on the basis of a reference price

3. Third question concerning the criteria to be used in establishing the reference price

4. Fourth question concerning the possibility of taking into consideration as reference prices the prices in force in countries with a State trading monopoly or prices for imitation products

5. Fifth question, on whether Member States may have unilateral recourse to other methods

6. Sixth question, on the criteria to be applied in establishing the value for customs purposes in this case

7. Additional question, No 11, on downward adjustments other than those referred to in paragraphs 18 to 21 of the annex to Regulation No 375/69

8. Seventh question, on whether a Member State may penalize an importer even where he has accurately supplied the particulars required by the questionnaire used uniformly throughout the Community when the customs declaration is being made

9. Eighth question, concerning the compatibility of criminal sanctions with the principles of the customs union

10. Ninth question, on the compatibility of reducing the declared value and, in particular, of the penalty, with the Agreement between the EEC and Switzerland

B — Restrictions on the free movement of goods in order to ensure the application of restrictions on the free movement of capital (tenth question)

Written observations of the United Kingdom of Great Britain

A — Questions 1 to 6 and supplementary questions

1. First question on whether a Member State may reduce the declared value

2. Second question, on whether a Member State may compare the declared value with one or more prices charged in other contracts of sale concerning the same product

3. Third and fourth questions, on the reference prices which may be adopted by a Member State

4. Fifth and sixth questions, on the methods which the French administration may use to determine the value for customs purposes

5. Supplementary question (eleventh question) on downward adjustments in the declared value other than those listed in paragraphs 18 to 21 of the Annex to Regulation No 375/69

B — Questions 7 to 10

1. Seventh question, on whether a Member State may impose customs penalties when it appears that the importer has satisfied the Community import rules and requirements

2. Eighth question, on whether the practice of reducing the declared value is compatible with the customs union established by Articles 12 to 29 of the EEC Treaty

3. Question 9 (a) on the interpretation of Article 13 of the Agreement between the EEC and Switzerland

4. Question 9 (b) on whether a Member State may inflict heavy penalties on an importer of a Member State of the EEC who has duly fulfilled his obligations

5. Tenth question, on capital transfers

Written observations of the Commission

A — General

B — Questions 1 and 11, whether the value for customs purposes may be reduced and to what extent

1. The concept of the normal price

2. The methods which may be used in order to establish the accuracy of the price

C — Questions 2, 3 and 4, methods of reducing the value by reference to other known selling prices

D — Questions 5 and 6, the use of other methods where there is no reference price