JUDGMENT OF THE COURT OF FIRST INSTANCE (First Chamber)
19 February 1998 (1)
(Action for annulment Importation of high-quality beef ('Hilton beef)
Regulation (EEC) No 1430/79 Article 13 Commission decision refusing
remission of import duties Rights of the defence Manifest error of
assessment)
In Case T-42/96,
Eyckeler & Malt AG, a company incorporated under German law, established in
Hilden (Germany), represented by Dietrich Ehle and Volker Schiller,
Rechtsanwälte, Cologne, with an address for service in Luxembourg at the
Chambers of Marc Lucius, 6 Rue Michel Welter,
supported by
United Kingdom of Great Britain and Northern Ireland, represented initially by
Stephanie Ridley, of the Treasury Solicitor's Department, acting as Agent, and
subsequently by John Collins, of the Treasury Solicitor's Department, acting as
Agent, and by David Anderson, Barrister, with an address for service in
Luxembourg at the British Embassy, 14 Boulevard Roosevelt,
v
Commission of the European Communities, represented by Götz zur Hausen,
Legal Adviser, acting as Agent, with an address for service in Luxembourg at the
office of Carlos Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
APPLICATION for annulment of the Commission decision of 20 December 1995
(K(95) 3391 final) addressed to the Federal Republic of Germany and concerning
an application for remission of import duties,
THE COURT OF FIRST INSTANCE
OF THE EUROPEAN COMMUNITIES (First Chamber),
composed of: A. Saggio, President, B. Vesterdorf and R.M. Moura Ramos, Judges,
Registrar: J. Palacio González, Administrator,
having regard to the written procedure and further to the hearing on 26 November
1997,
gives the following
Judgment
Legal background
- 1.
- Article 13(1) of Council Regulation (EEC) No 1430/79 of 2 July 1979 on the
repayment or remission of import or export duties (OJ 1979 L 175, p. 1), as
amended by Article 1(6) of Council Regulation (EEC) No 3069/86 of 7 October
1986 (OJ 1986 L 286, p. 1), provides:
'Import duties may be repaid or remitted in special situations ... which result from
circumstances in which no deception or obvious negligence may be attributed to the
person concerned.
- 2.
- According to Article 4(2)(c) of Commission Regulation (EEC) No 3799/86 of 12
December 1986 laying down provisions for the implementation of Articles 4a, 6a,
11a and 13 of Council Regulation (EEC) No 1430/79 on the repayment or
remission of import or export duties (OJ 1986 L 352, p. 19), 'production, even in
good faith, for the purpose of securing preferential tariff treatment of goods
entered for free circulation, of documents subsequently found to be forged, falsified
or not valid for the purpose of securing such preferential tariff treatment is not
by itself a special situation within the meaning of Article 13 of Regulation No
1430/79.
- 3.
- Article 5(2) of Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of import 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 (OJ 1979 L 197, p. 1), provides:
'The competent authorities may refrain from taking action for the post-clearance
recovery of import duties or export duties which were not collected as a result of
an error made by the competent authorities themselves which could not reasonably
have been detected by the person liable, the latter having for his part acted in good
faith and observed all the provisions laid down by the rules in force as far as his
customs declaration is concerned ...
- 4.
- According to Article 2(1)(a) of Council Regulation (EEC) No 2144/87 of 13 July
1987 on customs debt (OJ 1987 L 201, p. 15), as amended by Council Regulation
(EEC) No 4108/88 of 21 December 1988 (OJ 1988 L 361, p. 2), a customs debt on
importation is incurred when goods liable to import duties are placed in free
circulation in the customs territory of the Community. Article 3(a) states that that
debt is incurred at the moment when the competent authorities accept the entry
of the goods for free circulation.
- 5.
- On 12 October 1992 the Council adopted Regulation (EEC) No 2913/92
establishing the Community Customs Code (OJ 1992 L 302, p. 1, hereinafter 'the
Customs Code), which entered into force on 1 January 1994. Article 251(1) of the
Customs Code repealed, in particular, Regulations Nos 1430/79, 1697/79 and
2144/87.
- 6.
- Article 239(1) of the Customs Code provides:
'Import duties or export duties may be repaid or remitted in situations ... resulting
from circumstances in which no deception or obvious negligence may be attributed
to the person concerned. The situations in which this provision may be applied and
the procedures to be followed to that end shall be defined in accordance with the
Committee procedure. Repayment or remission may be made subject to special
conditions.
- 7.
- Regulation No 3799/86 was repealed by Article 913 of Commission Regulation
(EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation
of Regulation No 2913/92 (OJ 1993 L 253, p. 1), with effect from 1 January 1994,
the date on which Regulation No 2454/92 entered into force.
- 8.
- Article 907 of Regulation No 2454/93 provides:
'After consulting a group of experts composed of representatives of all Member
States, meeting within the framework of the Committee to consider the case in
question, the Commission shall decide whether or not the special situation which
has been considered justifies repayment or remission.
That decision shall be taken within six months of the date on which the case
referred to in Article 905(2) is received by the Commission. Where the
Commission has found it necessary to ask for additional information from the
Member State in order to reach its decision, the six months shall be extended by
a period equivalent to that between the date the Commission sent the request for
additional information and the date it received that information.
- 9.
- Article 904 of the Regulation provides:
'Import duties shall not be ... remitted where the only grounds relied on in the
application for ... remission are, as the case may be:
...
(c) presentation, for the purpose of obtaining preferential tariff treatment of
goods declared for free circulation, of documents subsequently found to be
forged, falsified or not valid for that purpose, even where such documents
were presented in good faith.
Background to the dispute
- 10.
- In 1991 and 1992, imports of high-quality beef from Argentina were subject to
customs duty at the rate of 20%, within the framework of the Common Customs
Tariff [see Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and
statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1),
as subsequently amended].
- 11.
- An import levy also applied in addition to that customs duty. The amount of the
levy was fixed at regular intervals by the Commission, in accordance with Article
12 of Council Regulation (EEC) No 805/68 of 27 June 1968 on the common
organisation of the market in beef and veal (OJ, English Special Edition 1968 (I)
p. 107, as subsequently amended). At the time when the imports at issue took
place, it was in the region of DM 10 per kilogram.
- 12.
- Since 1980, the Community had been required, under the General Agreement on
Tariffs and Trade (GATT), to open an annual Community tariff quota exempt
from import levies in respect of beef and veal from, inter alia, Argentina.
- 13.
- Pursuant to those obligations, the Council adopted Regulations (EEC) No 3840/90
of 20 December 1990 (OJ 1990 L 367, p. 6) and No 3668/91 of 11 December 1991
(OJ 1991 L 349, p. 3) opening a Community tariff quota for high-quality, fresh,
chilled or frozen meat of bovine animals (so-called 'Hilton beef) falling within CN
codes 0201 and 0202 and for products falling within CN codes 0206 10 95 and
0206 29 91 (hereinafter 'Hilton beef) in respect of 1991 and 1992. Only the
applicable Common Customs Tariff rate of 20% was payable in respect of meat
imported under that quota (hereinafter 'the Hilton quota) (Article 1(2)) of both
regulations).
- 14.
- In respect of the same two years, the Council also adopted Regulations (EEC) No
2329/91 of 25 July 1991 (OJ 1991 L 214, p. 1) and No 1158/92 of 28 April 1992 (OJ
1992 L 122, p. 5) opening as an autonomous measure a special import quota for
high-quality, fresh, chilled or frozen meat of bovine animals falling within CN codes
0201 and 0202 as well as products falling within CN codes 0206 10 95 and
0206 29 91. Those regulations increased the quantities which could be imported
under the Hilton quota.
- 15.
- Finally, for the same period, the Commission adopted Regulation (EEC) No
3884/90 of 27 December 1990 laying down detailed rules for the application of the
import arrangements provided for by Council Regulations (EEC) No 3840/90 and
(EEC) No 3841/90 in the beef and veal sectors (OJ 1990 L 367, p. 129) and
Regulation (EEC) No 3743/91 of 18 December 1991 laying down detailed rules for
the application of the import arrangements provided for by Council Regulations
(EEC) No 3668/91 and (EEC) No 3669/91 in the beef and veal sectors (OJ 1991
L 352, p. 36) (hereinafter 'the implementing regulations).
- 16.
- Under the Hilton quota, certain quantities of Hilton beef could thus be imported
into the Community from Argentina free of levies. Grant of that benefit was
subject to production, at the time of importation, of a certificate of authenticity
issued by the competent body in the exporting country.
- 17.
- Until the end of 1991, the 'Junta Nacional de Carnes (National Meat Board) was
responsible for issuing certificates of authenticity in Argentina. In late 1991/early
1992, responsibility for issuing certificates of authenticity was transferred to the
'Secretaría de Agricultura, Ganadería y Pesca (Department for Agriculture,
Livestock and Fisheries). Only beef exporters recognised by the Argentine
authorities received such certificates of authenticity.
- 18.
- The Commission was informed, in 1993, of the possibility that certificates of
authenticity were being falsified and initiated investigations in cooperation with the
Argentine authorities.
- 19.
- On several occasions, Commission officials visited Argentina to carry out
investigations, in cooperation with national officials.
- 20.
- The first mission took place from 8 to 19 November 1993. The results of that
mission were recorded in a report dated 24 November 1993 (hereinafter 'the 1993
report), which confirmed the existence of irregularities.
- 21.
- According to that report, the Argentine authorities raised the question why those
irregularities had not been detected when the Hilton beef was imported into the
Community. Point 11 of the report stated: '... the Argentine authorities
emphasised that, for many years, they had submitted to the Commission (DG VI)
on a more or less regular basis, a list of all the certificates of authenticity for
[Hilton beef] issued in the preceding 10 days setting out certain particulars such as
the Argentine exporter, the recipient in the Community, the gross and net weight
etc. According to the persons interviewed, it would easily have been possible, on
the basis of such a list, to compare the data with the details on the certificates
produced when the goods at issue were imported and to identify those which did
not correspond with the data on the list.
- 22.
- A second mission to Argentina took place from 19 April to 6 May 1994. According
to the report of that mission, dated 17 August 1994 (hereinafter 'the summary
report), more than 460 Argentine certificates of authenticity presented in 1991 and
1992 had been falsified.
- 23.
- The applicant is a German company which has been importing, inter alia, Hilton
beef from Argentina for many years. Its commercial interests were represented in
Argentina by an independent agency, Multiagrar Representaciones del Exterior
(hereinafter 'the agency). The agency's task was to gather offers from the various
slaughterhouses and forward them to the applicant. During the period at issue, the
applicant purchased Hilton beef from several Argentine abattoirs, including the
undertaking Manufactura de Carnes Vacunas, which was one of its largest
suppliers. The investigations subsequently carried out by the Commission
apparently revealed, however, that a large proportion of the certificates of
authenticity accompanying the goods delivered by that undertaking had been
falsified.
- 24.
- When the beef imported by the applicant was put into free circulation in the
Community, it was granted an exemption from levies under the tariff quotas
opened on presentation of the certificates of authenticity.
- 25.
- After the aforementioned falsifications were detected, the German authorities
sought post-clearance payment of the import duties by the applicant. Between 7
March and 23 August 1994, the applicant received demands for payment totalling
DM 11 422 736.45.
- 26.
- By letter of 1 March 1995 the applicant thereupon submitted an application to the
competent German customs authorities for remission of the import duties
(hereinafter 'the application for remission).
- 27.
- That application was submitted to the Federal Ministry of Finance. By letter of 25
June 1995, the Ministry asked the Commission to decide whether grant of remission
of import duties was justified pursuant to Article 13 of Regulation No 1430/79. Its
request was received by the Commission on 5 July 1995.
- 28.
- On 2 October 1995 a group of experts composed of representatives of all the
Member States met in order to give an opinion on whether the application for
remission of import duties was well founded in accordance with Article 907 of
Regulation No 2454/93. Since a copy of the applicant's application of 1 March
1995 had not been sent to all the representatives of the Member States before that
meeting, the matter was dealt with only provisionally at the meeting. The
Commission therefore asked the members of the group of experts to inform it in
writing of their definitive position by 25 October 1995 at the latest.
- 29.
- By decision of 20 December 1995, addressed to the Federal Republic of Germany,
the Commission considered that the application for remission was not justified
(hereinafter 'the contested decision).
Procedure and forms of order sought by the parties
- 30.
- By application lodged at the Registry of the Court of First Instance on 22 March
1996, the applicant brought an action for the annulment of the contested decision.
- 31.
- By application lodged at the Registry of the Court of First Instance on 2 October
1996, the United Kingdom of Great Britain and Northern Ireland sought leave to
intervene in support of the applicant. By order of 9 December 1996, the President
of the Third Chamber granted that request.
- 32.
- By decision of the Court of First Instance of 2 July 1997, the Judge-Rapporteur was
assigned to the First Chamber and the case was, consequently, assigned to that
chamber.
- 33.
- Upon hearing the report of the Judge-Rapporteur, the Court of First Instance
(First Chamber) decided to open the oral procedure. By letter of 13 October 1997,
in the context of a measure of organisation of procedure, it requested the parties
to produce certain documents and to reply to certain questions in writing. The
applicant and the Commission complied with that request by letters lodged at the
Registry of the Court of First Instance on 29 October and 5 November 1997
respectively.
- 34.
- The parties presented oral argument and replied to the Court's questions at the
hearing on 26 November 1997.
- 35.
- The applicant claims that the Court should:
annul the contested decision;
order the Commission to pay the costs.
- 36.
- The Commission contends that the Court should:
dismiss the application;
order the applicant to pay the costs.
- 37.
- The United Kingdom, the intervener, claims that the Court should annul the
contested decision.
Substance
- 38.
- In support of its application, the applicant raises five pleas in law alleging,
respectively, erroneous legal basis for the contested decision, breach of the rights
of the defence, infringement of Article 239 of the Customs Code, or, in the
alternative, of Article 13 of Regulation No 1430/79, breach of the obligation to
state reasons and breach of the principle of proportionality.
The first plea alleging erroneous legal basis for the contested decision
Arguments of the parties
- 39.
- The applicant claims that the Commission incorrectly based the contested decision
on Article 13 of Regulation No 1430/79 when it should have been based on Article
239 of the Customs Code.
- 40.
- In the present case, the 'entry in the accounts, that is to say the act by which the
competent authorities determined the amount of the import duties, took place after
the Customs Code entered into force on 1 January 1994, since the notices of
recovery were dated March 1994. It was only after the Customs Code entered into
force that the Commission and the German customs authorities became aware that
certificates of authenticity had been falsified and, consequently, sought post-clearance recovery of the import duties.
- 41.
- Furthermore, it is apparent from the judgment in Joined Cases 212/80 to 217/80
Salumi and Others [1981] ECR 2735 that new substantive rules apply to
proceedings pending in so far as it follows from their terms and objective that they
should apply. By repealing Regulation No 1430/79, the Community legislature
intended only the Customs Code to apply from 1 January 1994, even to earlier
conduct in respect of which no decision had yet been taken.
- 42.
- The choice of the applicable legal rule is important from the point of view of
substantive law. Whilst Article 13 of Regulation No 1430/79 requires the existence
of 'special situations, Article 239 of the Customs Code also applies in situations
resulting from mere 'circumstances. The conditions for remission on equitable
grounds were thus relaxed in keeping with the case-law according to which a
decision on grounds of equity should not be subject to excessively strict conditions.
- 43.
- Finally, the applicant recalls that, in its application for remission dated 1 March
1995, it claimed that Article 239 of the Customs Code was applicable. Since the
Commission had not adopted a decision that was valid from a procedural point of
view within the six-month period provided for by Article 907 of Regulation No
2454/93, the German customs authorities should have granted the application for
remission in accordance with Article 909 of that regulation.
- 44.
- The Commission contends that Article 13 of Regulation No 1430/79 was in force
at the material time. The decisive moment for determining the temporal scope
of the substantive provision is the initial 'entry in the accounts (Articles 2 of
Regulation No 1430/79 and 236 of the Customs Code).
- 45.
- Since that event dates back to the dates of the importations, which took place in
1991 and 1992 respectively, that is to say before the Customs Code entered into
force, the contested decision was correctly based on Article 13 of Regulation No
1430/79.
Findings of the Court
- 46.
- It is common ground that the importations which gave rise to the dispute took
place during 1991 and 1992.
- 47.
- According to the rules in force at that time, namely Regulation No 2144/87 (see
paragraph 4 above), the customs debt on import was incurred on the dates when
the competent authorities accepted the entry of the goods concerned for free
circulation.
- 48.
- When each importation was made the applicant presented an import declaration
to the German customs authorities and paid customs duties at the rate of 20% in
accordance with Article 1(2) of Regulations No 3840/90 of 20 December 1990 and
No 3668/91 of 11 December 1991, cited above. Initial entries were accordingly
made in the accounts of the amount of the import duties, within the meaning of
Article 2 of Regulation No 1697/79, in respect of the importations made during
1991 and 1992 and initial clearance was received.
- 49.
- The customs debt comprised not only the customs duties, but also the levies at
issue (see paragraph 11 above), in so far as the exemption from those levies had
indirectly been obtained by presentation, at the time when the import declaration
was made, of falsified certificates of authenticity.
- 50.
- As the Commission correctly pointed out, the date on which the competent national
authorities decided to proceed with post-clearance recovery of the levies is not
relevant.
- 51.
- Indeed, if reference were made to such a date it would result in similar import
operations being treated differently, which would be incompatible with the principle
of equal treatment (Salumi and Others, cited above, paragraph 14).
- 52.
- Furthermore, the effects of any remission of import duties go back to the time
when the customs debt was incurred, that is to say the moment when the import
declarations were originally accepted.
- 53.
- It follows that the application for remission should have been examined in the light
of the substantive rules in force at the time when the importations at issue were
made and the entry of the goods for free circulation accepted (see, to the same
effect, Case C-97/95 Pascoal & Filhos [1997] ECR I-4209, paragraph 25). It should
thus have been examined in the light of Article 13 of Regulation No 1430/79,
notwithstanding the fact that that regulation was repealed when the Customs Code
entered into force on 1 January 1994.
- 54.
- Since the Customs Code did not provide for any transitional measures, general
principles of interpretation must be applied in order to determine its temporal
effect.
- 55.
- In that respect, the Court has held, inter alia, that although procedural rules are
generally held to apply to all proceedings pending at the time when they enter into
force, this is not the case with substantive rules. On the contrary, the latter are
usually interpreted as applying to situations existing before their entry into force
only in so far as it clearly follows from their terms, objectives or general scheme
that such an effect must be given to them (Salumi and Others, cited above,
paragraph 9).
- 56.
- There is nothing in the Customs Code to suggest that the substantive rule contained
in Article 239 thereof had retroactive effect.
- 57.
- It follows from the foregoing that the first plea must be rejected.
The second plea alleging breach of the rights of the defence
Arguments of the parties
- 58.
- The second plea has two limbs. In the first limb, the applicant claims that the
contested decision is vitiated by breach of an essential procedural requirement in
that the Commission failed to grant it the right to be heard during the
administrative procedure.
- 59.
- In order to ensure legal protection for the applicant, it was not sufficient that it was
able to put forward its arguments via the national authorities. It should have been
able, during the procedure before the Commission, to put its own case and
properly make its views known on the relevant circumstances and, where necessary,
on the documents taken into account by the Community institution (Case T-346/94
France-Aviation v Commission [1995] ECR II-2841, paragraph 32).
- 60.
- The applicant first learnt that the Commission had accused it of obvious negligence
within the meaning of Article 13 of Regulation No 1430/79 when the defence was
submitted. It is clear from the judgment in France-Aviation v Commission, cited
above, that such an allegation involves a complex legal appraisal requiring the
Commission to give the applicant the possibility of submitting its views on the
matter before a decision is adopted; that was not done in this case.
- 61.
- The possibility of exercising the rights of the defence directly before the
Commission is particularly important in circumstances such as those in this case
where it is alleged that the person concerned is at fault.
- 62.
- In the second limb to the plea, the applicant claims that, when a hearing took
place, the Commission should have placed on the file all the documents in its
possession which might be considered relevant so as to make it possible
subsequently to determine whether the allegations that the Commission and the
Argentine authorities had failed to comply with their obligations were well founded.
- 63.
- According to the applicant, the procedural provisions in Article 878 et seq. of
Regulation No 2454/93 reveal serious gaps from the point of view of legal
protection, since those provisions do not provide for the following rights and
obligations: the applicant's right to enforce its rights directly before the Commission
at a hearing, the Commission's obligation to inform the applicant, before adopting
its decision, of the basic facts and considerations in order for it to be able to raise
arguments to the contrary, and the applicant's right to require production of all the
necessary documents.
- 64.
- In view of those gaps, the applicant considers that a procedure similar to that
provided for in anti-dumping matters should be applied in the present case.
- 65.
- Finally, it notes that the meeting between its lawyer and the Commission was
merely an informal meeting and, furthermore, that it took place before the
application for remission of import duties was submitted to the Commission. That
meeting therefore did not offer the same guarantees of legal protection as a proper
hearing.
- 66.
- Since the contested decision was adopted in breach of the rights of the defence, it
should therefore be annulled.
- 67.
- The Commission denies infringing the rights of the defence. It recalls that the
Rules of Procedure do not currently provide for participation of the person liable
in the administrative procedure before the Commission. In that respect, it should
be noted that, in its judgment in France-Aviation v Commission, cited above, the
Court did not criticise the provisions of Regulation No 2454/93 or even consider
them to be inadequate.
- 68.
- A similar procedure to that laid down in respect of anti-dumping measures cannot
be applied. The Court has already held that the procedure followed in this field
differs considerably from that applicable with regard to anti-dumping duties (Joined
Cases C-121/91 and C-122/91 CT Control (Rotterdam) and JCT Benelux v
Commission [1993] ECR I-3873, paragraph 52).
- 69.
- None the less, it should be pointed out that, in contrast to the situation considered
in France-Aviation v Commission, cited above, the contested decision was not based
on an incomplete file. Both the Commission and the members of the group of
experts provided for by Article 907 of Regulation No 2454/93 had at their disposal
not only the file submitted to the Commission by the Member State concerned, in
accordance with Article 905(1) of that regulation, but also the applicant's
application for remission.
- 70.
- In accordance with the requirements laid down in the case-law, all the information
which the applicant itself considered essential was on the file at the time when the
contested decision was adopted (Case 294/81 Control Data Belgium v Commission
[1983] ECR 911, Joined Cases 98/83 and 230/83 Van Gend & Loos and
Expeditiebedrijf Wim Bosman v Commission [1984] ECR 3763 and CT Control
(Rotterdam) and JCT Benelux v Commission, cited above).
- 71.
- In this plea, the applicant fails to appreciate the purpose of the procedural
guarantees concerning remission of import duties. The sole purpose of those
guarantees is to bring to the attention of the Commission the facts and arguments
considered relevant by the applicant and not to inform the latter of the reasons on
which the Commission might subsequently base its decision.
- 72.
- It is true that the person liable must be given an opportunity to put his case on the
documents relied on by the Commission in adopting its decision (Case C-269/90
Technische Universität München [1991] ECR I-5469 and France-Aviation v
Commission, cited above), but that does not mean that he should also be able to
put his case on other documents.
- 73.
- In any event, the applicant's lawyer discussed the case with the Commission on
several occasions before it was submitted to the latter by the Federal Republic of
Germany. During those discussions, the applicant had already expressed its view
on the remission of import duties in the light of its own special situation.
Findings of the Court
- 74.
- First, it should be pointed out that the administrative customs procedure for the
remission of import duties involves two separate stages. The first is at national
level. The person liable must submit his application for remission to the national
administration. If the national administration considers that the remission should
not be granted, it may, according to the rules, adopt a decision to that effect
without submitting the application to the Commission. Such a decision may be
reviewed by the national courts. In contrast, if the national administration either
has doubts concerning the remission, or believes that the remission should be
granted, it must submit the application to the Commission for a decision. The
second stage of the procedure is thus at Community level and the national
authorities submit the file relating to the person liable to the Commission. After
consulting a group of experts composed of representatives of all the Member
States, the Commission then decides whether the application for remission is
justified.
- 75.
- Regulation No 2454/93 provides only for contact to take place between the person
concerned and the national administration, on the one hand, and between the
national administration and the Commission, on the other (France-Aviation v
Commission, cited above, paragraph 30). Thus, according to the rules in force, the
Member State concerned is the Commission's only interlocutor. In particular, the
procedural provisions in Regulation No 2454/93 do not confer any right on the
person liable to be heard during the administrative procedure before the
Commission.
- 76.
- However, according to settled case-law, respect for the rights of the defence in all
proceedings which are initiated against a person and are liable to culminate in a
measure adversely affecting that person is a fundamental principle of Community
law which must be guaranteed, even in the absence of any rules governing the
procedure in question (Case C-32/95 P Commission v Lisrestal and Others [1996]
ECR I-5373, paragraph 21, Joined Cases C-48/90 and C-66/90 Netherlands and
Others v Commission [1992] ECR I-565, paragraph 44, and Case C-135/92 Fiskano
v Commission [1994] ECR I-2885, paragraph 39).
- 77.
- In view of the margin of assessment enjoyed by the Commission in adopting a
decision pursuant to the general equitable provision contained in Article 13 of
Regulation No 1430/79, it is all the more important that respect for the right to be
heard is guaranteed in procedures for the remission or repayment of import duties
(France-Aviation v Commission, cited above, paragraph 34, and, to the same effect,
Technische Universität München, cited above, paragraph 14).
- 78.
- The principle of respect for the rights of the defence requires that any person who
may be adversely affected by a decision should be placed in a position in which he
may effectively make his views known, at least as regards the matters taken into
account by the Commission as the basis for its decision (see, to this effect,
Commission v Lisrestal and Others, paragraph 21, and Fiskano v Commission,
paragraph 40).
- 79.
- In competition matters, it is settled case-law that access to the file is itself closely
bound up with the principle of respect for the rights of the defence. Indeed, access
to the file is one of the procedural guarantees intended to protect the right to be
heard (Joined Cases T-10/92, T-11/92, T-12/92 and T-15/92 Cimenteries CBR and
Others v Commission [1992] ECR II-2667, paragraph 38, and T-36/91 ICI v
Commission [1995] ECR II-1847, paragraph 69).
- 80.
- That case-law is capable of being applied to the present case. The principle of
respect for the rights of the defence thus requires not only that the person
concerned should be placed in a position in which he may effectively make known
his views on the relevant circumstances, but also that he should at least be able to
put his own case on the documents taken into account by the Community
institution (Technische Universität München, paragraph 25, and France-Aviation v
Commission, paragraph 32).
- 81.
- Furthermore, since the applicant alleges that the Commission committed serious
breaches of its obligations to monitor the Hilton quota, the Court considers that in
order for the right to be heard to be exercised effectively the Commission must
provide access to all non-confidential official documents concerning the contested
decision, if requested to do so. Indeed, documents which the Commission does not
consider to be relevant may well be of interest to the applicant. If the Commission
could unilaterally exclude from the administrative procedure documents which
might be detrimental to it, that could constitute a serious breach of the rights of the
defence of a person seeking remission of import duties (see, to the same effect, ICI
v Commission, cited above, paragraph 93).
- 82.
- In the present case, the Federal Ministry of Finance concluded in its opinion on the
application for remission, issued when the file was submitted to the Commission,
that there was neither negligence nor deception on the part of the applicant.
- 83.
- It is alleged for the first time in the contested decision that the applicant failed to
exercise due care by omitting to adopt all the necessary safeguards concerning its
contractors and intermediaries in Argentina. In particular, the applicant did not
itself check the circulation of the certificates of authenticity issued to it (22nd
recital in the preamble to the decision) even though it had the resources to take
precautions (16th recital).
- 84.
- In that respect it should be recalled that, in paragraph 36 of its judgment in France-Aviation v Commission, cited above, the Court considered that when the
Commission contemplated diverging from the position taken by the competent
national authorities on whether the person concerned was guilty of obvious
negligence, it had a duty to arrange for the applicant to be heard. Such a decision
involves a complex legal appraisal which can be effected only on the basis of all the
relevant facts.
- 85.
- That case-law can be applied to the present case, even though it is only alleged that
the applicant failed to act with due care. Indeed, the Commission relied inter alia
on that allegation in rejecting the application for remission pursuant to Article 13
of Regulation No 1430/79 which, however, requires the absence of any 'obvious
negligence by the person concerned.
- 86.
- During the procedure before it, the Commission did not give the applicant an
opportunity to put its case and effectively make its views known on the relevant
circumstances relied on against it as the basis for the contested decision.
- 87.
- Although the applicant's lawyer did have discussions with the Commission, those
discussions took place before the application for remission was submitted to the
Commission. They were not, therefore, capable of satisfying the fundamental
purpose of the right to be heard, since the Commission had not adopted a
provisional position on the application at the time.
- 88.
- It follows that the contested decision was adopted following an administrative
procedure which was vitiated by a breach of essential procedural requirements.
The plea alleging breach of the rights of the defence is therefore well founded.
The third plea alleging infringement of Article 239 of the Customs Code or, in the
alternative, Article 13 of Regulation No 1430/79
Arguments of the applicant and the intervener
- 89.
- The applicant claims that the Commission committed manifest errors of assessment
when applying the concept of 'circumstances within the meaning of Article 239
of the Customs Code or 'special situations within the meaning of Article 13 of
Regulation No 1430/79.
- 90.
- It considers that the Commission failed to take sufficient account of the flagrant
breaches by the Argentine authorities and the Commission of their obligations
concerning the application and supervision of the Hilton quota.
- 91.
- Both Article 13 of Regulation No 1430/79 and Article 239 of the Customs Code
constitute general equitable provisions designed to cover situations other than those
which arose most often in practice and for which special provision could be made
when Regulation No 1430/79 and the Customs Code were adopted (Joined Cases
244/85 and 245/85 Cerealmangimi and Italgrani v Commission [1987] ECR 1303,
paragraph 10, and C-446/93 SEIM [1996] ECR I-73, paragraph 41).
- 92.
- The applicant alleges that both the Argentine authorities and the Commission
failed to comply with their obligations.
Obligations allegedly not fulfilled by the Argentine authorities
- 93.
- The applicant claims that, under the implementing regulations, the Argentine
authorities were required to issue certificates of authenticity guaranteeing the origin
of the products at issue. Those certificates should have been issued by an issuing
body with all the guarantees necessary to ensure the proper operation of the Hilton
quota.
- 94.
- Since they were the subject of an international agreement signed by the
Community, the guarantees provided by the Argentine authorities as regards the
drawing up of certificates of authenticity form part of the Community legal order.
The applicant, as an importer, was therefore entitled to assume that they would be
respected.
- 95.
- The applicant criticises the Argentine authorities inter alia for (1) designating a new
body empowered to issue certificates of authenticity in 1991, thus creating confusion
as to the respective powers of the old and the new bodies, (2) providing
slaughterhouses with blank, unnumbered certificates of authenticity, (3) failing to
issue forms printed on watermarked paper, which made falsification easier, (4)
failing to check the certificates of authenticity for quantity and conformity of
signature when the goods were exported, and (5) failing to check that the meat
was, in fact, Hilton beef.
Obligations allegedly not discharged by the Commission
- 96.
- The applicant claims that the Council entrusted the Commission with the task of
properly organising and monitoring the operation of the Hilton quota and, in
particular, laying down in the implementing regulations, provisions guaranteeing the
nature, origin and source of the goods.
- 97.
- Three obligations arise from this main duty. According to the applicant, the
Commission should, first, have ensured that the undertakings given by the
Argentine authorities concerning the issue of certificates of authenticity were
respected (see, for example, Article 2(5) and Articles 3 and 4 of Regulation No
3884/90 of 27 December 1990, cited above), which it failed to do. Second, it should
have involved the Member States to as great an extent as possible in monitoring
the system. Third, it was itself obliged to ensure that the import system was
respected, in accordance with the principle of good administration and the duty of
care.
- 98.
- The applicant claims, inter alia, that the Commission failed to forward to the
national authorities the names and specimen signatures of the persons empowered
to issue certificates of authenticity. Nor did it publish those details in the Official
Journal of the European Communities. Finally, it failed to inform the national
authorities of the serial numbers of the certificates of authenticity which should
have been notified to it by the Argentine authorities.
- 99.
- Those failures prevented the competent national authorities from effectively
checking the validity of the certificates of authenticity when the goods were
imported. In the majority of cases, the falsifications could have been detected by
simply comparing the signatures.
- 100.
- Furthermore, the Commission itself failed properly to monitor imports of Hilton
beef. Both the Argentine authorities and the competent authorities of the Member
States provided the Commission every 10 days or at the latest, after 14 days, with
information concerning the quantities of Hilton beef exported and imported
respectively with certificates of authenticity. On the basis of those lists, the
Commission would have been able to carry out a regular comparison of the
quantities exported from Argentina with a certificate of authenticity and the
quantities placed in free circulation in the Community. However, it failed to do so.
- 101.
- Furthermore, in 1989 it was already able to establish that the quota was being
exceeded to a significant extent. If it had investigated those irregularities at that
stage, it would have been possible to prevent the importation of excess quantities
linked to the falsification of the certificates of authenticity in 1991 and 1992. Its
lack of care at the time is confirmed by the fact that it did not react to suspicions
concerning irregularities which, according to the Director of the Zollkriminalamt
Köln (Customs Fraud Office, Cologne), already existed in 1985.
- 102.
- The failure by the Commission and the Argentine authorities to comply with those
obligations constitutes either a circumstance within the meaning of Article 239 of
the Customs Code, or a special situation within the meaning of Article 13 of
Regulation No 1430/79, which should result in remission of the import duties.
- 103.
- Commercial risk does not encompass the falsifications at issue in the present case.
The infringements attributable to the Argentine authorities and the Commission
are, individually and as a whole, so serious that they far exceed such a risk. The
judgment in Van Gend & Loos and Expeditiebedrijf Wim Bosman v Commission,
cited above, cannot be applied to the present case for several reasons. First,
falsification of certificates of authenticity was made possible as a result of those
infringements. Second, even by exercising the greatest care, the applicant would
have been unable to protect itself against falsification by exporters. Third, it was
entitled to assume that the certificates of authenticity were valid.
- 104.
- It is also incorrect to claim, with reference to Article 904(c) of Regulation No
2454/93, that expectations as to the validity of a certificate of authenticity were not
protected. That provision simply states that import duties will not be remitted if
the only ground in support of the application is the presentation of documents
subsequently found to be forged or falsified even where such documents were
presented in good faith. In any event, that is not the case here, since the applicant
has relied on several other grounds. In that context the Commission incorrectly
relies on the judgment in Case 827/79 Acampora [1980] ECR 3731.
- 105.
- The rules at issue only granted the Commission a margin of assessment, and not
a discretion (Van Gend & Loos and Expeditiebedrijf Wim Bosman v Commission,
cited above, paragraph 17). That margin of assessment should be applied very
restrictively in the present case since the circumstances relied on by the applicant
constitute, inter alia, infringements attributable to the Commission.
- 106.
- In response to the Commission's allegation in its defence that the second condition
in Article 13 of Regulation No 1430/79 was not satisfied, the applicant claims that
it is a new plea which should, as such, be rejected.
- 107.
- In any event, it denies that there was any obvious negligence on its part. It
considers that it was not able to check the validity of the certificates of authenticity.
Since the certificates bore a stamp and were signed, there was no doubt as to their
authenticity. The possibility of falsifications in Argentina had not even been
mentioned at the material time. Moreover, the agency which acted as the
applicant's intermediary in Argentina was in no way involved in lodging the
applications or the issue of the certificates of authenticity.
- 108.
- The applicant's trade experience does not mean that it has an obligation to seek
out and detect falsified documents. As regards the transfers to an account in the
Netherlands, it is customary, in export trade, for sums to be paid into a foreign
account specified by the supplier. On that basis, therefore, the conclusion could
not have been reached that the goods were accompanied by a falsified certificate
of authenticity.
- 109.
- The United Kingdom claims that the Commission committed an error of law by
considering that Article 13 of Regulation No 1430/79 was not applicable or, in the
alternative, that it used the discretion granted to it under that provision in a
manifestly erroneous manner.
- 110.
- The contested decision is undoubtedly vitiated, since the Commission failed to take
sufficient account of the fact that it had itself contributed to the applicant's
problems. The reasoning and the conclusions in the contested decision are
manifestly incorrect inasmuch as the Commission owed a duty to traders to detect
fraud and had failed to discharge its duty of supervision under the implementing
regulations.
- 111.
- In view of the responsibility assumed by the Commission in supervising and
monitoring the quota, and its failure to comply with its obligations in the exercise
of that responsibility, there was no legal justification for the refusal to grant
remission. The effect of that refusal was to penalise wholly innocent traders, which
is directly contrary to the general equitable purpose of Article 13 of Regulation No
1430/79.
Arguments of the defendant
- 112.
- The Commission contends that it had good reason to consider that the facts in the
present case did not constitute a special situation justifying remission of the import
duties.
- 113.
- It refers to the judgments in Case C-250/91 Hewlett Packard France [1993] ECR
I-1819, paragraph 46) and in Joined Cases C-153/94 and C-204/94 Faroe Seafood
and Others [1996] ECR I-2465, paragraph 83) and claims that the conditions set out
in Article 13 of Regulation No 1430/79 must be assessed in the light of Article 5(2)
of Regulation No 1697/79.
- 114.
- It is clear that remission of import duties is justified only if the three cumulative
conditions set out in that provision are satisfied: the duties must not have been
collected as a result of an error made by the competent authorities, the person
liable must have acted in good faith that is to say, he could not reasonably have
detected the error made by the competent authorities and he must have observed
all the provisions laid down by the rules in force as far as his customs declaration
is concerned (see also Article 220(2)(b) of the Customs Code). In that context,
contrary to the opinion of the applicant, those two provisions are altogether
comparable since they pursue the same aim (Hewlett Packard France, cited above,
paragraph 46), or are even interchangeable (Case T-75/95 Günzler Aluminium
[1996] ECR II-497, paragraph 55).
- 115.
- Those conditions must be interpreted strictly in order to ensure the uniform
application of Community law (Case C-348/89 Mecanarte [1991] ECR I-3277,
paragraph 33).
- 116.
- In the present case, the competent authorities did not make any error within the
meaning of Article 5(2) of Regulation No 1697/79. The legitimate expectations of
the person liable attract protection only if the competent authorities themselves
created the basis for his expectations. The error must be attributable to acts of the
competent authorities (Hewlett Packard France, paragraph 16, Faroe Seafood and
Others, paragraph 91, and Mecanarte, paragraph 23). That is not the case where
the competent authorities have been misled by incorrect declarations by the
exporter whose validity they do not have to check or assess.
- 117.
- That approach also follows from Article 4(2)(c) of Regulation No 3799/86 and
Article 904(c) of Regulation No 2454/93. According to those provisions, the
presentation in good faith of falsified documents does not in itself constitute a
special circumstance justifying remission. The fact that the German customs
authorities initially accepted the certificates of authenticity as valid could not have
led the applicant to entertain legitimate expectations (Faroe Seafood and Others,
cited above, paragraph 93).
- 118.
- The Commission points out that it is clear from the case-law, on the one hand, that
the Community does not have to bear the adverse consequences of the wrongful
acts of the suppliers of its nationals and, on the other, that in calculating the
benefits from trade in goods likely to enjoy tariff preferences, a prudent trader
aware of the rules must be able to assess the risks inherent in the market which it
is considering and accept them as normal trade risks (Acampora, paragraph 8, and
Pascoal & Filhos, paragraph 59, cited above). In claiming that the Argentine
authorities have a 'duty to guarantee, the applicant is thus wrongly attempting to
avoid the consequences of that case-law.
- 119.
- The grounds of challenge relied on by the applicant are not such as to eliminate
or restrict the commercial risk to which it is exposed (see also Van Gend & Loos
and Expeditiebedrijf Wim Bosman v Commission, cited above, paragraphs 16 and
17). The sole aim of the system of supervision was to ensure that only meat
imported within the quotas benefited from the exemption from levies. As regards
the obligation to guarantee the origin of the goods and the competent authority's
obligation to provide guarantees as to the proper operation of the rules at issue,
those obligations cannot be considered a guarantee enjoyed by the importer against
any risk of falsification. The Commission was therefore under no obligation vis-à-vis traders.
- 120.
- The Commission's conduct in supervising the use of the Hilton quota, which is
criticised by the applicant, cannot be considered to be a special situation within the
meaning of the relevant rules. The Commission expressly rejects the allegations
that it was itself responsible for enabling certificates of authenticity to be falsified.
Nor is there any causal link between its conduct and the origin of the import levies.
- 121.
- In response to the allegations that it failed to do all that it could to prevent
irregularities, the Commission also contends that under the system in force during
the period in question, it was not informed of the number of certificates of
authenticity issued by the Argentine authorities until the end of the calendar year.
Therefore, any excess over the quotas could only have been detected towards the
end of the year in question or at the beginning of the following year, and could no
longer have been prevented.
- 122.
- Furthermore, a comparison would not have been easy. On the one hand, exports
did not necessarily take place at the same time as the notification was made by the
Argentine authorities. On the other, the indication on the certificate of the
anticipated importing Member State was not binding, meaning that goods were
often imported into a Member State other than that indicated on the certificate.
- 123.
- Quotas were indeed exceeded in 1989. However, that could be explained by
confusion with certificates of authenticity relating to other imports of meat. When
the Commission received information, in 1993, concerning falsification of
certificates of authenticity, it reacted immediately. There can therefore be no
question of gross negligence on its part.
- 124.
- In the absence of error by the competent authorities, therefore, the first of the
three cumulative conditions set out in Article 5(2) of Regulation No 1697/79 (see
paragraph 113 above) is not satisfied.
- 125.
- The second condition, namely that the person liable acted in good faith, is not
satisfied either. Contrary to what the applicant claims, the 17th and 21st recitals
in the preamble to the contested decision already mention lack of care on the
applicant's part.
- 126.
- According to the Commission, the falsification of the certificates of authenticity
could have been detected if the applicant had examined them carefully. Theapplicant had obtained the original certificates of authenticity through its agency
in Argentina. If there was any doubt as to their validity, it had a duty to ascertain
that they were valid (Hewlett Packard France, paragraph 24, and Faroe Seafood and
Others, paragraph 100, cited above).
- 127.
- The Commission has doubts as to the accuracy of the applicant's claim that it had
no possibility at all of checking the validity of the certificates. First, it points out
that the applicant was represented in Argentina by an agency. Next, having regard
to its trade experience as an importer of beef and its familiarity with the quota
system in force, the applicant was in a position to take steps to prevent the use of
falsified certificates of authenticity.
- 128.
- Finally, the Commission points out that the applicant made several transfers to a
company established in the Netherlands, a subsidiary of an Argentine company
which has now disappeared. Admittedly, the suppliers may have wished for
payment to be made to foreign bank accounts. However, it is unusual for an
importer to pay for goods delivered by an exporter by transfers to an account held
by another person, when it is not certain that the recipient of the payment actually
exists. Furthermore, the falsifications were, to a great extent, attributable to the
undertaking Manufactura de Carnes Vacunas, one of the applicant's largest
suppliers (see paragraph 23 above). In view of those observations, the Commission
is doubtful whether the applicant exercised all due care.
Findings of the Court
- 129.
- The applicant has claimed that there were not only 'circumstances within the
meaning of Article 239 of the Customs Code, but also, in the alternative, 'special
situations within the meaning of Article 13 of Regulation No 1430/79, which would
have justified the Commission granting remission of the import duties.
- 130.
- Since Article 13 of Regulation No 1430/79 was in force at the material time (see
paragraph 53 above) it is necessary, in the context of this plea, to establish whether
the contested decision was adopted in breach of that provision.
- 131.
- Article 13(1), as amended by Regulation No 3069/86, provides that 'import duties
may be repaid or remitted in special situations other than those referred to in
Sections A to D, which result from circumstances in which no deception or obvious
negligence may be attributed to the person concerned.
- 132.
- According to settled case-law, Article 13 constitutes a general equitable provision
designed to cover situations other than those which arose most often in practice
and for which special provision could be made when Regulation No 1430/79 was
adopted (Cerealmangini and Italgrani v Commission, cited above, paragraph 10, and
SEIM, cited above, paragraph 41). It is intended to apply, inter alia, where the
circumstances characterising the relationship between a trader and the
administration are such that it would be inequitable to require the trader to bear
a loss which it normally would not have incurred (Case 58/86 Coopérative Agricole
d'Approvisionnement des Avirons [1987] ECR 1525, paragraph 22).
- 133.
- The Commission must therefore assess all the facts in order to determine whether
they constitute a special situation within the meaning of that provision (see, to that
effect, Case 160/84 Oryzomyli Kavallas and Others v Commission [1986] ECR 1633,
paragraph 16). Although it enjoys a margin of assessment in that respect (France-Aviation v Commission, cited above, paragraph 34), it is required to exercise that
power by actually balancing, on the one hand, the Community interest in ensuring
that the customs provisions are respected and, on the other, the interest of the
importer acting in good faith not to suffer harm beyond normal commercial risk.
Consequently, when examining whether an application for remission is justified, it
cannot simply take account of the conduct of importers. It must also assess the
impact of its own conduct on the resulting situation even if it is at fault.
- 134.
- Provided that the two conditions laid down in Article 13 of Regulation No 1430/79
are satisfied, namely the existence of a special situation and the absence of any
deception or obvious negligence by the person concerned, the person liable is
entitled to reimbursement or remission of the import duties, since to hold otherwise
would deprive that provision of its effectiveness (see, as regards the application of
Article 5(2) of Regulation No 1697/79, Mecanarte, cited above, paragraph 12, Case
C-292/91 Weis [1993] ECR I-2219, paragraph 15, and Faroe Seafood and Others,
cited above, paragraph 84).
- 135.
- Therefore, the Court must reject the Commission's argument that remission of
import duties is justified only if the three cumulative conditions laid down in Article
5(2) of Regulation No 1697/79 are satisfied, namely that the duties must not have
been collected as a result of an error made by the competent authorities, that the
person liable must have acted in good faith that is to say, he could not reasonably
have detected the error made by the competent authorities and that he must
have observed all the provisions laid down by the rules in force as far as his
customs declaration is concerned.
- 136.
- Although the Court held that Article 13 of Regulation No 1430/79 and Article 5(2)
of Regulation No 1697/79 pursue the same aim, namely to limit the post-clearance
payment of import or export duties to cases where such payment is justified and
is compatible with a fundamental principle such as the protection of legitimate
expectations (Hewlett Packard France, cited above, paragraph 46), it did not
consider that the two provisions could be equated.
- 137.
- It simply considered that the question whether the error by the competent
authorities was capable of being detected within the meaning of Article 5(2) of
Regulation No 1697/79 was linked to the existence of obvious negligence or
deception within the meaning of Article 13 of Regulation No 1430/79, and that the
conditions laid down by the latter provision must therefore be assessed in the light
of those laid down in Article 5(2).
- 138.
- Even if the competent authorities did not make an error within the meaning of
Article 5(2) of Regulation No 1697/79, therefore, that does not automatically
preclude the person concerned from relying, in the alternative, on Article 13 of
Regulation No 1430/79 and claiming that there is a special situation justifying
remission of the import duties.
- 139.
- The Commission's argument disregards the purpose of the two provisions. Whilst
Article 5(2) of Regulation No 1697/79 is intended to protect the legitimate
expectation of the person liable that all the information and criteria on which the
decision whether or not to proceed with recovery of customs duties is based are
correct (Faroe Seafood and Others, cited above, paragraph 87), Article 13 of
Regulation No 1430/79 constitutes a general equitable provision, as recalled above.
That article would cease to be a general equitable provision if the conditions laid
down in Article 5(2) had to be satisfied in every case.
- 140.
- In order to determine whether the Commission committed a manifest error of
assessment by considering that the conditions laid down in Article 13 of Regulation
No 1430/79 were not satisfied in the present case, it is first necessary to examine
the second condition concerning the absence of any deception and obvious
negligence by the applicant and, therefore, the first condition concerning the
existence of a special situation.
Absence of any deception and obvious negligence
- 141.
- The applicant is not accused of any deception. In response to a question from the
Court, the Commission expressly confirmed at the hearing that it was not claiming
that the applicant was in any way involved in the falsifications at issue.
- 142.
- Furthermore, it cannot be held that there was any obvious negligence either.
Indeed, it is apparent both from the documents on the file and the oral arguments
before the Court that the applicant was not aware of the falsifications or
irregularities in the certificates of authenticity until the Commission initiated
investigations in 1993 (see paragraph 18 above).
- 143.
- As regards the manner in which the certificates were falsified, it should be noted
that, as a general rule, two versions of the certificate of authenticity were drawn up
in respect of any given export, both bearing the same serial number. In accordance
with Article 4 of the two implementing regulations, both bore a stamp, apparently
from the same competent issuing authority, and a signature.
- 144.
- They contained identical information concerning the date and place of issue, the
Argentine exporter, the recipient in the Community and the vessel on which the
goods were to be exported. The only difference in the information on the two
versions related to the weight indicated, as the Commission confirmed in a response
to a question from the Court. The version entitled 'duplicado, which was
intended for the Argentine authorities, showed a substantially lower weight than the
original certificate delivered to the importer. Whilst the 'duplicado version
referred to weights in the order of 600 to 2 000 kg, the weight indicated on the
original, which corresponded to the quantities actually exported to the Community,
was in the region of 10 000 kg. In that respect, the Court notes that, during the
period in question, Hilton beef was normally transported in containers with a
capacity of approximately 10 000 kg.
- 145.
- Furthermore, at the hearing, the Commission cast doubt on the identity of the
signatures on the two versions of the certificate.
- 146.
- However, a comparison of the signatures in question shows that they are, at first
sight, identical, or at least very similar. Likewise, the signatures on the certificates
of authenticity delivered to the applicant seem at first sight to correspond to the
specimen signatures of the persons empowered to sign which were sent to the
Commission by the Argentine authorities in 1991 and 1992. In any event, since the
Commission had not circulated those specimen signatures to the Member States or
the importers, nor had it published them in the Official Journal, the applicant had
no effective means of checking the validity of the signature on the certificate of
authenticity upon receipt.
- 147.
- According to the summary report drawn up by the Commission, 'the fact that the
forms were not numbered in advance, that the number of forms was not taken into
account and that exporters completed the forms themselves encouraged
falsification of the documents. In addition, according to the 1993 report, during a
period of several months following the replacement of the Junta Nacional de
Carnes by the Secretaría de Agricultura, Ganadería y Pesca as the competent body
for issuing certificates of authenticity (see paragraph 17 above), some traders took
advantage of the fact that the powers and procedures were not clearly set out by
abusing the provisions in force.
- 148.
- Various details in the documents before the Court suggest that the competent
Argentine authority drew up a certificate bearing a serial number for a low weight,
filed that certificate and delivered a certificate bearing the same number, together
with the stamps and signature, but no mention of the quantity, to some Argentine
abattoirs. The abattoirs were then able to insert higher quantities corresponding
to the tonnage actually exported. The summary report also concluded that
employees of the Argentine customs and veterinary services must have 'closed their
eyes when the goods were being loaded.
- 149.
- As regards the applicant's agency in Argentina, whose task consisted of gathering
offers from the various abattoirs and forwarding them to the applicant for approval,
it is apparent from the oral argument before the Court that it did not have access
to the 'duplicado version showing lower weights. It only had the certificates
accompanying the goods which had, at first sight, been drawn up in due and proper
form.
- 150.
- In response to the written questions of the Court, the applicant provided an extract
from the statements made by the owner of the agency to the Landgericht (Regional
Court), Hamburg. According to that document the owner was, at the time,
'entirely unaware of the origin and use of falsified and/or forged certificates of
origin by ... Hilton beef exporters, or 'of the existence of periods of conjecture
as regards falsification.
- 151.
- In view of all the foregoing, it must be acknowledged that the applicant's failure to
detect the falsifications at issue was reasonable, since it was unable to carry out
such a check.
- 152.
- As regards the methods of payment relied on by the Commission in support of the
view that the applicant had acted in bad faith, it appears from the statements made
by the owner of the agency to the Landgericht, Hamburg, that the transfers were
made by the applicant after the agency had confirmed by fax that it had obtained
all the documents for the purpose of dispatch in the prescribed manner.
- 153.
- Furthermore, the applicant has established that the transfers to the accounts in the
Netherlands were not exceptional. It maintained, without being contradicted by the
Commission, that it is customary in international trade for an exporter in a third
country to ask for payment to be made to accounts in the Netherlands, Switzerland
or the United States.
- 154.
- Finally, two observations must be made concerning the prices paid by the applicant
for the meat at issue.
- 155.
- In the first place, it is not disputed that, since no import levies were payable under
the Hilton quota, the prices paid for the Hilton beef were higher than those for
beef sold without a certificate of authenticity. In that respect, the applicant
claimed, without being contradicted by the Commission, that the difference between
the prices for the two sorts of meat corresponded approximately to the levies
payable on the importation of beef other than Hilton beef.
- 156.
- Second, the Commission did not challenge the applicant's claim that the prices paid
for the beef imported with certificates of authenticity later found to be falsified
were of approximately the same level as those paid for Hilton beef accompanied
by valid certificates.
- 157.
- Those findings demonstrate the good faith of the applicant at the time of the
contested imports.
- 158.
- Although it is true that an initial division of the quotas between Argentine abattoirs
was published in Argentina, the system of dividing the Hilton quota was not
transparent to third parties. According to the summary report, there was a quota
market on which the various abattoirs could purchase unused quotas; that was
acknowledged by the Commission at the hearing. It has therefore not been
established that the applicant was in a position to ascertain the precise quotas
allocated to its contractual partners.
- 159.
- Since the manner in which it entered into purchase contracts and carried out the
importations at issue formed part of standard trade practice, it was for the
Commission to prove that the applicant was guilty of obvious negligence.
- 160.
- The Commission did not even attempt to furnish such proof. Indeed, in a response
to a question raised by the Court to that effect at the hearing, it merely repeated
the allegations contained in the contested decision, that the applicant had failed to
act with due care by failing to take all necessary precautions with regard to its
contractual partners and its intermediaries in Argentina and by not itself checking
the circulation of the certificates of authenticity received by it.
- 161.
- In view of all the foregoing, it must be held that the applicant's conduct did not
constitute obvious negligence, within the meaning of Article 13 of Regulation No
1430/79.
Existence of a special situation
- 162.
- According to the relevant rules and settled case-law, the presentation, for the
purpose of obtaining preferential tariff treatment of goods declared for free
circulation, of documents subsequently found to be falsified, does not in itself
constitute a special situation justifying remission of import duties even where such
documents were presented in good faith (Articles 4(2)(c) of Regulation No 3799/86
and 904(c) of Regulation No 2454/93; Van Gend & Loos and Expeditiebedrijf Wim
Bosman v Commission, cited above, paragraph 16, Acampora, cited above,
paragraph 8, and Pascoal & Filhos, cited above, paragraphs 57 to 60).
- 163.
- In the present case, however, the applicant does not merely claim that, at the time
of the importations at issue, it presented falsified documents in good faith. It bases
its application for remission primarily on serious failures by the Commission and
the Argentine authorities in supervising application of the Hilton quota, which
facilitated the falsifications.
- 164.
- It follows that, contrary to the Commission's contention, the aforementioned
provisions do not preclude remission of the import duties.
- 165.
- Pursuant to Article 155 of the Treaty and the principle of good administration, the
Commission was obliged to ensure the proper application of the Hilton quota and
make sure that it was not exceeded (see, to this effect, Case 175/84 Krohn v
Commission [1987] ECR 97, paragraph 15).
- 166.
- That duty of supervision also derived from the implementing regulations. Article
6(1) of both regulations provided that: 'The Member States shall communicate to
the Commission, in respect of each period of 10 days, not later than 15 days after
that period, the quantities of products referred to in Article 1 that have been put
into free circulation, broken down by their country of origin and combined
nomenclature code. Such a requirement would have been meaningless if it had
not been coupled with the obligation, on the Commission, to check that the quota
was properly applied.
- 167.
- Furthermore, it is apparent from the 1993 report that the Argentine authorities
sent to the Commission, on a more or less regular basis, the lists of certificates of
authenticity issued during a period of 10 days before they were sent, setting out,
inter alia, the Argentine exporter, the recipient in the Community and the gross and
net weights. The Argentine authorities also sent the names and specimen
signatures of Argentine officials empowered to sign the certificates of authenticity.
- 168.
- It must therefore be held that only the Commission had or was in a position to
request the necessary data in order effectively to monitor use of the Hilton quota.
In those circumstances, the obligation to ensure that the quota was properly
applied was even greater.
- 169.
- It is clear from the documents on the file and the hearing before the Court that
serious failures by the Commission in monitoring application of the Hilton quota
occurred during the period at issue.
- 170.
- In the first place, for 1991 and 1992, the Commission failed properly and regularly
to check the information provided by the Argentine authorities concerning the
volumes of goods exported under the quota and the certificates of authenticity
issued against equivalent information sent to it by the Member States.
- 171.
- Even supposing that such verification was not possible in so far as the Member
States' lists did not indicate the serial numbers of the certificates of authenticity in
question, the Commission should have asked the Member States to provide that
information. In reply to a question from the Court at the hearing, it acknowledged
that the existence of the fraud could probably have been detected much earlier, if
it had regularly compared the data relating to the importations.
- 172.
- In reality, importations were only monitored by the Commission in an approximate
and incomplete manner.
- 173.
- Thus, it was only at the beginning of the following year that the Commission
summarised on lists the information which had been sent to it so that differences
in quantities and, where appropriate, any excess over the quotas could only be
detected at that time. For that reason, in any given year, it was unable to inform
the Member States that the quota for that year might have been exhausted.
- 174.
- Furthermore, the lists were only handwritten. The Commission would have been
able to monitor the data provided much more effectively if it had processed them
by computer. Moreover, without any particular difficulty, it could have overcome
the problems linked to the fact that the indication, on the certificates of
authenticity, of the anticipated importing Member State was not binding, so that
the goods could be exported to a Member State other than that shown on the
certificate.
- 175.
- Second, as already noted at paragraph 146 above, the Commission omitted to
circulate to the Member States the specimen signatures of the Argentine officials
authorised to sign the certificates of authenticity or to publish them in the Official
Journal. The national authorities were therefore denied a potentially effective
means of detecting falsifications in good time. It is clear from the documents
before the Court that the Commission itself acknowledged, at the meeting of the
group of experts on 2 October 1995, that that omission constituted an error on its
part.
- 176.
- Third, the Commission failed to react to findings that the Hilton quota had
previously been exceeded.
- 177.
- In that respect, it is clear from the summary report that the investigation carried
out in Argentina in 1993 revealed that more than 460 certificates of authenticity
presented in 1991 and 1992 had been falsified. Consequently, during those two
years, 4 500 tonnes of beef entered the Community with forged certificates and the
uncollected levies on those imports amounted to some ECU 18 million.
- 178.
- It is not disputed that the Commission had become aware of a comparable excess
over the quota as early as 1989. At the hearing, it acknowledged that, in that year
alone, the Hilton quota had been exceeded by more than 3 000 tonnes.
- 179.
- The failure to react to that finding constitutes a serious infringement by the
institution. The irregularities detected should have drawn its attention to the need
to carry out more detailed checks. From that time onwards, it could therefore have
carried out investigations in order to establish the precise reasons why the quotas
were being exceeded.
- 180.
- If the Commission had used more effective methods of monitoring at the
appropriate time in order to overcome the problems linked to the fact that the
quota was exceeded in 1989, the falsifications which took place in 1991 and 1992
would probably not have been able to reach the level subsequently detected, that
is to say, approximately 10% of the volume of the Hilton quota. The losses
incurred by the traders could therefore have been limited for certain, as, moreover,
the Commission admitted at the hearing.
- 181.
- Finally, it was only after the investigation carried out in 1993 that the Commission
took measures in order to improve and strengthen the system of monitoring
application of the Hilton quota by adopting Regulation (EC) No 212/94 of 31
January 1994 laying down detailed rules for the application of the import
arrangements provided for by Council Regulations (EC) No 129/94 and (EC) No
131/94 for high-quality beef and frozen buffalo meat (OJ 1994 L 27, p. 38).
- 182.
- From now on, pursuant to Article 4(1)(c) of Regulation No 212/94, the authority
which issues certificates of authenticity in Argentina must undertake to
communicate to the Commission each week any information enabling it to verify
the entries made on those certificates. Furthermore, pursuant to Article 5(1)(c) of
that regulation, the competent authorities for the management of the organisation
of the markets in the Member States may only issue an import licence after they
are satisfied that all information on the certificate of authenticity corresponds to
the information received by the Commission through the weekly communications
on the matter. Those new rules thus make regular comparisons of import
declarations and export declarations possible.
- 183.
- At the hearing, the Commission admitted that, if those new rules had been brought
into force after it found that the quota had been exceeded in 1989, it would have
been possible to prevent, or at least to limit the extent of, the excess over the
quotas in 1991 and 1992.
- 184.
- Thus, failure to implement an effective monitoring system in sufficient time,
coupled with the other failures in respect of supervision of the Hilton quota in 1991
and 1992, created conditions which enabled the falsifications to persist and to reach
the scale observed in the present dispute.
- 185.
- It has already been pointed out (see paragraph 155 above) that the market price
for Hilton beef sold with a valid certificate of authenticity was normally significantly
higher than that of meat sold without a certificate; the difference in price was
explained by the fact that levies in the order of DM 10 per kilogram had to be paid
in respect of beef imported outside the Hilton quota (see paragraph 11 above).
- 186.
- It has also been established (see paragraph 156) that the prices paid by the
applicant for the beef imported with falsified certificates of authenticity were of
approximately the same level as those charged for Hilton beef accompanied by
valid certificates.
- 187.
- The applicant therefore claims that, in financial terms, because the purchase price
for Hilton beef is higher, even for meat imported with falsified certificates, it has
already paid a price which, broadly speaking, includes the contested import levy;
that is not disputed by the Commission.
- 188.
- It is true that Community law does not normally protect the expectations of a
person liable as to the validity of a certificate of authenticity, which is found to have
been forged when subsequently checked, since such a situation forms part of
commercial risk (Van Gend & Loos and Expeditiebedrijf Wim Bosman v
Commission, cited above, paragraph 17, Acampora, cited above, paragraph 8,
Mecanarte, cited above, paragraph 24, and Pascoal & Filhos, cited above,
paragraphs 59 and 60).
- 189.
- However, in the present case, the falsifications made it possible for the Hilton
quota to be exceeded to a significant extent only because the Commission had
failed to discharge its duty of supervising and monitoring application of the quota
in 1991 and 1992. In those circumstances, the falsifications, which, moreover, were
carried out in a very professional way, exceeded the normal commercial risk which
must be borne by the applicant, in accordance with the case-law cited in the
preceding paragraph.
- 190.
- Since Article 13 of Regulation No 1430/79 is intended to be applied when
circumstances characterising the relationship between a trader and the
administration are such that it would be inequitable to require the trader to bear
a loss which he normally would not have incurred (Coopérative Agricole
d'Approvisionnement des Avirons, cited above, paragraph 22), it must be held that,
in view of all the foregoing, the circumstances of the present case amount to a
special situation within the meaning of that provision and justify remission of the
import duties.
- 191.
- The Commission thus committed a manifest error of assessment in considering that
failures in monitoring the application of the quota could not in any circumstances
constitute a special situation.
- 192.
- It follows from the foregoing that, like the second plea, the third plea alleging
infringement of Article 13 of Regulation No 1430/79 is well founded.
- 193.
- Consequently, without it being necessary to rule on the fourth and fifth pleas
alleging breach of the obligation to state reasons and breach of the principle of
proportionality, respectively, the contested decision must be annulled.
Costs
- 194.
- Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs, if they have been asked for in the successful party's
pleadings. Since the Commission has been unsuccessful, it must be ordered to pay
the costs in accordance with the form of order sought by the applicant.
- 195.
- The United Kingdom, which has intervened, must bear its own costs pursuant to
the first subparagraph of Article 87(4) of the Rules of Procedure.
On those grounds,
THE COURT OF FIRST INSTANCE (First Chamber)
hereby:
1. Annuls the Commission's decision of 20 December 1995 addressed to the
Federal Republic of Germany and concerning an application for remission
of import duties;
2. Orders the Commission to pay the costs;
3. Orders the United Kingdom of Great Britain and Northern Ireland to bear
its own costs.
SaggioVesterdorf
Moura Ramos
|
Delivered in open court in Luxembourg on 19 February 1998.
H. Jung
A. Saggio
Registrar
President