61989J0209

++++

Free movement of goods - Customs duties - Charges having equivalent effect to a customs duty - Payment for services rendered during customs inspections - Charge payable by each of the undertakings benefiting simultaneously from the service - Amount disproportionate to the cost of the service - Not permissible

(EEC Treaty, Arts 9, 12, 13 and 16)

A Member State fails to fulfil its obligations under Articles 9, 12, 13 and 16 of the Treaty by requiring from each undertaking individually, where services are rendered simultaneously to several undertakings in connection with the completion of customs formalities in intra-Community trade, payment of an amount which is, in certain cases, disproportionate to the cost of the service rendered to traders, since as many charges are levied as there are undertakings involved and the charge payable by them may therefore exceed the actual cost of the inspections.

In Case C-209/89

Commission of the European Communities, represented by Sergio Fabro, a member of its Legal Department, acting as Agent, with an address for service in Luxembourg at the office of Guido Berardis, a member of its Legal Department, Wagner Centre, Kirchberg,

applicant,

v

Italian Republic, represented by Professor Luigi Ferrari Bravo, Head of the Legal Department at the Ministry of Foreign Affairs, acting as Agent, assisted by Pier Giorgio Ferri, Avvocato dello Stato, with an address for service in Luxembourg at the Italian Embassy, 5, rue Marie-Adélaïde,

defendant,

APPLICATION for a declaration that, by requiring from each undertaking individually, where services are rendered simultaneously to several undertakings in connection with the completion of customs formalities in intra-Community trade, payment of an amount disproportionate to the cost of the services provided, the Italian Republic has failed to fulfil its obligations under Article 9 et seq., and in particular Articles 12, 13 and 16 of the EEC Treaty,

THE COURT,

composed of: O. Due, President, G.F. Mancini, G.C. Rodríguez Iglesias and M. Díez de Velasco (Presidents of Chambers), Sir Gordon Slynn, C.N. Kakouris, R. Joliet, F.A. Schockweiler and P.J.G. Kapteyn, Judges,

Advocate General: M. Darmon,

Registrar: D. Louterman, Principal Administrator,

having regard to the Report for the Hearing and further to the hearing on 7 November 1990,

after hearing the Opinion of the Advocate General delivered at the sitting on 9 January 1991,

gives the following

Judgment

1 By an application lodged at the Court Registry on 6 July 1989, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that by requiring from each undertaking individually, where services are rendered simultaneously to several undertakings in connection with the completion of customs formalities in intra-Community trade, payment of an amount disproportionate to the cost of the services provided, the Italian Republic has failed to fulfil its obligations under Articles 9, 12, 13 and 16 of the EEC Treaty.

2 The Italian Ministerial Orders of 29 July 1971 (GURI, Official Gazette of the Italian Republic, No 193 of 31 July 1971) and of 30 January 1979 (GURI No 35 of 5 February 1979) establish a system of charges payable by undertakings where customs formalities are completed outside the customs area or outside normal office hours. Those orders provide that, where services are rendered simultaneously to several undertakings, "the staff is entitled to a single payment, commensurate with the nature and duration of the most highly-paid service provided, on the understanding that each undertaking is under an obligation to pay separately the charges due for the services which it has requested, independently of the charges paid by the other undertakings". The abovementioned Order of 30 January 1979 makes it clear, however, that where the service required concerns a single consignment of goods belonging to several owners, the service is deemed to have been provided in respect of a single undertaking. Finally, it is undisputed that, in calculating the charges payable by undertakings, the Italian Republic reckons any fraction of an hour' s work as a full hour.

3 According to the Commission, it appears from the rules at issue that, in the case of services rendered simultaneously to several undertakings and with the exception of goods shipped under the system of groupage, the Italian Republic demands payment of an amount disproportionate to the cost of the services provided, in that it levies as many charges as there are undertakings concerned and payment is not calculated on the basis of the time actually employed by staff in carrying out customs formalities. The Commission has brought an action against the Italian Republic pursuant to Article 169 of the Treaty on the ground that the pecuniary charge thus imposed on traders constitutes a charge having equivalent effect to a customs duty, which is prohibited by Article 9 et seq. of the Treaty.

4 Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the course of the procedure and the submissions and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

5 The Italian Government challenges the Commission' s analysis on the ground, first of all, that annual total receipts from services provided to traders outside normal working conditions by customs officials are not sufficient to cover the costs which the State has to incur in order to provide those services. Next, it emphasizes that the salaries of customs officials are calculated, as is the case for all civil servants in Italy, on the basis of an indivisible hourly rate and that to divide the charge payable in proportion to the time employed in carrying out a formality for the benefit of several undertakings would yield derisory sums, which would ultimately be absorbed by the administrative costs of such a calculation. Furthermore, to levy the charge only on a single undertaking would be an impracticable solution. Finally, the Italian Government submits that the hourly charge demanded by the customs authorities represents approximately one third of the cost of an hour' s overtime, so that the charge payable by traders is in fact equivalent to a standard charge for twenty minutes' work. In view of the average duration of a customs operation, that method of calculation is said to comply with the principle of proportionality.

6 As a preliminary point, the Court observes that the alleged failure of the Italian Government to fulfil its obligation has negligible consequences in practice, which the Commission itself did not deny at the hearing. However, as the Court has consistently held (see the judgments in Case 415/85 Commission v Ireland [1988] ECR 3097, at paragraph 9, and in Case 416/85 Commission v United Kingdom [1988] ECR 3127, at paragraph 9), an action against a Member State for failure to fulfil its obligations is objective in nature and the bringing of such an action before the Court is a matter for the Commission in its entire discretion. The Court must therefore consider whether or not the Member State in question has failed to fulfil its obligations as alleged.

7 In order to establish whether the action brought by the Commission is well founded, it should be emphasized, first of all, that, as the Court has frequently held (see, for example, the judgment in Case C-137/89 Commission v Italy [1990] ECR I-847), the justification for the prohibition of charges having equivalent effect to customs duties lies in the fact that pecuniary charges, however small, applied by reason of the crossing of a frontier, constitute an obstacle to the movement goods, in that they artificially increase the price of imported or exported goods in relation to domestic products. Accordingly, any pecuniary charge, whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier, constitutes a charge having equivalent effect to a customs duty within the meaning of Articles 9, 12, 13 and 16 of the Treaty.

8 In the present case, it is common ground that the charge provided for by the Italian legislation is imposed on goods by reason of the fact that they cross a frontier and is additional to the transport costs, thus increasing the price of the goods transported.

9 According to the case-law of the Court, however, such a charge falls outside the definition of a charge having equivalent effect to a customs duty if it constitutes the consideration for a service actually rendered to traders and is of an amount commensurate with that service (see, for example, the judgment in Cases 46/76 Bauhuis v Netherlands [1977] ECR 5, 132/78 Denkavit [1979] ECR 1923, and 132/82 Commission v Kingdom of Belgium [1983] ECR 1649).

10 In that regard, the Court has already accepted the compatibility with the Treaty rules of fees charged in connection with the completion of customs formalities, on condition that their amount does not exceed the actual cost of the operations in respect of which they are charged (judgment in Case 89/76 Commission v Netherlands [1977] ECR 1355, at paragraph 16). In its judgment in Case C-111/89 (Bakker Hillegom [1990] ECR I-1735, at paragraph 12), the Court pointed out that that condition was satisfied only where there was a direct link between the amount of the fee and the cost of the actual inspection in respect of which the fee was charged. The Court added (in the same judgment, at paragraph 13) that such a link was present where the amount of the fee was calculated on the basis of the duration of the inspection, the number of persons required, the cost of materials, overheads or any other similar factors.

11 Furthermore, in its aforesaid judgment in Bakker, at paragraph 13, the Court stated that the details it had given as to the factors which may be taken into account in calculating the amount of the fee did not preclude a fixed-rate assessment of inspection costs, such as, for example, a fixed hourly rate.

12 So far as concerns the contested Italian rules, it should be noted at once that it is common ground that in the circumstances a service is rendered to undertakings, and secondly that, having regard to the abovementioned case-law, the principle of a fixed-rate assessment of the charge cannot be called in question.

13 As regards the Italian authorities' method of calculating the rate, however, it should be noted that the rules at issue, which impose on each undertaking individually, where services are rendered simultaneously to several traders, the whole of the fixed-rate charge corresponding to an hour' s work, even where the inspection takes considerably less time, are liable to entail, in certain circumstances, payment of an amount in excess of the actual cost of the operation in question, as that concept has been defined by the Court in the aforesaid case-law. The method of calculation applied in Italy may lead, for example, to five traders each being required to pay the charge per hour for a total of thirty minutes' work.

14 It follows therefore from the figures which the Italian Government has itself put forward in relation to the hourly rate and the cost of inspection that, in certain cases, the total payment demanded from the undertakings concerned may exceed, at times by a considerable amount, the total cost which, according to the Italian Government, the service provided entails for the State' s finances.

15 Even on the assumption that the Italian Government is correct in stating that the hourly rate charged represents on average only one third of the cost of the service provided, the amount of the charges payable by traders exceeds, as the Advocate General has pointed out in paragraph 14 of his Opinion, the cost of the inspection in all cases in which the service is rendered simultaneously to more than three undertakings.

16 In those circumstances, the Italian rules at issue lead, in certain cases, to the imposition of an amount disproportionate to the service rendered to traders, in that it entails the levying of as many charges as there are undertakings involved and the charge payable by them exceeds, therefore, the actual cost of the inspections.

17 As for the argument put forward by the Italian Government that it would be impracticable to divide the charge payable in proportion to the time employed in carrying out an operation for the benefit of several undertakings, and impossible to demand payment of that charge from a single undertaking, it is sufficient to recall that, as the Court has consistently held, a Member State may not plead difficulties of a practical nature in order to justify a failure to comply with the obligations laid down by Community law.

18 The Italian Government further maintains in its defence that in any event the operations at issue are of marginal significance. They are specific operations concerning several small batches packed together in bulk consignments or awaiting shipment, in respect of which action by the customs authorities outside normal working hours or outside the customs area could scarcely be sought on grounds of urgency.

19 That argument cannot be accepted. Even on the assumption that the operations referred to in this case are of minor importance, it should be noted, as the Commission has rightly pointed out, that a Member State is guilty of a failure to fulfil its obligations under the Treaty regardless of the frequency or the scale of the circumstances complained of.

20 It follows from the foregoing considerations that the Italian Republic has failed to fulfil its obligations under Articles 9, 12, 13 and 16 of the Treaty by requiring from each undertaking individually, where services are rendered simultaneously to several undertakings in connection with the completion of customs formalities in intra-Community trade, payment of an amount disproportionate to the cost of the services provided.

Costs

21 21 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Italian Republic has failed in its submissions, it must be ordered to pay the costs.

On those grounds,

THE COURT

hereby:

1. Declares that the Italian Republic has failed to fulfil its obligations under Articles 9, 12, 13 and 16 of the Treaty by requiring from each undertaking individually, where services are rendered simultaneously to several undertakings in connection with the completion of customs formalities in intra-Community trade, payment of an amount disproportionate to the cost of the services provided.

2. Orders the Italian Republic to pay the costs.