Report for the Hearing Case C-250/91
I — Facts and procedure
1. In 1986 Hewlett Packard France (hereinafter HP France), a subsidiary of the American Hewlett Packard group, imported computer keyboards from Singapore having a total value of USD 4090000 or FF 28630000.
2. Relying on binding tariff information issued on 23 January 1985 to the German subsidiary of Hewlett Packard for a period of six years by the Oberfinanzdirektion München (Regional Finance Office, Munich), Hewlett Packard France declared those goods for release into free circulation in France under tariff heading 85.55 C, parts for computers.
3. Customs duties were at that time suspended in respect of that tariff heading pursuant to Annex II to Council Regulation (EEC) No 3599/85 of 17 December 1985 applying general tariff preferences for 1986 in respect of certain industrial products originating in developing countries (OJ 1985 L 352, p. 1).
4. On the basis of a verification following a declaration of release for free circulation, the Direction Nationale des Renseignements et des Enquêtes Douanières (National Office for Customs Information and Investigations, (DNRED)), by notice of 24 May 1989, informed Hewlett Packard France that it had infringed the customs regulations by wrongly declaring goods subject to the tariff. According to the French customs administration, the computer keyboards imported in 1986 were computer units falling within tariff heading 84.53 B and were therefore subject to customs duty at the rate of 4.9%, giving an amount due of FF 1402870, plus FF 260933 value added tax (at the rate of 18.6%).
5. By letters of 21 February and 26 June 1990, Hewlett Packard France asked the French customs authorities to waive any penalty and forward the file to the Commission of the European Communities with a view to obtaining a non-recovery decision pursuant to Article 5(2) of Regulation No 1687/79.
6. The French customs administration did not respond and therefore Hewlett Packard France commenced proceedings before the Tribunal d'Instance of the Seventh Arrondissement, Paris, for annulment of the implied decision rejecting its request for non-recovery and for a declaration that it had properly requested non-recovery after clearance of the duties at issue pursuant to Article 5(2) of Regulation No 1697/79 or, in the alternative, Article 13 of Regulation No 1430/79.
7. The two provisions relied on by Hewlett Packard France are worded as follows:
8. By judgment of 24 September 1991, amended by judgment of 22 October 1991, received at the Court of Justice on 7 and 30 October 1991 respectively, the Tribunal d'Instance of the Seventh Arrondissement, Paris, stayed the proceedings and referred the following question to the Court for a preliminary ruling:
9. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged:
10. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided, pursuant to Article 95(1) of the Rules of Procedure, to assign the case to the Third Chamber and to open the oral procedure without any preparatory inquiry.
II — Summary of the written observations
1. The jurisdiction of the Court
11. Considering that the request from the national court concerns the application of Community law to a specific case, the Commission points out that, in its judgment in Case 28/70 Witt [1970] ECR 1021, the Court held that, within the scope of its powers under Article 177, it may not apply the Treaty to a specific case. In view of the information provided by the national court, it is not even possible, as the Court has done in a number of similar cases, to isolate from the wording of the question the matters relating to the interpretation of Community law. In the Commission's view, the Court has no alternative but to deal with the question solely within the limits of its jurisdiction under Article 1 77 of the Treaty.
2. The application of Regulation No 1697/79
12. (a). Hewlett Packard France claims that the conditions for the application of Article 5(2) of Regulation No 1697/79, as clarified by the case-law of the Court, are fulfilled in the present case.
13. It observes, in that regard, that the competent authorities committed two successive errors, and its claim would be justified even if there had been only one.
14. The first error lies in the tariff notice wrongly issued by the Munich revenue office. Notwithstanding the fact that that notice was sent to its German sister company, Hewlett Packard GmbH, HP-France considers that it too was entitled to rely on the notice. It states that, at the material time, Germany was the only Member State of the Community to provide binding tariff information, the effectiveness of which was guaranteed until a specified date, in this case 23 January 1991, subject to any later decision. According to HP-France, it would have been illogical to declare the German customs authorities competent to define a customs heading applicable in Germany and then to treat them as having no powers in respect of the same decision because it was implemented in France: the issue is exactly the same, involving application of the same provisions in respect of companies carrying out the same import operations. Consequently, HP-France in fact applied the tariff notice first to its intra-Community imports during the period in which it purchased the computer keyboards from its German sister company and subsequently for its direct imports of computer keyboards from Singapore. In those circumstances, it considers that it properly entertained legitimate expectations regarding the notice in question, in the knowledge that if there was to be any amendment it would certainly be notified of that fact through its German sister company, where its European Customs Manager was based. If it were claimed that the binding tariff information should have been effective only for transactions in Germany and not those in France, even though the goods were the same and of the same origin, and of course subject to the same legal provisions, namely the common customs tariff, the result would clearly be discrimination directly conflicting with the objectives of the Treaty, as set out in particular in the preamble to Council Regulation (EEC) No 1715/90 of 20 June 1990 on the information provided by the customs authorities of the Member States concerning the classification of goods in the customs nomenclature (OJ 1990 L 160, p. 1).
15. The second error, committed by the French customs administration, was, in HP-France's view, the fact that the latter did not raise any query regarding the word keyboard and the tariff reference 84.55 appearing on the simplified import declarations, which should have alerted the competent French customs authority if that heading was incorrect. That applies a fortiori if account is taken of the volume and number of the transactions and the period over which they were carried out.
16. According to HP-France, those errors could not have been reasonably detected by it, as required for the application of Article 5(2) of Regulation No 1697/79. In that connection, it refers first to the binding nature of the tariff information given to its German sister company, as a result of which the notice was entirely reliable, even for the purposes of the French company, so that the error inherent in it was not in practice identifiable. It then states that determination of the tariff heading for the goods in question was such a delicate matter that the error could not be detected even by a particularly diligent trader. Above all, it was not possible to determine the tariff classification merely by reading the customs tariff. HP-France points out that the classification of computer keyboards has given rise to differences of opinion between the various Member States and that ultimately an internal procedure was required in order to define their definitive tariff heading, and even that was entirely arbitrary since, for example, computer mice, which, like keyboards, are used to give commands to the computer, were classified under a different heading from that of keyboards.
17. HP-France also considers that it acted in good faith. It had no interest in declaring under heading 85.55 goods which in reality fell within heading 84.53, since even if it had declared the goods under the latter heading there would have been no duty payable. Indeed, notwithstanding possible excedence of the tariff ceiling, customs duties were reintroduced only where there was a specific Community regulation to that effect. When such a regulation was adopted, namely in May 1987, the transactions in question had long been completed and therefore benefited from the suspension of duty. HP-France considers that it would not have had an interest in making such a declaration even if the additional volume of imports under heading 84.53 had prompted the Commission to adopt at an earlier stage the regulation which was not in fact adopted until May 1987. In such circumstances, it would have been able to pass on to its customers the difference in duty, which was very low having regard to the value of the complete personal computers marketed by it, and its competitors would have been subject to the same increase in customs charges. In general terms, it states that the Hewlett Packard Group has always observed very strict rules in the conduct of its operations and, specifically, favoured observance of the rule whereby it was not possible to declare in France, under heading 84.53, goods which were known to have been classified by the German customs authorities as falling within heading 84.55. Finally, it states that the French customs authorities themselves formally acknowledged that it had acted in good faith.
18. Finally, HP-France claims that it observed all the provisions laid down in the rules in force as far as [its] customs declaration is concerned, a fact not disputed at any time.
19. In conclusion, HP-France contends that, in the light of the Judgment of the Court in Case 314/85 Foto-Frost [1987] ECR 4199, the proper course is for post-clearance recovery not to be undertaken, since the three conditions for the application of Article 5(2) of Regulation No 1697/79 are fulfilled.
20. (b). The French Government considers that the first condition for the application of Article 5(2) of Regulation No 1697/79, namely an error made by the competent authorities themselves, is not fulfilled. It maintains that the incorrect classification of the goods under heading 84.55 was brought about by a declaration from HP-France itself, based on a decision from the Munich Revenue Office. The error was certainly not committed by the competent authorities themselves, they being, in the present case, as far as the collection of customs duty is concerned, the Grenoble customs office. If HP-France had had any doubts as to the proper classification, it should have contacted that office, which it did not do.
21. The French Government also considers that the classification error could reasonably have been detected, within the meaning of Article 5(2) of Regulation No 1697/79, by HP-France and that the second condition for entitlement to waiver of post-clearance recovery of customs duties under Article 5(2) of that Regulation is likewise not fulfilled.
22. It states that a trader's good faith is in part linked, according to the case-law of the Court, with the facilities available to it to detect such an error. In the present case, the business competence of HP-France is attested by the existence of an agreement for a simplified customs clearance procedure for exports and imports at the company's premises, under the Order of the Minister of the Economy and Finance of 11 June 1971 introducing a simplified customs clearance procedure for exports and imports at traders' premises (JORF of 17 June 1971), concluded between the undertaking and the Principal Customs Office at Grenoble. Such a procedure is made available by the customs administration only to competent and experienced traders who frequently carry out large import and export transactions and whose organizational structure is such that they can undertake the procedures traditionally carried out by the appropriate customs office. The existence of a simplified clearance agreement of that kind also accounts for the fact that, in view of the moral and financial guarantees given by the company concerned, very few checks are carried out on the goods, which no longer pass through the customs office, and objections are made by the customs authorities only in respect of post-clearance documentary checks relating to the goods as a whole.
23. According to the French Government, HP-France was not entitled in any event to ignore Commission Regulation No 3631/85 of 23 December 1985 amending the nomenclature of goods for the external trade statistics of the Community and statistics of trade between Member States (NIMEXE) (OJ 1985 L 353), which was in force at the material time. It is apparent from that regulation that computer keyboards, wrapped separately or put up individually, such as those imported by HP-France, do indeed fall within heading 84.53 and not heading 84.55, which covers spare parts and accessories intended for machines and apparatus under headings Nos 84.51 to 84.54, namely, inter alia, automatic data-processing equipment, comprising either central units or keyboards. In those circumstances, HP-France cannot, in the French Government's view, rely on classification details given by a national authority which was not the competent authority.
24. In conclusion, the French Government suggests the following answer to the question submitted:
25. (c). The Commission considers that, even if the possibility might be considered of an error on the part of the competent authorities themselves, in any event both the second condition regarding detectable errors and the third condition regarding observance of the applicable provisions must be fulfilled before Article 5(2) of Regulation No 1697/79 can be applied.
26. As regards the error by the competent authorities themselves, the Commission, referring to the judgment in Case C-348/89 Mecanarte [1991] ECR I-3277, concedes that in principle even the first error committed by the German authorities may be taken into account in non-recovery proceedings commenced in France, provided that that error is imputable to the competent authorities and gave rise to the initial non-recovery of the duty. According to the Commission, that condition is not, however, fulfilled in the present case because the error by the German authorities was committed in relation not to HP-France but to its German sister company. Consequently, the German authorities cannot be regarded as having provided information relevant to the recovery of customs duties causing the applicant to entertain legitimate expectations within the meaning of the Mecanarte Judgment. As regards the second error, namely the fact that the French customs office made no objection regarding the classification of the keyboards, even though a comparison of the goods declared and the specific commercial designation of the goods would have disclosed a contradiction, the Commission considers that only the national court is in a position, on the basis of the criteria expounded by the Court of Justice in Foto-Frost, to decide, on the basis of HP-France's statements and the manner in which the primary checks were carried out, whether the French customs office committed an error within the meaning of Article 5(2) of Regulation No 1697/79.
27. As regards the second condition, namely the possibility of detecting the error, the Commission considers that HP-France did not display all the diligence required of a trader with experience of clearing a particular type of product through customs, even though it concedes that the tariff classification was not clear as a result of the differences of opinion existing at that time between the Member States. Without wishing to call in question HP-France's good faith, the Commission nevertheless observes that HP-France should have known that a tariff notice protects only its addressee, namely Hewlett Packard GmbH, and that it could not be relied upon as against another Member State. HP-France could at least have had the notice confirmed by the French authorities or should simply have followed the classification notice procedure existing in France, the country of importation.
28. As regards, finally, the third condition, concerning observance of all the provisions laid down by the rules in force regarding the customs declaration, the Commission considers that in the present case there was no tariff classification and such a classification is needed for the declaration of release for free circulation and could have been obtained under the French procedure for obtaining classification opinions.
3. The application of Regulation No 1430/79
29. (a). HP-France considers it particularly unfair that its reliance on the positions taken by the German and French customs authorities regarding a delicate and specific tariff problem means that it has to pay additional duties, which in any event it would not have had to pay at the material time.
30. It is because of the particular importance of its good faith in that regard that HP-France refers not only to Regulation No 1697/79 but also to the fairness provisions contained in Article 13 of Regulation No 1430/79.
31. (b). The French Government considers that the present case does not come within the scope of Regulation No 1430/79. By contrast with Regulation No 1697/79, which applies to cases where duty should have been, but was not, charged on goods, that is to say in cases similar to this one, Regulation No 1430/79 covers the opposite case, where the authorities repay or remit import or export duties where the customs duties were improperly levied or incorrectly calculated.
32. (c). The Commission maintains, on the other hand, that HP-France could have simultaneously lodged a request for waiver of post-clearance recovery of customs duties based on Article 5(2) of Regulation No 1697/79 and an application for remission of the same duty, entered in the account but not paid, on the basis of Article 13(1) of Regulation No 1430/79.
33. However, the Commission considers that the documents from the national court show that although HP-France applied for non-recovery on the basis of Article 5(2) of Regulation No 1697/79, no application for remission appears to have been submitted to the customs authorities. It states that, according to Article 13(2) of Regulation No 1430/79, the application must be lodged within a period of twelve months after the entry in the account of the import duties by the authority responsible for collection. The date on which the duty is entered in the account is the date of the administrative measure duly establishing the amount of duty to be collected by the competent authorities. Since in the present case the amount due was notified by a document of 24 May 1989, HP-France had, according to the Commission, until 25 May 1990 to lodge with the customs authorities an application for remission based on Article 13 of Regulation No 1430/79. In the absence of such an application, the Commission queries the admissibility of the preliminary question regarding the applicability of Article 13 of Regulation No 1430/79.
34. Considering, however, that the merits of the question should be examined, the Commission observes that the error by the competent authorities referred to in Article 5(2) of Regulation No 1697/79 on post-clearance recovery may constitute a special situation within the meaning of Article 13 of Regulation No 1430/79. In its opinion, the fact that the error was detectable and that a wellinformed trader failed to show due diligence more or less amount to obvious negligence within the meaning of Article 13. Consequently, according to the Commission, the conditions laid down in Article 5(2) of Regulation No 1697/79 must be applied in the same way as those laid down in Article 13 of Regulation No 1430/79. It considers therefore that, for the same reasons as those which preclude its claiming the right to non-recovery of import duties on the basis of Article 5(2) of Regulation No 1697/79, HP France is likewise not entitled to the remission of import duty on the basis of Article 13 of Regulation No 1430/79.
1 Language of the case: French.