Keywords
Summary

Keywords

++++

1. Origin of goods ° Preferential customs system for products originating in and coming from the Faroe Islands ° Products imported free of duty on the strength of certificates of origin issued by the Faroese authorities ° Certificates called into question by the conclusions of a Community inquiry ° Conclusions challenged by the Faroese authorities ° Committee on Origin not consulted ° Post-clearance recovery of import duties ° Whether permissible ° Possibility of refraining from recovery action ° Conditions ° Criteria for assessment

(Council Regulations Nos 802/68, 2051/74 and 1697/79; Commission Regulation No 3184/74)

2. Origin of goods ° Preferential customs system for products originating in and coming from the Faroe Islands ° Originating products ° Criteria for definition ° "Faroe Island vessels" and "crew" of such vessels

(Council Regulation No 2051/74, Annex IV; Commission Regulation No 3184/74, Annex I)

3. Origin of goods ° Preferential customs system for products originating in and coming from the Faroe Islands ° Processing of raw materials of Faroese origin on Faroese territory ° Benefit of preferential treatment ° Condition ° Physical separation from products coming from non-member countries ° Levying of a reduced amount of duties if separation not carried out ° Conditions for this to be permissible ° Burden of proof

(Council Regulation No 2051/74; Commission Regulation No 3184/74)

4. Own resources of the European Communities ° Post-clearance recovery of import or export duties ° Exceeding of time-limit ° Issue of a demand relating partly to an irrecoverable sum ° Invalidity of the demand as a whole ° Application of national law ° Limits ° Obligation on the authorities intending to take recovery action to rule first on the possibility of waiver or to refer the matter to the Commission ° None

(Council Regulation No 1697/79, Arts 2(1) and 5(2); Commission Regulation No 2164/91, Art. 4)

5. Own resources of the European Communities ° Post-clearance recovery of import or export duties ° Action relating to sums not recoverable from the purchasers of imported products ° Infringement of the right to property or the principle of proportionality ° None

(Council Regulation No 1697/79

Summary

1. Regulation No 2051/74 on the customs procedure applicable to certain products originating in and coming from the Faroe Islands, Regulation No 3184/74 concerning the definition of the concept of "originating products" and methods of administrative cooperation for the application of that procedure, and Regulation No 1697/79 on the post-clearance recovery of import or export duties are to be interpreted as meaning that the customs authorities of a Member State may, on the basis of the conclusions of a Community mission of enquiry, proceed with the post-clearance recovery of customs duties on goods imported from the Faroe Islands, even if, in reliance on EUR.1 certificates issued in good faith by the competent Faroese authorities, they did not levy customs duties at the time of importation; even if the Faroese authorities dispute the conclusions of the mission of enquiry in so far as they relate to the interpretation of the relevant Community customs legislation and maintain that the certificates are in force; and even if the issues disputed were not referred to the Committee on Origin established pursuant to Regulation No 802/68 on the common definition of the concept of the origin of goods.

In that regard, the fact that the competent Faroese authorities certified in the EUR.1 certificates that the goods originated there or the fact that the competent authorities of the importing Member State initially accepted that the origin of the goods was as declared in those certificates does not constitute an "error made by the competent authorities" within the meaning of Article 5(2) of Regulation No 1697/79, which lays down the conditions for waiver. Even though the Faroese authorities are competent authorities within the meaning of the Community rules, they cannot be held responsible in such circumstances for an error within the meaning of that provision. It is otherwise, however, where the exporter has declared that the goods are of Faroese origin in reliance on the actual knowledge by the competent Faroese authorities of all the facts necessary for applying the customs rules in question, and where, notwithstanding such knowledge, those authorities have raised no objection concerning the statements made in the exporter' s declarations, thereby basing their certification of the Faroese origin of the goods on a misinterpretation of the rules on origin.

In order to determine whether the error which may have been made by the Faroese authorities could not reasonably have been detected by the persons liable within the meaning of Article 5(2), account must be taken, in particular, of the nature of the error, the professional experience of the traders concerned and the degree of care which they exercised. It is for the national court to establish whether, on the basis of that interpretation, the criteria for determining the extent to which a possible error by the competent Faroese authorities was capable of being detected by the persons liable are satisfied in the particular circumstances of the case.

Article 5(2) applies to a situation in which the person liable has complied with all the requirements laid down by the Community rules, and by any national rules supplementing or transposing them, so far as his customs declaration is concerned, even if he has, in good faith, supplied the competent authorities with inaccurate or incomplete information, where that was the only information which he might reasonably be expected to possess or obtain.

2. The criteria for defining "Faroe Island vessels" set out in Annex IV to Regulation No 2051/74 on the customs procedure applicable to certain products originating in and coming from the Faroe Islands and Explanatory Note 4 of Annex I to Regulation No 3184/74 concerning the definition of the concept of "originating products" and methods of administrative cooperation for the application of that procedure are to be applied conjunctively.

The word "crew", to which one of those criteria refers, does not include persons not forming part of the vessel' s normal complement who are engaged in addition thereto on a particular voyage or part of a voyage to work as trainees or as unskilled hands below decks, particularly for training purposes, in order to comply with a joint venture agreement entered into with an undertaking in a non-member country for the purpose of enabling the vessel to fish inside the exclusive economic zone of that country, whether those persons are paid either by the operator of the vessel or by the undertaking in the non-member country.

3. In order to enjoy preferential customs treatment pursuant to Regulation No 2051/74, raw materials of Faroese origin within the meaning of Regulation No 3184/74 must be kept physically separate during their processing in a Faroese factory from products coming from non-member countries. In the absence of such separation, however, the customs authorities of the importing Member State may, with the agreement of the Commission, decide in the interests of fairness to levy duty on imports derived from the factory in question only in an amount equal to that which would have been payable if the origins of the goods in the consignment in question had been proportionally correspondent to the origins of the raw materials brought into the factory in the year in which the import occurred.

It follows from Regulations Nos 2051/74 and 3184/74 that, where shrimps and prawns of Faroese origin have been processed in a Faroese factory which also processes shrimps and prawns coming from non-member countries, it is for the exporter to show proof, by producing all appropriate supporting documents, that the shrimps and prawns of Faroese origin were physically separated from those of other origins. In the absence of such proof, the shrimps and prawns can no longer be regarded as being of Faroese origin, with the result that the EUR.1 certificate and the preferential tariff must be regarded as having been wrongly granted.

4. Under Community law as it now stands, it is for national law to determine in what circumstances a post-clearance demand for payment of a global sum, part of which is irrecoverable for exceeding the three-year time-limit laid down by Article 2(1) of Regulation No 1697/79 on the post-clearance recovery of import or export duties, must be considered void in its entirety, subject, however, to the limits imposed by Community law, namely that the application of national law may not render the system for collecting Community charges and dues less effective than that for collecting national charges and dues of the same kind, or render virtually impossible or excessively difficult the implementation of Community legislation.

The competent authorities of the importing Member State are not required, before issuing post-clearance demands for payment of customs duties, to determine whether it is possible to refrain from taking action for recovery pursuant to Article 5(2) of Regulation No 1697/79.

Article 4 of Regulation No 2164/91 laying down provisions for the implementation of Article 5(2) of Regulation No 1697/79 is to be interpreted as meaning that the competent authorities of the importing Member State are not required to refer a matter to the Commission for a decision as to the possibility of refraining from taking action for post-clearance recovery of customs duties if they do not consider that the conditions laid down in Article 5(2) are satisfied.

5. The requirements arising from the right to property and the principle of proportionality do not prevent the competent authorities from taking action for the post-clearance recovery of import duties where the conditions for applying Article 5(2) of Regulation No 1697/79, which provides for the possibility of waiver by the authorities, are not fulfilled, even though the duties are no longer recoverable from the purchaser of the imported products and the amount in question is a large one.

It is the responsibility of professional traders to make the necessary arrangements in their contractual relations to guard against the risks of such recovery, and even the fact that large amounts may be claimed in that respect comes within the category of professional risks which such traders undertake