Summary
Parties
Grounds
Decision on costs
Operative part
Keywords
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Free movement of goods - Customs duties - Charges having an equivalent effect - Charging traders the cost of transactions carried out by frontier customs offices during normal business hours as laid down by Community provisions - Not permissible
( EEC Treaty, Arts 9 and 12; Council Directive 83/643, as amended, Art . 5(1)(a ) )
Summary
To charge traders in respect of intra-Community trade the cost of inspections and administrative formalities carried out during part of the normal business hours of customs offices at frontier posts as determined by the second indent of Article 5(1)(a ) of Directive 83/643, as amended by Directive 87/53, constitutes a failure by a Member State to fulfil its obligations under Articles 9 and 12 of the Treaty . In the case of a haulier who attends at a customs office during its normal business hours there is no specific service actually and individually rendered to him for which a charge may be made, in an amount proportionate to that service, without infringing the said provisions of the Treaty .
Parties
In Case 340/87
Commission of the European Communities, represented by Guido Berardis, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of Georgios Kremlis, a member of its Legal Department, Wagner Centre,
applicant,
v
Italian Republic, represented by Professor Luigi Ferrari Bravo, Head of the Legal Department of the Ministry of Foreign Affairs, acting as Agent, assisted by Ivo Braguglia, avvocato dello Stato, with an address for service in Luxembourg at its Embassy,
defendant,
APPLICATION for a declaration that by charging traders the cost of inspections and administrative formalities carried out during part of the normal business hours of customs offices at frontier posts the Italian Republic has failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty, the provisions of the EEC regulations on the common organization of agricultural markets and the preferential agreements concluded by the Community with certain non-member countries which prohibit charges having an effect equivalent to customs duties in trade with non-member countries, and Article 5 of Council Directive 83/643/EEC of 1 December 1983 on the facilitation of physical inspections and administrative formalities in respect of the carriage of goods between Member States ( Official Journal 1983, L 359, p . 8 ) as amended by Council Directive 87/53 of 15 December 1986 ( Official Journal 1987, L 24, p . 33 ),
THE COURT
composed of O . Due, President, F . Grévisse ( President of Chamber ), G . F . Mancini, C . N . Kakouris, F . A . Schockweiler, J . C . Moitinho de Almeida and M . Díez de Velasco, judges,
Advocate General : W . Van Gerven
Registrar : D . Louterman, Principal Administrator
having regard to the Report for the Hearing and further to the hearing on 21 February 1989,
after hearing the Opinion of the Advocate General delivered at the sitting on 11 April 1989,
gives the following
Judgment
Grounds
1 By an application lodged at the Court Registry on 2 November 1987 the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by charging traders the cost of inspections and administrative formalities carried out during part of the normal business hours of customs offices at frontier posts, the Italian Republic had failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty, the provisions of the EEC regulations on the common organization of agricultural markets and the preferential agreements concluded by the Community with certain non-member countries which prohibit charges having an effect equivalent to customs duties in trade with non-member countries, and Article 5 of Council Directive 83/643 of 1 December 1983 on the facilitation of physical inspections and administrative formalities in respect of the carriage of goods between Member States ( Official Journal 1983, L 359, p . 8 ), as amended by Council Directive 87/53 of 15 December 1986 ( Official Journal 1987, L 24, p . 33 ).
2 Article 11 of Decree No 43 of the President of the Italian Republic of 23 January 1973 consolidating the legislative provisions in customs matters, as amended by Article 1(2 ) of Decree No 254 of 8 May 1985, provides that where the volume of traffic so warrants, the hours of customs offices and their various departments at border crossings, ports and airports must be such as to permit inspections and formalities relating to the movement of means of transport and goods which are not being carried out under a customs transit procedure to be performed from Monday to Friday during an uninterrupted period of at least 10 hours unless those days are public holidays . A charge is to be made representing the cost of the service for customs transactions carried out during business hours but outside the normal working hours of civil servants, which in the Italian Republic are six hours per day from Monday to Saturday . Article 15 of Decree No 254 provides more generally that inspections and formalities referred to in the decree which are carried out during the business hours of offices outside normal civil service hours are to be charged for at the cost of the service .
3 The Commission took the view that in so far as the aforementioned national provisions require traders who attend at customs offices at frontier posts during their normal business hours as fixed by Directive 83/643, as amended by Directive 87/53, to be charged the cost of the services of customs staff from Monday to Friday during the four hours which lie outside the normal working hours of civil servants in the Italian Republic, they are not only incompatible with Article 5(1 ) and ( 4 ) of Directive 83/643 as amended by Directive 87/53 but also introduce a tax having an effect equivalent to a customs duty, prohibited in trade between Member States by Articles 9 and 12 of the Treaty . In addition, in respect of trade with non-member countries the contested legislation of the Italian Republic infringes the prohibitions on charges having an effect equivalent to customs duties contained in the EEC regulations on the common organization of the agricultural markets and in preferential agreements between the Community and certain non-member countries .
4 On 28 April 1986 the Commission therefore sent the Government of the Italian Republic formal notice initiating the procedure under Article 169 of the Treaty .
5 Since there was no reply to that letter, on 31 October 1986 the Commission sent the Government of the Italian Republic a reasoned opinion pursuant to the first paragraph of Article 169 of the Treaty .
6 On 21 May 1987 the Italian Republic informed the Commission that interministerial meetings were taking place to consider the problem thoroughly and that the Commission would be immediately informed of the results .
7 Since it received no information on the matter the Commission brought the present action .
8 Reference is made to the Report for the Hearing for a summary of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court .
9 With regard to intra-Community trade it is necessary first of all to consider whether the contested charge constitutes a charge having an effect equivalent to a customs duty, prohibited by Articles 9 and 12 of the Treaty in conjunction with Article 5 of Directive 83/643, as amended by Directive 87/53 .
10 Article 9 of the Treaty provides for the prohibition between Member States of customs duties themselves and of all charges having equivalent effect .
11 As the Court has repeatedly observed ( see most recently the judgment of 27 September 1988 in Case 18/87 Commission v Federal Republic of Germany (( 1988 )) ECR 5427 ), the justification for the prohibition of charges having an effect equivalent to customs duties lies in the fact that any pecuniary charge, however small, imposed on goods by reason of the fact that they cross a frontier constitutes an obstacle to the movement of goods in that it artificially increases the price of imported or exported goods in relation to domestic goods . It follows that any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier constitutes a charge having an effect equivalent to a customs duty within the meaning of Articles 9, 12, 13 and 16 of the Treaty .
12 In the present case it is not disputed that the charge provided for by the legislation of the Italian Republic applies to goods by reason of the fact that they cross the frontier and that it adds to transport costs so as to increase the price of imported goods .
13 Furthermore, it is not alleged that the formalities and transactions carried out by reason of the crossing of the frontier which give rise to the levying of the charge are imposed by Community law . It must accordingly be assumed that in the present case the formalities and transactions are carried out by virtue solely of national law .
14 In the view of the Government of the Italian Republic, however, the charge provided for by its legislation is justified by the fact that since it is levied on the occasion of formalities and transactions carried out outside the normal working hours of the officials in customs offices at frontier posts it constitutes consideration for a service rendered in the interests of the haulier and is proportionate to the value of such service .
15 The Court has consistently held that a charge imposed on goods by reason of the fact that they cross a frontier is not a charge having equivalent effect prohibited by the Treaty if it constitutes consideration for a specific service actually and individually rendered to the trader, in an amount proportionate to that service ( see the judgment of 26 February 1975 in Case 63/74 Cadsky v Istituto Nazionale per il Commercio Estero (( 1975 )) ECR 281 ). For that to be so there must be a specific or individual benefit provided to the trader .
16 There is no such specific service in the case of a haulier who attends at a customs office during its normal business hours, which are fixed in respect of frontier posts by the second indent of Article 5(1)(a ) of Directive 83/643, as amended by Directive 87/53, as an uninterrupted period of at least 10 hours from Monday to Friday and at least six hours on Saturday, unless those days are public holidays .
17 It follows from the foregoing that by charging traders in respect of intra-Community trade the cost of inspections and administrative formalities carried out during part of the normal business hours of the customs offices at frontier posts as determined by the second indent of Article 5(1)(a ) of Directive 83/643, as amended by Directive 87/53, the Italian Republic has failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty .
18 As regards customs formalities in trade with non-member countries the Commission took the view in its letter of formal notice addressed to the Government of the Italian Republic that "to charge tax-payers operating in the circumstances referred to in the second indent of Article 5(1 ) of Directive 83/643 special fees by way of remuneration for services rendered by customs staff from Monday to Friday during four hours of the normal daily business hours of customs offices constitutes a charge having an effect equivalent to a customs duty prohibited by the EEC regulations on the common organization of the market under the common agricultural policy and by preferential agreements concluded by the Community with certain non-member countries ."
19 In the reasoned opinion sent to the Government of the Italian Republic the Commission' s objection is worded in identical terms .
20 In its application the Commission adopts the same wording but adds that in particular the charge levied pursuant to the legislation of the Italian Republic is contrary to Article 20(2 ) of Council Regulation No 425/77 of 14 February 1977 amending Regulation No 805/68 on the common organization of the market in beef and veal and adapting Regulation No 827/68 and Regulation No 950/68 on the Common Customs Tariff ( Official Journal 1977, L 61, p . 1 ) and Article 6 of the agreement annexed to Regulation 1691/73 of the Council of 25 June 1973 concluding an Agreement between the European Economic Community and the Kingdom of Norway and adopting provisions for its implementation ( Official Journal 1973, L 171, p . 1 ).
21 However, the Commission has failed to put forward the slightest argument to show that a charge required in the circumstances described above must be regarded as a charge having an effect equivalent to a customs duty, prohibited by Community law . Since these are formalities and inspections which may be regarded as being carried out in order to satisfy requirements imposed by Community law, particularly under the Common Customs Tariff, the Commission ought to have shown how and on what basis the levying of such a charge contravenes an obligation imposed by the Treaty or pursuant thereto .
22 Even though the view may be taken that Member States have no power as a general rule to add national charges to the duties due under Community legislation since that would deprive the Community legislation of its necessary uniformity ( see the judgment of 28 June 1978 in Case 70/77 Simmenthal v Amministrazione delle finanze dello Stato (( 1978 )) ECR 1453 ), the Commission has not adduced the slightest argument making it possible to determine whether and on what basis the alleged failure to fulfil obligations must be regarded as established, especially in view of the argument put forward by the Government of the Italian Republic to the effect that the charge in question constitutes consideration for a service actually rendered to the importer .
23 By proceeding in that way the Commission has not put the Court in a position to identify with the requisite precision the failure to fulfil its obligations with which the Italian Republic is charged .
24 In those circumstances the Commission' s claims in relation to the charges levied in trade with non-member countries must be rejected .
Decision on costs
Costs
25 Under Article 69(2 ) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs . However, the first subparagraph of Article 69(3 ) provides that the Court may order the parties to bear their own costs in whole or in part if each party succeeds on some and fails on other heads . Since the Commission has failed in one of its heads of claim and the Italian Republic has failed in the other, the parties must bear their own costs .
Operative part
On those grounds,
THE COURT
hereby :
( 1 ) Declares that by charging traders in respect of intra-Community trade the cost of inspections and administrative formalities carried out during part of the normal business hours of customs offices at frontier posts as determined by the second indent of Article 5(1)(a ) of Council Directive 83/643 of 1 December 1983 on the facilitation of physical inspections and administrative formalities in respect of the carriage of goods between Member States, as amended by Council Directive 87/53, the Italian Republic has failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty;
( 2 ) Dismisses the remainder of the application;
( 3 ) Orders the parties to bear their own costs .
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