61979J0827

1 . COMMON CUSTOMS TARIFF - SYSTEM OF GENERALIZED PREFERENCES IN FAVOUR OF DEVELOPING COUNTRIES - ORIGIN OF THE GOODS - VERIFICATION - NECESSITY

( REGULATION NO 1371/71 OF THE COMMISSION )

2 . COMMON CUSTOMS TARIFF - SYSTEM OF GENERALIZED PREFERENCES IN FAVOUR OF DEVELOPING COUNTRIES - ORIGIN OF THE GOODS - VERIFICATION - METHODS - VERIFICATION OF CERTIFICATES OF ORIGIN AFTER IMPORTATION - NEGATIVE OUTCOME - RECOVERY OF DUTIES NOT PAID - LAWFULNESS

( REGULATION NO 1371/71 OF THE COMMISSION , ART . 13 )

1 . THE SYSTEM OF GENERALIZED PREFERENCES SUCH AS THOSE PROVIDED FOR BY REGULATION NO 1371/71 IS BASED ON THE PRINCIPLE OF THE UNILATERAL GRANT BY THE COMMUNITY OF TARIFF ADVANTAGES IN FAVOUR OF PRODUCTS ORIGINATING IN CERTAIN DEVELOPING COUNTRIES WITH THE AIM OF FACILITATING THE FLOW OF TRADE WITH THOSE COUNTRIES . THE BENEFIT OF THAT PREFERENTIAL SYSTEM IS THUS LINKED TO THE ORIGIN OF THE GOODS AND THE VERIFICATION OF THAT ORIGIN IS THEREFORE A NECESSARY ELEMENT OF THE SYSTEM .

2.THE CUSTOMS AUTHORITIES OF AN IMPORTING MEMBER STATE MAY , PURSUANT TO ARTICLE 13 OF REGULATION NO 1371/71 OF THE COMMISSION OF 30 JUNE 1971 AND THE GENERAL STRUCTURE OF THAT REGULATION , AFTER HAVING PERMITTED WITHOUT RESERVE THE FINAL IMPORTATION OF GOODS AND THE APPLICATION OF THE PREFERENTIAL TARIFF TREATMENT GRANTED TO PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES :

1 . REQUIRE THE STATE BENEFITING FROM THE EXPORTATION TO VERIFY THE CERTIFICATE OF ORIGIN ON FORM A RELATING TO THOSE GOODS ;

2.THEN , IF THE OUTCOME OF THAT VERIFICATION IS NEGATIVE , DEMAND PAYMENT OF THE DUTY WHICH WAS NOT PAID AT THE TIME OF IMPORTATION .

IN CASE 827/79

REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE CORTE SUPREMA DI CASSAZIONE , FIRST CIVIL CHAMBER , FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN

AMMINISTRAZIONE DELLE FINANZE

AND

CIRO ACAMPORA

ON THE INTERPRETATION OF REGULATION ( EEC ) NO 1371/71 OF 30 JUNE 1971 ON THE DEFINITION OF THE CONCEPT OF ORIGINATING PRODUCTS FOR THE PURPOSE OF THE TARIFF PREFERENCES GRANTED BY THE EEC TO CERTAIN PRODUCTS OF DEVELOPING COUNTRIES ( JOURNAL OFFICIEL L 146 OF 1 JULY 1971 , P . 1 ) AND IN PARTICULAR ARTICLE 13 THEREOF ,

1 BY ORDER DATED 27 JUNE 1979 RECEIVED AT THE COURT ON 21 DECEMBER 1979 THE ITALIAN CORTE SUPREMA DI CASSAZIONE REFERRED A QUESTION FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY ON THE INTERPRETATION OF REGULATION NO 1371/71 OF THE COMMISSION OF 30 JUNE 1971 ON THE DEFINITION OF THE CONCEPT OF ORIGINATING PRODUCTS FOR THE PURPOSE OF THE TARIFF PREFERENCES GRANTED BY THE EEC TO CERTAIN PRODUCTS OF DEVELOPING COUNTRIES ( JOURNAL OFFICIEL L 146 OF 1 JULY 1971 , P . 1 ) AND IN PARTICULAR ARTICLE 13 THEREOF .

2 THAT QUESTION HAS BEEN RAISED IN PROCEEDINGS BETWEEN , ON THE ONE HAND , AN UNDERTAKING WHICH IMPORTED INTO ITALY FROM HONG KONG VARIOUS LOTS OF TRANSISTOR RADIOS BETWEEN 1 JULY 1971 AND 2 FEBRUAR 1972 AND AFTER DECLARING THEM TO BE ' ' ORIGINATING PRODUCTS ' ' OBTAINED CUSTOMS CLEARANCE ON PAYMENT OF DUTIES BASED ON THE TARIFF PREFERENCES AND ON THE OTHER HAND THE ITALIAN AMMINISTRAZIONE DELLE FINANZE WHICH , AFTER CARRYING OUT PURSUANT TO ARTICLE 13 OF REGULATION NO 1371/71 SUBSEQUENT VERIFICATION REVEALING THAT THE PRODUCTS WERE NOT ' ' ORIGINATING PRODUCTS ' ' , REQUIRED THE IMPORTER TO PAY THE APPROPRIATE DUTIES UNPAID ON IMPORTATION .

3 THE IMPORTER RESISTED THE ORDER TO PAY ON THE GROUND THAT THE VERIFICATION OF ORIGIN OF THE GOODS TOOK PLACE AFTER IMPORTATION WHEN IT NO LONGER HAD CONTROL OF THEM . THE PROCEEDINGS CAME BEFORE THE TRIBUNALE DI GENOVA AND THEN THE CORTE D ' APPELLO , GENOVA , WHICH BOTH FOUND THE VERIFICATION COULD NOT BE SUBSEQUENT TO CUSTOMS CLEARANCE OF THE GOODS AND THEIR ADMISSION WITHOUT RESERVATION TO THE FAVOURABLE SCHEME PROVIDED BY THE COMMUNITY RULES . THE AMMINISTRAZIONE DELLE FINANZE APPEALED TO THE CORTE SUPREMA DI CASSAZIONE WHICH REFERRED THE FOLLOWING QUESTION TO THE COURT :

' ' MAY AN IMPORTING STATE , PURSUANT TO ARTICLE 13 OF REGULATION ( EEC ) NO 1371/71 OF 30 JUNE 1971 - AFTER HAVING PERMITTED , WITHOUT RESERVE , THE FINAL IMPORTATION OF GOODS IN APPLICATION OF THE PREFERENTIAL TARIFF TREATMENT GRANTED TO PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES - REQUIRE THE STATE BENEFITING FROM THE EXPORTATION TO VERIFY THE CERTIFICATE OF ORIGIN ON FORM A RELATING TO THOSE GOODS , AND THEN , IF THE OUTCOME OF THE VERIFICATION IS NEGATIVE , DEMAND PAYMENT OF THE DUTY WHICH WAS NOT PAID AT THE TIME OF IMPORTATION?

' '

4 IN ORDER TO ANSWER THAT QUESTION WHICH BASICALLY RELATES TO THE INTERPRETATION OF ARTICLE 13 OF REGULATION NO 1371/71 , IT IS NECESSARY FIRST TO LOOK FOR THE AIM OF THE COMMUNITY REGULATION AND THEN EXAMINE THE FUNCTIONING OF THE SYSTEM OF VERIFICATION OF THE ORIGIN OF THE PRODUCTS IN QUESTION WHICH IT ESTABLISHED FOR THE ATTAINMENT OF THE OBJECTIVES PURSUED BY IT .

5 THE SYSTEM OF GENERALIZED PREFERENCES SUCH AS THOSE PROVIDED FOR BY REGULATION NO 1371/71 IS BASED ON THE PRINCIPLE OF THE UNILATERAL GRANT BY THE COMMUNITY OF TARIFF ADVANTAGES IN FAVOUR OF PRODUCTS ORIGINATING IN CERTAIN DEVELOPING COUNTRIES WITH THE AIM OF FACILITATING THE FLOW OF TRADE WITH THOSE COUNTRIES . THE BENEFIT OF THAT PREFERENTIAL SYSTEM IS THUS LINKED TO THE ORIGIN OF THE GOODS AND THE VERIFICATION OF THAT ORIGIN IS THEREFORE A NECESSARY ELEMENT OF THE SYSTEM . IN THE ACTUAL ORGANIZATION OF THAT VERIFICATION THE REGULATION SEEKS TO AVOID , FOR PRACTICAL REASONS , SYSTEMATIC VERIFICATION OF THE ORIGIN OF PRODUCTS , WHICH WOULD EXCESSIVELY DELAY CUSTOMS TRANSACTIONS . TO THAT END ARTICLE 13 PROVIDES FOR TWO KINDS OF SUBSEQUENT VERIFICATION OF CERTIFICATES OF ORIGIN NAMELY AT RANDOM OR WHENEVER THE CUSTOMS AUTHORITIES RESPONSIBLE HAVE ' ' REASONABLE DOUBT AS TO THE AUTHENTICITY OF THE DOCUMENT OR THE ACCURACY OF THE INFORMATION REGARDING THE TRUE ORIGIN OF THE GOODS IN QUESTION OR THEIR COMPONENTS ' ' . THE SECOND SUBPARAGRAPH OF ARTICLE 13 ( 2 ) PROVIDES THAT IF THE CUSTOMS AUTHORITIES DECIDE IN CASE OF DOUBT TO SUSPEND APPLICATION OF THE PROVISIONS ON TARIFF PREFERENCES WHILE AWAITING THE RESULTS OF THE VERIFICATION , THEY ' ' SHALL OFFER TO RELEASE THE GOODS TO THE IMPORTER SUBJECT TO ANY PRECAUTIONARY MEASURES JUDGED NECESSARY ' ' .

6 THE LAST PROVISION WHICH IN PRACTICE CAN APPLY ONLY WHEN THE GOODS ARE STILL UNDER CUSTOMS CONTROL APPEARS TO BE AN EXCEPTION TO THE GENERAL RULE LAID DOWN IN ARTICLE 6 OF THE REGULATION TO THE EFFECT THAT ' ' ORIGINATING PRODUCTS WITHIN THE MEANING OF THIS REGULATION SHALL ENJOY THE BENEFITS OF THE PROVISIONS ON TARIFF PREFERENCES IN THE COMMUNITY ON SIMPLE PRODUCTION OF A CERTIFICATE OF ORIGIN ON FORM A , SIGNED BY THE CUSTOMS AUTHORITIES OR BY OTHER GOVERNMENTAL AUTHORITIES IN THE COUNTRY BENEFITING FROM THE EXPORT AND SUBJECT TO THE LATTER COUNTRY ' S ASSISTING THE COMMUNITY THROUGH THE CUSTOMS AUTHORITIES OF THE MEMBER STATES IN VERIFYING THE AUTHENTICITY AND REGULARITY OF THE CERTIFICATES ' ' .

7 NORMALLY SUBSEQUENT VERIFICATION AT RANDOM CAN THEREFORE TAKE PLACE ONLY AFTER PRODUCTION OF THE CERTIFICATE AND CUSTOMS CLEARANCE WHICH AUTOMATICALLY FOLLOWS SUCH PRODUCTION WHEN THERE HAS BEEN NOTHING TO CAST INITIAL DOUBT ON THE AUTHENTICITY OF THE CERTIFICATE . MOREOVER , FOR THE PURPOSE OF SUBSEQUENT VERIFICATION OF THE CERTIFICATES OF ORIGIN ON FORM A , ARTICLE 30 OF THE REGULATION PROVIDES THAT ' ' THE COMPETENT GOVERNMENTAL AUTHORITIES OF THE EXPORTING COUNTRY MUST KEEP THE EXPORT DOCUMENTS , OR COPIES OF CERTIFICATES USED IN PLACE THEREOF , FOR TWO YEARS ' ' , WHICH NECESSARILY IMPLIES THE POSSIBILITY OF EFFECTIVE VERIFICATION DURING THAT TIME .

8 IT MUST BE RECOGNIZED THAT THE POSSIBILITY OF CHECKING AFTER IMPORTATION WITHOUT THE IMPORTER ' S HAVING BEEN PREVIOUSLY WARNED MAY CAUSE HIM DIFFICULTIES WHEN IN GOOD FAITH HE HAS THOUGHT HE WAS IMPORTING GOODS BENEFITING FROM TARIFF PREFERENCES IN RELIANCE ON CERTIFICATES WHICH , UNBEKNOWN TO HIM , WERE INCORRECT OR FALSIFIED . IT MUST HOWEVER BE POINTED OUT THAT IN THE FIRST PLACE THE COMMUNITY DOES NOT HAVE TO BEAR THE ADVERSE CONSEQUENCES OF THE WRONGFUL ACTS OF THE SUPPLIERS OF ITS NATIONALS , IN THE SECOND PLACE THE IMPORTER CAN ATTEMPT TO OBTAIN COMPENSATION FROM THE PERPETRATOR OF THE FRAUD AND IN THE THIRD PLACE , 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 HE IS CONSIDERING AND ACCEPT THEM AS NORMAL TRADE RISKS .

9 IN CONCLUSION , THE ANSWER TO THE QUESTION PUT SHOULD BE THAT THE CUSTOMS AUTHORITIES OF AN IMPORTING MEMBER STATE MAY , PURSUANT TO ARTICLE 13 OF REGULATION NO 1371/71 OF THE COMMISSION OF 30 JUNE 1971 AND THE GENERAL STRUCTURE OF THAT REGULATION , AFTER HAVING PERMITTED WITHOUT RESERVE THE FINAL IMPORTATION OF GOODS AND THE APPLICATION OF THE PREFERENTIAL TARIFF TREATMENT GRANTED TO PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES :

1 . REQUIRE THE STATE BENEFITING FROM THE EXPORTATION TO VERIFY THE CERTIFICATE OF ORIGIN ON FORM A RELATING TO THOSE GOODS ;

2.THEN , IF THE OUTCOME OF THAT VERIFICATION IS NEGATIVE , DEMAND PAYMENT OF THE DUTY WHICH WAS NOT PAID AT THE TIME OF IMPORTATION .

10 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES AND THE ITALIAN GOVERNMENT , WHICH HAVE SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE AND AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , IN THE NATURE OF A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,

THE COURT ( SECOND CHAMBER ),

IN ANSWER TO THE QUESTION SUBMITTED BY THE ITALIAN CORTE SUPREMA DI CASSAZIONE , HEREBY RULES :

THE CUSTOMS AUTHORITIES OF AN IMPORTING MEMBER STATE MAY , PURSUANT TO ARTICLE 13 OF REGULATION NO 1371/71 OF THE COMMISSION OF 30 JUNE 1971 , AFTER HAVING PERMITTED WITHOUT RESERVE THE FINAL IMPORTATION OF GOODS AND THE APPLICATION OF THE PREFERENTIAL TARIFF TREATMENT GRANTED TO PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES :

1 . REQUIRE THE STATE BENEFITING FROM THE EXPORTATION TO VERIFY THE CERTIFICATE OF ORIGIN ON FORM A RELATING TO THOSE GOODS ;

2.THEN , IF THE OUTCOME OF THAT VERIFICATION IS NEGATIVE , DEMAND PAYMENT OF THE DUTY WHICH WAS NOT PAID AT THE TIME OF IMPORTATION .