Opinion of Mr Advocate General Van Gerven delivered on 6 December 1988

1 Original language Duich.

2 Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of impon duties or expon duties which have been not required of the person liable for payment on goods entered for a customs procedure involving the obligation to pav such duties (Oj 1979. 1 197, p 1)

3 Council Directive 69/73/EEC of 4 March 1969 on the harmonization of provisions laid down by law, regulation or administrative action in respect of inward processing (OJ, English Special Edition 1969, I, p 65)

4 Commission Directive 75/349/EEC of 26 May 1975 on detailed rules concerning equivalent compensation and prior exponation under inward processing arrangements (OJ 1975; L 156, p 25)

5 Article 2 (1) of Council Regulation No 1697/79 provides as follows: Where the competent authorities find that all or pan of the amount of impon duties or expon duties legally due on goods entered for a customs procedure involving the obligation to pay such duties has not been required of the person liable for payment, they shall take action to recover the duties not collected However, such action mav not be taken after the expiry of a period of three vcars from the date of entry in the accounts of the amount originally required of the person liable for payment or, where there is no entry in the accounts, from the date on which the customs debt relating to the said goods was incurred.

6 The United Kingdom contends that the advantage in fact sought by Rank Hovis originated in a growing disparity between, on the one hand, import duties levied on common wheat which tended to increase in the spring of 1981 and, on the other, export refunds on flour whicn were falling over the same period According to the United Kingdom, Rank Hovis sought refuge in operations involving equivalent compensation in order to limit the loss of revenue that threatened to result from that trend, and the avoidance of monetary compensatory amounts was only a secondary consideration. I do not propose to deal with this advantage in my analysis since neither of the parties has alleged it to be unjustified

7 See the Commission's letters of 12 July 1984 addressed to the Permanent Representations of France and the United Kingdom.

8 Written reply of 27 April 1988 to the Court's question of 2 March 1988.

9 See the Commission's application, pp. 5 and 9.

10 The existing rules, the United Kingdom points out, do provide for that possibility, particularly in Article 37 of Regulation No 3677/86 (supra, paragraph 5).

11 With reference to the Court's judgment of 9 July 1981 in Case 169/80 Gondrand fiérei [1981] ECR 1931.

12 That provision docs not rule out the possibility of engaging in triangular traffic as such for a company established in two different Member Slates; however, Article 11(2) of that directive also provides that the competent authorities may prescribe in the authorization that the export and impon transactions must be carried out at tne same customs office.

13 The French text reads. ce hen pourrait se réaliser

14 The Commission stated at the hearing that it was possible that byintroducing the possibility of granting triangular traffic authorizations to entities with such a degree of transparency it had paved the way for possible abuses. See the transcript of the hearing, French version, pp. 33 to 35.

15 To the extent to which there was one. As stated above (paragraph 7), at the time of the grant of the authorization no monetary compensatory amounts were applicable on transactions involving exports from and imports into the French Republic.

16 Judgment of 22 October 1987 in Case 314/85 Foto-Frost v Heiiptiollaml Ltibeck-Oit [1987] ECR 4199