Opinion of the Advocate-General
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My Lords,
1. In this case, the Court is asked by the Corte Suprema di Cassazione for a preliminary ruling on the interpretation of Article 35 of Council Regulation No 222/77 on Community transit (Official Journal 1977 L 38, p. 1) in the version in force prior to its amendment in 1981. The reference has been made in the course of a dispute between a Swiss company, Berner Allgemeine Versicherungsgesellschaft ("Berner"), and the Italian Amministrazione delle Finanze dello Stato over the payment of a guarantee lodged by Berner in 1978 pursuant to Article 27 of Regulation No 222/77. The case appears to be of mainly historical interest, since the issue was resolved by the 1981 amendment for cases arising after that amendment took effect. However, we were told at the hearing that the outcome of a number of cases pending before the Italian courts depends on the response given by the Court to the question referred to it in these proceedings.
2. Regulation No 222/77 establishes a Community transit procedure which is applicable when goods move between two points in the Community. According to the fourth recital, the purpose of the procedure is to "facilitate transport within the Community and in particular simplify the formalities to be carried out when internal frontiers are crossed". By virtue of Article 1 of the Agreement between the Community and the Swiss Confederation signed in 1972 (see Council Regulation No 2812/72, Official Journal 1972 L 294, p. 1), the legislation on Community transit was, at the material time, applicable to the movement of goods between two points in the Community through Swiss territory and to any other movement of goods between the territory of the Community and that of the Swiss Confederation.
3. The Community transit procedure has two variants, one for external Community transit and one for internal Community transit (see Article 1(1) of Regulation No 222/77). It is the former variant which is in issue in these proceedings, the goods transported not being in free circulation in the Member States (see Article 1(2)(a)).
4. In order to take advantage of the procedure for external Community transit, a person must furnish a guarantee in accordance with Article 27 of the regulation. According to the first paragraph of that provision, the purpose of the guarantee is:
"To ensure collection of the duties and other taxes which each Member State is authorized to charge in respect of goods passing through its territory in the course of Community transit ...".
These proceedings are concerned with the circumstances in which a guarantee provided under that provision may be called in.
5. The dispute before the national court arose in the following way. In 1978, the Swiss customs office at Locarno-Cadenazzo (the "office of departure" within the meaning of Article 11(c) of the regulation) issued two external Community transit declarations known as T1s in respect of a consignment of goods which it believed were to be placed on the market in Belgium. In accordance with Article 17 of the regulation, a deadline was prescribed within which the goods in question were to be produced at the customs office of the country of destination. Berner stood as guarantor in respect of the goods.
6. Had the procedure followed its normal course, the office of destination would, when the goods arrived there, have returned copies of the T1 declarations to the office of departure, whereupon the documents would have been discharged and the guarantor released from his obligations. However, the goods were unlawfully placed on the market in Italy and never reached Belgium. In July 1979, the Swiss customs authorities notified Berner that the T1 documents had not been discharged within the prescribed time limit. In January 1982, the customs office at Como in Italy ordered Berner to pay the sum of Lit 6 250 000 under the guarantee.
7. Berner challenged that order on the basis of, inter alia, the second paragraph of Article 35 of the regulation, which, at the material time, provided as follows:
"When the guarantor has not been notified by the office of departure of the non-discharge of the T1 document, he shall be released from his obligations on the expiration of a period of twelve months from the date of registration of the T1 declaration."
Berner was notified of the non-discharge of the T1 documents in question not by the office of departure but by the Swiss directorate general of customs. It claims that it cannot therefore be required to pay under the guarantee.
8. The dispute has reached the Corte Suprema di Cassazione, which has referred the following question to the Court:
"Is Article 35 of Council Regulation (EEC) No 222/77 on Community transit - which, in its original wording, provides that when the guarantor has not been notified by the office of departure of the non-discharge of the T1 document, he shall be released from his obligations on the expiration of a period of 12 months from the date of registration of the T1 declaration - to be interpreted as meaning that the power to give the relevant notification is vested exclusively in the office of departure, or is that power also held by the office which under national provisions is of higher rank than the office of departure and can perform that function in its place?"
9. Berner and the Commission argue that, under the version of Article 35 in force at the material time, a guarantor only becomes liable following notification of non-discharge by the office of departure. This expression, they say, is used in Regulation No 222/77 in the precise sense defined in Article 11(c), according to which it means "the customs office where the Community transit operation begins". Berner and the Commission maintain that there is no justification for construing the expression differently for the purposes of Article 35, where it is clearly used in the strict sense laid down in Article 11(c).
10. That the Community legislature intended the expression to bear the meaning given to it by Article 11(c) in the context of Article 35 is confirmed, according to Berner and to the Commission, by an amendment made to the latter provision in 1981, after the facts of this case took place. Regulation No 3813/81 (Official Journal 1981 L 383, p. 28) replaced the expression "the office of departure" in the second paragraph of Article 35 of Regulation No 222/77 with the expression "the competent customs authorities of the Member State of departure". In the view of Berner and of the Commission, that amendment provides confirmation, should such confirmation be needed, that the second paragraph of Article 35 in its original form bore a narrower meaning.
11. The Italian Government argues that the purpose of the second paragraph of Article 35 is to prevent a guarantor from being called upon in the absence of notification that the T1 document has not been discharged within the prescribed period. It is not necessary for such notification to come from the office of departure provided the guarantor has been informed of the non-discharge. The amendment to the second paragraph of Article 35 introduced in 1981 was, according to the Italian Government, made purely to clarify the position and did not effect any change of substance.
12. I consider that the approach taken by Berner and by the Commission is the correct one. The terms of the contested provision are in this respect perfectly clear.
13. If I found that provision at all ambiguous, I would take the view that the authorities of a Member State should not be entitled to require payment under a guarantee provided pursuant to Article 27 of the regulation except in circumstances which are clearly laid down. As the Commission points out, an undertaking which provides guarantees in accordance with that provision, often a bank or, as in the present case, an insurance company, may have no control over the actual transit of the goods in question. In my view, it is therefore entitled to know the precise extent of its potential liability, particularly as the obligation to pay may be regarded as a form of penalty. As the Court emphasized in Case 117/83 Koenecke [1984] ECR 3291, paragraph 11, "a penalty, even of a non-criminal nature, cannot be imposed unless it rests on a clear and unambiguous legal basis".
14. This point is acknowledged by Article 35 of the regulation, for, as the Court said of its predecessor, that provision "seeks to ensure certainty in the law for persons who act as guarantors for transit operations ...": see Case 277/80 SIC v Amministrazione delle Finanze dello Stato [1982] ECR 629, paragraph 13. The need for legal certainty is self-evident in the field of customs law. Moreover, uncertainty on the provisions in issue here would be liable to increase the costs of providing guarantees, and so would be detrimental to the objectives of the transit procedure.
15. I consider that the requirements of legal certainty are in this respect satisfied by the second paragraph of Article 35 of the regulation, in both its original and its amended forms, interpreted according to the natural meaning of the words used. Those requirements would not in my view be satisfied if Article 35 in its original form were interpreted in the manner advocated by the Italian Government.
16. The Italian Government argues that legal certainty would not be threatened by a more liberal interpretation of the contested provision, for no-one has suggested that Berner was unaware that the T1 documents had not been discharged. I am unable to accept this argument. If the decisive question was not who notified the guarantor of the non-discharge but simply whether the guarantor was aware of it, a guarantor would find himself exposed to the risk that notification, perhaps equivocal, from an unofficial source might subsequently be held to have put him on notice that the T1 document had not been discharged. The question might also arise whether a guarantor who was not, but ought to have been, aware of the non-discharge could be required to pay under the guarantee into which he had entered.
17. The Italian Government does not go as far as this in the present case, contending merely that any official notification of non-discharge is sufficient. However, other national authorities might wish to go further. If the strict terms of the contested legislation were set aside, it would be unclear precisely what formalities had to be completed before a guarantee could be called in.
18. The Italian Government also claims that the practice of the Swiss customs authorities was often to issue notifications of non-discharge centrally. This practice was authorized, in the view of the Italian Government, by Article 6(1) of the abovementioned Agreement between the Community and the Swiss Confederation. The first sentence of that provision states: "Les bureaux de douane suisses compétents sont habilités à assumer notamment les fonctions des bureaux de départ, de passage, de destination et de garantie."
19. In my view, however, Article 6(1) of the 1972 Agreement simply empowered the appropriate Swiss customs offices to act in the same way as the customs offices of the Member States in giving effect to the Community transit procedure. It did not empower a single Swiss institution to perform functions which, in the Member States, were the responsibility of a number of specified customs offices.
20. This interpretation of Article 6(1) of the 1972 Agreement is supported by the fact that the text of the legislation on Community transit which was set out in Appendix I to the Agreement was modified in 1982 in accordance with the amendment made the previous year to the second paragraph of Article 35 of Regulation No 222/77. In my view, the Swiss customs authorities were therefore bound to follow the same procedure as the customs authorities of the Member States in notifying guarantors when T1 documents were not discharged within the prescribed time limit.
21. Finally, the Italian Government argues that the failure of the Council to refer specifically in the preamble to Regulation No 3813/81 to the amendment to the second paragraph of Article 35 of Regulation No 222/77 means that that amendment cannot be taken to have effected any change of substance. Otherwise, it is argued, Regulation No 3813/81 would not satisfy the requirements of Article 190 of the Treaty, according to which regulations must "state the reasons on which they are based".
22. I am not persuaded by this argument either. It is well established that the requirements of Article 190 are met when the preamble to a regulation indicates broadly its general objectives and explains the essence of the measures taken. A specific statement of the reasons underlying all the details contained in a regulation is not necessary (see e.g. Case 166/78 Italy v Council [1979] ECR 2575, para. 8).
23. Moreover, the first recital to Regulation No 3813/81 states that "experience over several years of the application of the Community transit procedure ... has revealed that certain formalities required by that procedure can be made more flexible". In my view, that statement is entirely consistent with the view that that regulation made a substantive amendment to the second paragraph of Article 35 of Regulation No 222/77 and that, before that amendment, the provision had to be given the narrower interpretation which I consider to be its clear meaning.
24. I would therefore answer the question referred by the Corte Suprema di Cassazione as follows:
Article 35 of Regulation No 222/77 of 13 December 1976, in the version in force prior to its amendment by Regulation No 3813/81 of 15 December 1981, must be interpreted as meaning that the release of the guarantee may be refused only where the guarantor has been notified of the non-discharge of the T1 document by the customs office where the Community transit operation began. Release of the guarantee may not be refused where the guarantor was notified of the non-discharge of the T1 document by another customs authority of the State of departure, even if under the law of that State that authority has higher status than the aforementioned customs office.
(*) Original language: English.
Translation
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