Report for the Hearing delivered in Case 161/88
I — Facts and procedure
1. Facts and legislative background
Between 30 January and 5 March 1983 the plaintiff in the main proceedings, Friedrich Binder GmbH & Co. KG (hereinafter referred to as Binder) imported into the Community 12 consignments of frozen morello cherries, originating in and coming from Yugoslavia, and applied to the Hauptzollamt (Principal Customs Office) Bad Reichenhall to have them cleared for entry into free circulation.
On each occasion, the Hauptzollamt classified the cherries under code number 0810 900 40, given in the customs declaration, and charged duty at the rate of 10.4% shown in the 1983 Deutscher Gebrauchszolltarif (German customs tariff manual) drawn up by the German authorities and applicable from 1 January 1983.
That rate was the same as that which appeared in a proposal for a regulation presented by the Commission to the Council on 16 July 1982 (Document 8770/82), providing for a reduction of customs duties applicable to imports into the Community of certain agricultural products originating in and coming from Yugoslavia, and had been incorporated by the German authorities in their 1983 Gebrauchszolltarif before the Council had reached a decision on the proposal.
That proposal would have reduced the preferential rate levied on imports of morello cherries of the category in question under Article 8 of the Interim Agreement between the European Economic Community and the Socialist Federal Republic of Yugoslavia on trade and trade cooperation (Council Regulation (EEC) No 1272/80 of 22 May 1980, Official Journal 1980, L 130, p. 1) from 13% to 10.4%. However, the Council did not adopt the proposal.
On 9 March 1983, therefore, the Federal Finance Ministry issued an order amending the Gebrauchszolltarif.
In June 1983, the Hauptzollamt asked Binder, together with other importers also involved, to pay a total of DM 22917.83 representing the balance due at the correct rate of duty, under Article 2 of Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of impon duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties (Official Journal 1979, L 197, P.1 DBinder submitted an objection to the post-clearance recovery, its share of the liability for which was DM 7992.39, on the grounds that it had relied on the information in the Gebraucbszolltarif, that it had based its price calculations on a 10.4% rate of duty and was unable to pass the duty charged post-
clearance on to its customers, and that it could not be expected to be better acquainted with the customs duties in force than the competent customs authorities themselves.
Since the amount of the duty involved was greater than ECU 2000, the Federal Republic of Germany requested the Commission, by a letter of 13 June 1985 communicated to the Commission on 5 July 1985 in accordance with Article 5(2) of Council Regulation (EEC) No 1697/79 and Commission Regulation (EEC) No 1573/80 of 20 June 1980 laying down provisions for the implementation of Article 5(2) of Council Regulation (EEC) No 1697/79 (Official Journal 1980, L 161, p. 1), to decide whether, in the present case, there was justification for waiving post-clearance recovery of the import duties.
The version of Article 5(2) in force at the material time has the following wording:
It must be read in conjunction with the first paragraph of Article 4 of Regulation (EEC) No 1573/80, which provides that:
and the first paragraph of Article 6 of that regulation, which provides:
By a decision of 5 November 1985, the Commission replied to the German authorities' request in the negative and instructed them to take action for the post-clearance recovery of the customs duties amounting to DM 22917.83 to which the German request referred. It considered that the conditions which would have made it possible to refrain from taking action for post-clearance recovery under Article 5(2) of Regulation (EEC) No 1697/79 were not fulfilled because the person liable could reasonably have detected the error made by the authorities. The appropriate rate of duty— 13%— could be found in Council Regulation (EEC) No 1272/80, published in the Official Journal of the European Communities, which had been in force since 30 May 1980, so that the importer was in a position to determine the applicable rate and to ascertain without difficulty that the rate shown in the Gebrauchszolltarif was incorrect.
The Hauptzollamt then dismissed Binder's objection by a decision of 27 January 1986.
Binder appealed to the Finanzgericht (Finance Court) Munich against the Hauptzollamt's decision to take action for post-clearance recovery, on the same grounds as those adduced in support of its objection, and on the ground of the principle of protection of legitimate expectations, which, in its view, renders the Commission's decision invalid.
2. The question submitted to the Court
The national court considered that the dispute concerned the validity of an act of an institution of the Community and decided, by an order of 31 May 1988, to stay the proceedings and to refer the following question to the Court for a preliminary ruling:
In its statement of the grounds for its order, the Finanzgericht points out that the Hauptzollamt shares Binder's view that the grounds set out by the Commission ignore economic reality and are exaggerated.
The Finanzgericht expresses serious doubt as to the validity of the Commission's decision of 5 November 1985 and points out in that connection that:
The national court also remarks that all interested parties, including customs agents, follow the competent customs authorities in relying exclusively on the Gebrauchszolltarif which might be thought to be particularly dependable since it is published by the Federal Finance Ministry, which takes part in the drawing up of the Community's tariff regulations.
The Finanzgericht also emphasizes that, in addition to the cost and low circulation of the Official Journal of the European Communities, it is not always possible, even for subscribers to the publication, to ascertain the correct customs duty without difficulty, since it is the practice of the legislative authority to make tariff regulations which are published in January and February retroactive to 1 January of the relevant year.
Finally, it adds that a proposal presented by the Commission may generally be expected to be adopted by the Council.
The Finanzgericht concludes that the Federal Finance Ministry thus aroused particular expectations on the part of the importers of the goods at issue to which the Commission in its decision of 5 November did not give consideration; importers were entitled to assume that the Federal Finance Ministry, which takes part in the drawing up of the Community rules, had information justifying the assumption that the proposal to reduce the rate of duty applicable as from 1 January 1983 would be adopted, and could thus base their price calculations on the 10.4% rate shown as from 1 January 1983 in the Gebrauchszolltarif
3. Procedure
The order of the Finanzgericht was received at the Court Registry on 3 June 1988.
Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice, written observations were submitted on 24 August 1988 by the Commission of the European Communities, represented by Jörn Sack, its Legal Adviser.
Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry and to assign the case to the First Chamber.
II — Summary of the written observations submitted to the Court
No written observations have been submitted to the Court by either the plaintiff in the main proceedings, Binder, or the defendant, the Hauptzollamt Bad Reichenhall.
The Commission states that the only relevant question is whether it was possible for Binder to detect the inaccuracy of the information provided in the Gebrauchszolltarif, since the other requirements laid down in Article 5(2) of Regulation (EEC) No 1697/79 were manifestly fulfilled.
It makes the general point that the key to the understanding of the provision is to be obtained from an analysis of the conflict of interests which Regulation (EEC) No 1697/79 is intended to resolve in a fair and reasonable manner, those interests being the upholding, as far as possible, of the principle of the legality of administrative action which ensures equal treatment for citizens and, on the other hand, provision for derogations from that principle in certain situations in which, by reason of certain legitimate expectations, an individual's interest in having an administrative measure, unlawful in itself, upheld must override the collective interest in the observance of the rules of law applicable to all.
Before those two interests are weighed up, the relative importance and weight to be given to the interests of the individual and those of the Community must be assessed.
In that connection, the Commission criticizes Binder and the German authorities for taking a very narrow view in describing its legal viewpoint as ignoring economic reality. Faced with the fact that national authorities apply provision of Community law in the same manner as comparable provision of national law which they have replaced and the risk that this may give rise to different and incorrect applications of Community law, the Commission must prevent such occurrences.
In the present case, the parties did not take sufficient account of the fact that the Gebrauchszolltarif is not an authoritative statutory text but a compendium of the customs duties in force which serves only as a guide, as is indeed expressly pointed out in the introductions to a number of national tariff manuals, including the German one.
Traders are always at liberty to take decisions on the basis of such a declaratory text alone, but in so doing they must also run the concomitant risk of finding that there is a discrepancy between the declaratory text and the actual provisions of positive law, namely, in this case, the Common Customs Tariff.
Since Binder deliberately ran that risk, the Commission considers that there seems a priori to be no overriding reason for protecting its legitimate expectations and allowing its interest in such protection to prevail over the collective interest in adherence to legality by the administrative authorities. If Binder had been really intent on ensuring absolute certainty in its commercial transactions, it could have consulted the relevant provisions of Community law in the Official Journal of the European Communities, a mere reading of which would have disclosed the error of the customs authorities.
With regard to the interest of the Community itself, the Commission submits that to accept the point of view of the parties to the main proceedings would call in question the direct validity and uniform application of the Common Customs Tariff. It would amount to conferring on a purely declaratory national tariff manual, through the protection of legitimate expectations, precedence over the directly applicable Community customs rules in force and favouring importers in one Member State over those in other Member States, which would constitute unacceptable discrimination within the customs union. This should be borne in mind when interpreting Article 5(2) of Regulation (EEC) No 1697/79.
The Commission considers that the Court's previous decisions confirm its view regarding the interpretation of that article.
In that connexion, it refers to the judgment of 13 November 1984 in Joined Cases 98 and 230/83 Van Gend 6c Loos NV v Commission [1984] ECR 3763, in which the Court laid down a relatively strict criterion for the protection of legitimate expectations in connection with false or falsified certificates or origin when it ruled that the belated discovery that a certificate of origin was invalid was one of the professional risks run by customs agents.
It stresses that the fact that the decision contested in that case related to Article 13 of Council Regulation (EEC) No 1430/79 of 2 July 1979 on the repayment or remission of import or export duties (Official Journal 1979, L 175, p. 1) and not Article 5(2) of Regulation (EEC) No 1697/79 is immaterial since both provisions govern similar factual situations. Whether the Commission is called upon to reach a decision under one provision or the other is often determined by procedural contingencies.
As regard the need to ensure that Community law is applied simultaneously and uniformly throughout the Community, the Commission refers to the judgments in Case 98/78 Racke v Hauptzollamt Mainz [1979] ECR 69 and Case 99/78 Decker v Hauptzollamt Landau [1979] ECR 101 and concludes from them that, where legislation enters into force on the date of its publication in the Official Journal, traders must if need be inquire at source in Luxembourg if they wish to be absolutely certain about the content and applicability of a provision, which means that an importer should not be able to rely, in the name of the protection of legitimate expectations, on arguments to the effect that he does not normally have the Official Journal, or that it is not available in the customs office's district, or that it is difficult to read.
From its considerations, the Commission concludes that it took the right decision under Article 5(2) of Regulation (EEC) No 1697/79 when in the present case it took account of the fact that the error in the Gebrauchszolltarif could readily have been detected by Binder by consulting the Official Journal of the European Communities, which is the sole valid source of law.
It therefore proposes that the national court's question should be answered as follows :
HI — Answers to question put by the Court
In the Commission's view, Article 5 of Regulation (EEC) No 1697/79 is normally applicable when a Member State has not yet issued a formal decision for post-clearance recovery and does not intend to do so. It adds, however, that:
The Commission also points out that because of the problems of delimitation as between the procedures and because of the more restrictive wording of Article 5 of Regulation (EEC) No 1697/79, it has decided, in all cases submitted to it pursuant to that provision, to check whether a remission under Article 13 of Regulation (EEC) No 1430/79 might be envisaged and, if so, then to ask the Member State to widen the scope of its application on the basis of the principle dolo petit qui petit quod statini redditurmn est.
1 Language of the case: German.
2 Judgc-Rapportcur's noie the adverb reasonably, which appears in the French and English versions, docs noi appear in lhe German text