1.

The purpose of the proceedings instituted before the Tribunal Fiscal Aduaneiro (Customs Court), Oporto, is to review the legality of a post-clearance recovery of import duties which were not required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties.

2.

The first subparagraph of Article 2(2) of Regulation (EEC) No 1697/79 provides that:

‘Where the competent authorities find that all or part of the amount of import duties or export duties legally due on goods entered for a customs procedure involving the obligation to pay such duties has not been required of the person liable for payment, they shall take action to recover the duties not collected.’

That provision lays down the general principle of the obligation to recover duties that are legally payable but have not been collected. The justification for it is given in the preamble to the regulation, according to which, because of the ‘essentially economic nature of the import duties or export duties in force in the Community’ (first recital), failure to collect the correct duties has prejudicial consequences for the Community economy.

3.

There are two exceptions to that general rule: where it is impossible for the customs authorities to effect post-clearance recovery (Article 5(1) of Regulation No 1697/79) and where the customs authorities may refrain from effecting post-clearance recovery (Article 5(2) of that regulation).

According to the latter provision,

‘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 for his part having 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.

The decision not to proceed with recovery is a matter for the Member States or the Commission of the European Communities, depending on whether the amount of duties is less or more than ECU 2000 (Articles 2 and 4 of Regulation (EEC) No 1573/80).

5.

The plaintiff in the main proceedings, the importing company Mecanarte — Metalúrgica da Lagoa Lda (‘Mecanarte’) purchased from its supplier in the Federal Republic of Germany, Schmolz & Bickenbach, a consignment of 42 sets of hot-rolled steel sheets and, for the purpose of putting the goods into circulation, submitted to the Portuguese customs authorities a certificate (form EUR 1 No D 790072) issued in Düsseldorf on 18 February 1986, indicating that the goods had originated in the Federal Republic of Germany.

6.

Since the goods were declared as coming from the Federal Republic of Germany, the Community regime was applied to them and they were classified under tariff headings 73 13 230100 j and 73 13 260000 t and were imported free of customs duties.

7.

By letter of 29 March 1988, the Düsseldorf customs supervisory office informed the Portuguese Directorate General for Customs that certificate EUR 1 No D 790072 had been declared invalid on the ground that it had been improperly issued by Schmolz & Bickenbach and that the steel sheet products described in the certificate had come from the German Democratic Republic and not from the Federal Republic of Germany.

8.

After receiving that information, the Oporto customs office proceeded, through its Serviço de Conferência Final, to effect post-clearance recovery of duties in the sum of ESC 3611599 from the importer, Mecanarte.

9.

Mecanarte instituted proceedings before the Tribunal Fiscal Aduaneiro, Oporto, for the annulment of that notice of assessment, which had been confirmed by a decision of the Oporto Director of Customs which at the same time rejected Mecanarte's request that the file be forwarded to the Commission of the European Communities so that the latter might decide to waive post-clearance recovery of the duties in question.

10.

The Oporto court considered that the action before it raised certain questions concerning the interpretation and validity of Article 5(2) of Regulation No 1697/79 and the interpretation of Article 4 of Regulation No 1573/80.

11.

Consequently, the Tribunal Fiscal Aduaneiro, Oporto, by orders of 16 October and 7 November 1989, which were received at the Court Registry on 15 November 1989, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling under Article 177 of the EEC Treaty:

12.

Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were lodged:

13.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided, pursuant to Article 95 of the Rules of Procedure, to assign the case to the Third Chamber and to open the oral procedure without any preparatory inquiry.

14.

The Portuguese Government, the Portuguese Ministério Público, the Council and the Commission all agree that the national authorities enjoy a circumscribed discretion under Article 5(2) of Regulation No 1697/79. Mecanarte does not express a definitive view on that question, but does not exclude the possibility that Article 5(2) of that regulation may grant the national authorities a discretionary power.

15.

(a) The Portuguese Government considers that Article 5 of Regulation No 1697/79 creates an exception to the general principle laid down in Article 2(1) of that regulation concerning the obligation to recover duties which are payable and have not been collected, in fulfilment of the principles of legal certainty and good faith on the part of the taxpayer. Respect for such values, the very ratio legis of the provision, is not consistent with the grant to the national authorities of the power to decide whether or not to recover the duties provided that the conditions laid down in that provision are fulfilled. The Portuguese Government states, in that connection, that in its judgment in Case 314/85 Foto-Frost [1987] ECR 4199, the Court of Justice considered that Article 5(2) had to be interpreted as meaning that, provided that all those conditions are fulfilled, the taxpayer is entitled to a waiver of recovery. If the taxpayer is entitled to a waiver of recovery of the duties, the national authorities have only a circumscribed discretion, in the view of the Portuguese Government, under Article 5(2). The use of the word ‘may’, in its view, is attributable to legislative drafting technique whereby Article 5(1) — ‘No action may be taken ... for recovery’ — is contrasted with Article 5(2) — ‘The competent authorities may refrain from taking action for the post-clearance recovery ....’ Paragraph 1 makes it legally impossible to effect post-clearance recovery, whilst paragraph 2 provides for two possibilities, one being that the national authorities may not effect recovery if the conditions laid down in that provision are fulfilled.

16.

According to the Portuguese Ministério Público, the ‘power’ referred to in Article 5(2) of Regulation No 1697/79 is to be regarded as limited, having regard, first, to the general obligation of post-clearance recovery laid down in Article 2 of that regulation and, secondly, to the right of the taxpayer to a waiver of post-clearance recovery where the conditions laid down in Article 5(2) are fulfilled.

17.

(b) The Council submits that the power granted to the authorities by Article 5(2) of Regulation No 1697/79 is limited to verification of the conditions required for a waiver of recovery. Those conditions are objective in character and the fulfilment of them can be checked by the persons concerned and if necessary be the subject of legal proceedings before the courts. In that regard, it seems unjustified, in the Council's view, to speak of a ‘discretionary power’ since the legality of the measures adopted by the competent authorities may, as regards the conditions laid down for waiver of recovery, be reviewed by the courts.

18.

The Council adds that the difference between the wording of paragraph 2 — ‘The competent authorities may refrain ...’ — and paragraph 1 — ‘No action may be taken ... for recovery’ — is due to the fact that the Council empowered the Commission to determine in whioh cases the first subparagraph of paragraph 12 is to be applied (see second subparagraph of paragraph 2).

19.

In the Council's view, that interpretation ensures observance of the principles of legal certainty and the protection of legitimate expectations, according to which Community legislation must be clear and predictable for the persons to whom it applies and, moreover, that interpretation was upheld by the Court of Justice in Case 314/85 Foto-Frost, above.

20.

In conclusion, the Council suggests that the Court reply as follows to the first question:

‘The first part of the first subparagraph of Article 5(2) of Council Regulation (EEC) No 1697/79 of 25 July 1979 lays down three precise conditions for the competent authorities to be entitled not to effect post-clearance recovery. That provision must therefore be interpreted as meaning that, provided that those conditions are all satisfied, the taxpayer is entitled to the waiver of recovery.’

21.

(c) The Commission refers to consistent decisions of the Court of Justice according to which Article 5(2) of Regulation No 1697/79 must be interpreted as meaning that where the three conditions laid down therein are fulfilled the taxpayer is ‘entitled to the waiver of the post-clearance recovery’ (judgments in Foto-Frost, above, Case 378/87 Top Hit [1989] ECR 1359 and Case 161/88 Binder [1989] ECR 2415). In the light of those decisions, the Commission considers that if the requirements laid down in Article 5(2) are fulfilled, the national authority loses any discretionary power as to whether to proceed with post-clearance recovery.

22.

(d) Mecanarte considers that there is no reason not to acknowledge that a discretionary power is granted by Article 5(2), since it must be exercised by a single entity, namely the Commission of the European Communities, throughout the area of the Community. That discretion is thus not absolute but, on the other hand, is clearly circumscribed in certain respects, by virtue, for example, of the obligation to satisfy in advance the conditions laid down in Article 5(2).

23.

(a) The Portuguese Government, the Portuguese Ministério Público, the Council and the Commission state that, by reason of the answer to the first question, the second question is devoid of purpose.

24.

The Council also states that, in any event, Article 5(2) does not infringe the principles mentioned by the national court since all economic agents are subject to the same rules and there is an obligation that the assessment of the facts should be verified by the Commission which, finally, takes a decision in that regard.

25.

(b) Mecanarte submits that there will be no intolerable discretionary power so long as the decision to effect or to waive post-clearance recovery remains a matter for the Commission. Thus, such an interpretation does not give rise to any risk of incompatibility with observance of the principles mentioned by the national court.

26.

(a) The Portuguese Government, the Portuguese Ministério Público and the Commission agree that the word ‘error’ used in Article 5(2) of Regulation No 1697/79 covers any error committed by the competent authorities themselves and is not limited to calculation or copying errors.

27.

They consider, however, with respect to the nature of errors that are relevant to post-clearance recovery, that only errors resulting from action actually taken by the national administration itself can be relied on as justification for non-recovery. All cases where officials of the administrations are themselves the victims of error committed by other must therefore be excluded. In such cases, no legitimate expectations can arise from conduct on the part of the administration since such expectations must in all cases be based on action taken by the public administration in full knowledge of the facts.

28.

(b) According to Mecanarte, the third question is closely linked with the good faith of the taxpayer. Mecanarte considers that if a taxpayer makes, in good faith, declarations which lead to an incorrect classification as a result of the customs authorities being misled, but without any intention on his part to bring about such an error, the right to a decision to waive recovery cannot be taken from him. In such cases, it is pointless to investigate whether or not the information which misled the authorities came from him.

29.

(c) The Council expresses no views on the question.

30.

(a) The Portuguese Government considers that ‘the competent authority of the Member State in which the error was committed which resulted in insufficient duty being collected’, expressly referred to in Articles 2 and 3 of Regulation No 1573/80, cannot be the one which proceeded, or should have proceeded, to effect recovery. The fact that Article 5(2) is in the nature of an exception to Article 2 of Regulation No 1697/79 precludes, in the view of the Portuguese Government, an extensive interpretation widening the scope of the error to include action by the customs authorities in the other Member State, namely the State of exportation.

31.

(b) The Portuguese Ministério Público, Mecanarte and the Commission agree, however, that errors relevant to the application of Article 5(2) include those committed either by the authorities responsible for post-clearance recovery themselves or by those of the Member State exporting the goods.

32.

According to Mecanarte, that follows from the simple fact that if the first customs office makes a mistake the second will automatically make the same mistake.

33.

The Commission submits that its interpretation in that regard is confirmed by Article 2 of Commission Regulation (EEC) No 2380/89 of 2 August 1989 (Official Journal L 225, p. 30) which, with effect from 1 September 1989, replaced Regulation No 1573/80 and makes it clear that the competent authority may be that of the Member State in which the error was committed or that of the Member State where it was discovered. Whilst pointing out that that clarification was not included among the provisions implementing Regulation No 1573/80, which applied when the decision was taken by the Portuguese authorities, the Commission emphasizes that it was not intended to change the meaning of Article 5(2) of Regulation No 1697/79 but rather to confirm it, by taking into account all errors on the part of national authorities, whether they actually committed the error or merely established its existence at the time of post-clearance recovery.

34.

(c) The Council expresses no views on the question.

35.

The Portuguese Government, the Portuguese Ministério Público, Mecanarte and the Commission agree that the last part of Article 5(2) of Regulation No 1697/79 applies in cases where the taxpayer has complied with all the legal requirements in force concerning the declaration, even where, in good faith, he has furnished incorrect or incomplete information to the competent authorities. The Council expresses no view on this question.

36.

(a) The Portuguese Government refers to the judgment of the Court of Justice in Foto-Frost, above, in which the Court emphasized that the relevant condition in Article 5(2) was fulfilled if the economic agent had correctly completed his customs declaration. According to the Portuguese Government, that condition may be fulfilled even where the taxpayer has, in good faith, provided the customs authorities with incorrect or incomplete information.

37.

(b) Mecanarte submits that the requirement of compliance with ‘all the provisions laid down by the rules in force’ is intended to ensure not only that the taxpayer acts diligently but also that any error giving rise to non-recovery of duties is not brought about by improper conduct on his part. It follows, according to Mecanarte, that where a taxpayer provides incorrect information but does so for reasons other than bad faith or negligence, he retains the right to exemption from payment.

38.

(c) The Commission states that good faith and compliance with ‘the provisions laid down by the rules in force as far as his customs declaration is concerned’ are two distinct conditions laid down by Article 5(2) and that they must be examined separately.

39.

As regards the requirement of observance of ‘the provisions laid down by the rules in force as far as his customs declaration is concerned’, the Commission refers to the ruling by the Court of Justice to the effect that such rules include both the Community rules and the national rules which supplement or implement them.

40.

Where goods are declared for entry into free circulation, as in the present case, the required information was clarified by Council Directive 79/695/EEC of 24 July 1979 and the directive implementing it, Commission Directive 82/57/EEC of 17 December 1981, which refer to a declaration of release for free circulation and the documents which must be appended to it.

41.

In the Commission's view, those requirements may not go beyond the information and documents that the declarant can reasonably have at his disposal and obtain, regardless of the customs procedure involved.

42.

As regards the taxpayer's good faith, the Commission considers that Article 5(2) would be deprived of any useful effect if the authority that committed or discovered the error were entitled to reject the application for non-recovery on the ground that the declarant had provided incorrect or incomplete information or documents in cases where that inaccuracy stemmed from the error itself or was not imputable to the declarant.

43.

(a) The Portuguese Government and the Portuguese Ministério Público consider that it is apparent from the combined provisions of Article 5(2) of Regulation No 1697/79 and of Articles 2 and 4 of the implementing regulation, No 1573/80, that the Community legislature did not envisage intervention by the Commission except in cases where the competent authorities entertained doubts about the non-recovery decision and in cases where the customs debts were of ECU 2000 or more. That reflects the need for legal certainty and uniform application of Article 5(2) and is justified by the size of the sum involved and by the repercussions thereof for the Community economy. According to the Portuguese Government, that interpretation is corroborated by Article 8 of Regulation No 1573/80, which provides for tacit rejection of an application for non-recovery if the Commission has not taken a decision within the legally prescribed period.

44.

(b) The Commission observes, first, that it is current practice in the Member States to refer to the Commission for decisions to be taken under Article 5(2) of Regulation No 1697/79 only where the amount to be recovered after clearance exceeds ECU 2000 and the application from the person concerned is regarded by the national administration as justified.

45.

The Commission considers that practice to be justified by the wording of Articles 2 and 3 of Regulation No 1573/80, which refer only to cases in which, all the requirements of Article 5(2) having been fulfilled, the national authority intends waiving post-clearance recovery, and lay down separate procedures depending on whether or not the amount to be recovered exceeds ECU 2000. The national authority may therefore make a ruling itself if it considers that the conditions for the protection of legitimate expectations are not fulfilled.

46.

Although Regulation No 1573/80 does not necessarily require such an interpretation, the latter nevertheless follows, in the Commission's view, from the purpose of granting to the Commission the power to adopt decisions, as is apparent in particular from the following two reasons.

47.

In the first place, the fact that the power of decision is reserved to the Commission in the economically most important cases shows the intention to ensure the uniform application of Community law. Such uniformity would be undermined if the national authorities continued to rely on national practices and rules for the interpretation of Community law, in particular with regard to the protection of legitimate expectations. The unity of Community law is particularly jeopardized in cases where an application for waiver of recovery is acceded to: the decision of the national authorities is almost always final since the person concerned does not object to it and the Commission does not become involved. On the other hand, the consequences for the unity of Community law of a decision to proceed with post-clearance recovery are lesser. Whilst it is not denied that the Member States may treat these cases in divergent ways, it is for the person affected to decide whether or not to seek an amendment of the decision and thus to ensure that uniform rules are applied to his case.

48.

In the second place, the Commission's power of decision lies in the fact that Article 5(2) of Regulation No 1697/79 deals with the non-collection of Community own resources. Since the Commission is the competent authority for implementation of the Community budget, it is understandable that it should be concerned to influence such decisions strongly. It follows, according to the Commission, that it is unnecessary to grant it a power of decision where the national authorities order post-clearance recovery.

49.

Furthermore, the Commission considers that its power of decision in this area must remain the exception, particularly since recourse to the Commission is much more costly than the procedure at national level. For that reason, the Commission has been endeavouring for some time, in the largest possible number of cases, to transfer its power of decision to the authorities of the Member States. That endeavour has, moreover, been reflected in the adoption of Regulation No 2380/89, which has replaced Regulation No 1573/80.

50.

The Commission therefore proposes replying to the sixth question that the power conferred on it by Article 4 of Commission Regulation No 1573/80 extends only to decisions to waive post-clearance recovery involving amounts exceeding ECU 2000.

51.

(c) By contrast, Mecanarte considers that the grant to the Commission of the power to decide as to both recovery and non-recovery is the only way of guaranteeing the uniform and even-handed exercise of that power in conformity with the Community rules on equal treatment as between citizens of the Member States.

52.

According to Mecanarte, the view that the recovery decision may be taken by the national authorities even if the amount exceeds ECU 2000 takes account only of the concern to obtain revenue and disregards the fact that such recovery should observe the requirements of equality and uniformity, without discrimination on grounds of territory or nationality.

53.

(d) The Council expresses no views on this question.

54.

(a) The Portuguese Government, Mecanarte and the Commission observe that the eighth question is closely linked with the sixth question.

55.

The Portuguese Government and the Portuguese Ministério Público state that applications from economic agents must be submitted to the competent national authorities and it is only on the basis of their appraisal that the powers provided for in Articles 2 and 4 of Regulation No 1573/80 can be brought into play. The Portuguese Ministerio Público states that two situations must be distinguished:

56.

The Commission refers to its observations on the sixth question, to the effect that the national authorities must appraise the application and that, if they conclude that the conditions laid down in Article 5(2) of Regulation No 1697/79 are fulfilled, that is to say if they opt for non-recovery, they must refer the matter to the Commission for consideration where the amount involved exceeds ECU 2000.

57.

Mecanarte claims that the national authorities have no right to reject a duly reasoned application addressed to them by the taxpayer, if they have decided to proceed with recovery, just as there is no reason, in Mecanarte's view, to recognize their authority freely to decide not to proceed with recovery.

58.

(b) With respect to the seventh question, the Portuguese Government and Mecanarte state in the first place that this question of interpretation arises because the national court maintains that there is an obvious contradiction between the Portuguese customs regulations at issue and Articles 2 and 4 of Regulation No 1573/80. In their view there is no such contradiction.

59.

The Portuguese Government observes that the Portuguese legislature confined itself, in the case of the Portuguese customs rules at issue, to entrusting to the Serviço de Conferência Final and to the Directorate General the right to exercise the powers vested in the national authorities by Article 5(2) of Regulation No 1697/79, in conjunction with Articles 2 and 4 of Regulation No 1573/80. According to the Portuguese Government, the Community legislature defined a field of action for the national authorities but left the national legislature to determine which organs of the customs administration were to be competent in that respect. By adopting internal implementing rules, the Portuguese legislature had, with a view to optimizing and rationalizing decisions, concentrated the powers relating to post-clearance recovery and non-recovery in the hands of the Directorate General for Customs, so that the latter decides in particular, provided that the prescribed conditions are fulfilled, to seek intervention by the Commission.

60.

Mecanarte states, in the first place, that in cases where the amount is less than ECU 2000 there is no conflict with the Community rules since the latter themselves provide that both the assessment and the decision on recovery or non-recovery are matters for the competent national administration, which in Portugal is the Directorate General for Customs. Secondly, Mecanarte considers that any conflict may also be ruled out in cases involving more than ECU 2000 if it is recognized that the decision to be taken by the Directorate General will be to refer such matters to the Commission for consideration and not to give a decision on the merits itself.

61.

The Portuguese Ministério Público considers that the seventh question is not one of interpretation on which the decision to be given in the main proceedings depends. In its view, it is possible to bring the application of the Portuguese customs rules at issue into line with Articles 2 and 4 of the implementing regulation, No 1573/80.

62.

The Commission concentrates on a number of principles to be observed in references under Article 177 of the EEC Treaty. It points out that the Court of Justice has no jurisdiction to appraise the hierarchy of national rules and likewise is not authorized to rule whether or not a preliminary reference is appropriate. The Commission also emphasizes that the national courts are not competent themselves to decide that acts of Community institutions are invalid and must, therefore, refer the matter to the Court of Justice.

63.

(c) The Council expresses no view on the seventh and eighth questions.

—

Mecanarte, by Ricardo Garção and Adriano Garção of the Oporto Bar,

—

the Portuguese Ministério Público, by Isabel Aguiar, representative of the Ministério Público at the Tribunal Fiscal Aduaneiro, Oporto,

—

the Portuguese Government, by Luis Inês Fernandes, Director of Legal Affairs in the Directorate General for the European Communities, and Maria Luisa Duarte, Consultant to the Legal Affairs Department in the same Directorate, acting as Agents,

—

the Council of the European Communities, by Bjarne Hoff-Neilsen, Head of Division, and Amadeu Lopes-Sabino, Principal Administrator in the Legal Department of the Council, acting as Agents;

—

the Commission of the European Communities, by Jörn Sack and Herculano Lima, Commission Legal Advisers, acting as Agents.

1

By order of 16 October 1989, which was received at the Court Registry on 14 November 1989, Tribunal Fiscal Aduaneiro, Oporto, referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty eight questions on the interpretation and validity of 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 be required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties (Official Journal 1979 L 197, p. 1) and the interpretation of Article 4 of Commission Regulation (EEC) No 1573/80 of 20 June 1980 which lays down provisions for the implementation of Article 5(2) of Regulation No 1697/79 (Official Journal 1980 L 161, p. 1).

2

The questions were raised in proceedings brought by Mecanarte — Metalúrgica da Lagoa Lda (‘Mecanarte’) for the annulment of the notice of post-clearance recovery of customs duties issued by the Opono Customs Office.

3

Mecanarte imported into Portugal a consignment of 42 sets of hot-rolled steel sheets purchased from its supplier in the Federal Republic of Germany, Schmolz & Bickenbach, and, for the purpose of putting the goods into circulation, submitted to the Portuguese customs authorities a certificate (form EUR 1 No D 790072) issued in Düsseldorf on 18 February 1986, indicating that the goods had originated in the Federal Republic of Germany.

4

The Portuguese customs authorities, considering that the goods were declared as coming from the Federal Republic of Germany, classified them under tariff headings 73 13 230 100 j and 73 13 260 000 t of the Common Customs Tariff and exempted them from import customs duties.

5

By letter of 29 March 1988, the Düsseldorf customs supervisory office informed the Portuguese Directorate General for Customs that certificate EUR 1 No D 790072 had been declared invalid on the ground that it had been improperly issued by Schmolz & Bickenbach and that the steel sheet products described in the certificate had come from the German Democratic Republic, not from the Federal Republic of Germany.

6

After receiving that information, the Oporto customs office proceeded, through its Serviço da Conferência Final, to effect post-clearance recovery of duties from Mecanarte in the sum of ESC 3611599.

7

Mecanarte instituted proceedings before the Tribunal Fiscal Aduaneiro, Oporto, for the annulment of the notice of assessment, which had been confirmed by a decision of the Oporto Director of Customs which at the same time rejected Mecanarte's request that the file be forwarded to the Commission of the European Communities so that the latter might decide to waive post-clearance recovery of the duties in question.

8

Having doubts regarding the interpretation and validity of Article 5(2) of Council Regulation No 1697/79 and the interpretation of Article 4 of Commission Regulation No 1573/80, the Tribunal Fiscal Aduaneiro, Oporto, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

9

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 written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

10

The present case is essentially concerned with two provisions:

Article 5(2) of Council Regulation No 1697/79 of 24 July 1979, which 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’,

and Article 4 of Commission Regulation No 1573/80 of 20 June 1980, which provides that:

‘where the competent authority of the Member State in which the error was committed is not able to ascertain by its own means whether all the conditions set out in Article 5(2) of the basic regulation are fulfilled, or where the amount of duties involved is equal to or greater than ECU 2000, it shall request the Commission to take a decision on the case, submitting to it all the necessary background information’.

11

The first and second questions seek to ascertain whether Article 5(2) of Regulation No 1697/79 grants the competent authorities a discretionary power to proceed with or waive the post-clearance recovery of customs duties and, if so, whether that provision is valid in the light of the fundamental principles laid down in the Treaty.

12

With respect to the first question, the Court has consistently held that Article 5(2) of Regulation No 1697/79 must be interpreted as meaning that if all the conditions laid down by that provision are fulfilled the person liable is entitled to the waiver of the recovery of the duty in question (see the judgments in Case 314/85 Foto-Frost [1987] ECR 4199, paragraph 22, Case 378/87 Top Hit [1989] ECR 1359, paragraph 18 and Case 161/88 Binder [1989] ECR 2415, paragraph 16).

13

If the person liable is so entitled, the competent national authorities are required not to effect post-clearance recovery, otherwise that entitlement would be worthless.

14

It must therefore be stated in reply to the first question that the first part of Article 5(2) of Council Regulation (EEC) No 1697/79 of 24 July 1979 must be interpreted as meaning that it confers on the competent national authorities a non-discretionary power as regards the decision not to carry out post-clearance recovery of import duties when the conditions laid down in Article 5(2) have been fulfilled.

15

The national court submitted the second question only in the event that according to the answer to the first question Article 5(2) of Regulation No 1697/79 confers a discretionary power on the national authorities.

16

In view of the answer given to the first question, the second question has become devoid of purpose.

17

By its third and fourth questions, which it is appropriate to consider together, the national court asks the Court of Justice to explain what is meant by expression‘error made by the competent authorities themselves which could not reasonably have been detected by the person liable’ in Article 5(2) of Regulation No 1697/79.

18

Those questions raise three distinct problems:

19

As a preliminary point, it must be observed that 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 to recover or not to recover customs duties is based are correct.

20

It follows, first, that the notion of error is not limited to mere calculation or copying errors but includes any kind of error which vitiates the decision in question, such as, in particular, the misinterpretation or misapplication of the applicable rules of law.

21

In that regard, the reference to errors of calculation or copying in the preamble to Regulation No 1697/79 must be regarded as merely providing an example, which does not exhaust all possible cases of error to be taken into account for the purposes of Article 5(2) of Regulation No 1697/79.

22

It follows, in the second place, that, since there is no precise and exhaustive definition of the ‘competent authorities’ provided in Regulation No 1697/79, or in Regulation No 1573/80, which was adopted in implementation of the first-mentioned regulation and was in force at the material time, any authority which, acting within the scope of its powers, furnishes information relevant to the recovery of customs duties and which may thus cause the person liable to entertain legitimate expectations, must be regarded as a ‘competent authority’ within the meaning of Article 5(2) of Regulation No 1697/79. This applies in particular to the customs authorities of the exporting Member State which deal with the customs declaration.

23

It follows, in the third place, that the legitimate expectations of the person liable attract the protection provided for in Article 5(2) of Regulation No 1697/79 only if it was the competent authorities ‘themselves’ which created the basis for the expectations of the person liable. Thus, only errors attributable to acts of the competent authorities which could not reasonably have been detected by the person liable create entitlement to the waiver of post-clearance recovery of customs duties.

24

That condition cannot be regarded as fulfilled where the competent authorities have been led into error, in particular as to the origin of the goods, by incorrect declarations by the person liable whose validity they do not have to check or assess. In such circumstances, the Court has consistently held that it is the person liable who must bear the risks arising from a commercial document which is found to be false when subsequently checked (judgment in Joined Cases 98 and 230/83 Van Gend en Loos [1984] ECR 3763, paragraph 20).

25

On the other hand, if the declarations of the person liable are incorrect solely because of inaccurate information furnished by the competent authorities which is binding on those authorities, Article 5(1) of Regulation No 1697/79 precludes the post-clearance recovery of import and export duties.

26

It follows that it must be stated in reply to the third and fourth questions that the errors referred to in Article 5(2) of Regulation No 1697/79 comprise all errors of interpretation or application of the provisions on import duties and export duties which could not reasonably have been detected by the person liable, in so far as they are the consequence of acts of either the authorities responsible for post-clearance recovery or the authorities of the exporting Member State, which excludes errors caused by incorrect declarations by the person liable, except in cases where their incorrectness is merely the consequence of incorrect information given by the competent authorities which is binding upon them.

27

The fifth question seeks to determine, essentially, whether a person liable who in good faith provides the customs authorities with incorrect or incomplete information nevertheless satisfies all the provisions laid down by the rules in force as far as the customs declaration is concerned, within the meaning of the last part of the first subparagraph of Article 5(2) of Regulation No 1697/79.

28

As the Court held in paragraphs 22 and 26 of its judgment in Top Hit, cited above, in order to comply with the provisions laid down by the rules in force concerning his customs declaration, the person making the declaration must supply the customs authorities with all the necessary information provided for by the Community rules and the national rules, supplementing or transposing those rules, if necessary, according to the customs treatment requested for the goods in question.

29

That obligation may not, however, go beyond production of the information and documents that the person liable may reasonably possess or obtain. It follows that if an economic agent produces in good faith information which, although incorrect or incomplete, is the only information which he can reasonably possess or obtain and therefore include in the customs declaration, the requirement of compliance with the provisions in force concerning the customs declaration must be considered to have been fulfilled.

30

It must therefore be stated in reply to the fifth question that the last part of the first subparagraph of Article 5(2) of Regulation No 1697/79 must be interpreted as meaning that it applies to circumstances in which the person liable has fulfilled all the requirements laid down by both the Community rules on customs declarations and any national rules which supplement or implement them, even if he supplied, in good faith, incorrect or incomplete information to the competent national authorities, provided that that information is the only information which he could reasonably have knowledge of or obtain.

31

By its sixth question, the national court seeks essentially to determine whether, pursuant to Article 4 of Regulation No 1573/80, the Commission is empowered only to decide upon the waiver of post-clearance recovery of customs duties or whether its power extends to decisions to effect recovery where the amount of uncollected duties is ECU 2000 or more.

32

As is already clear from the judgment of the Court in Case C-64/89 Deutsche Fernsprecher [1990] ECR I-2535 (paragraphs 12 and 13), the power of decision conferred on the Commission by Article 4 of Regulation No 1573/80 relates only to cases in which the competent national authorities are convinced that the conditions of Article 5(2) of Regulation No 1697/79 are fulfilled and therefore do not consider that they must effect post-clearance recovery.

33

As the Court made clear in the same judgment, that interpretation is in conformity with the purpose of Regulation No 1697/79, which is to ensure the uniform application of Community law. That is likely to be jeopardized in cases where an application to waive post-clearance recovery is allowed, since the assessment which a Member State may make in taking a favourable decision is likely, in actual fact, owing to the probable absence of any appeal, to escape any review by means of which the uniform application of the conditions laid down in the Community legislation may be ensured. On the other hand, that is not the case where the national authorities proceed to effect recovery, whatever the amount in issue. It is then open to the person concerned to challenge such a decision before the national courts. As a result, it will then be possible for the uniformity of Community law to be ensured by the Court of Justice through the preliminary ruling procedure.

34

It must therefore be stated in reply to the sixth question that the power conferred on the Commission by Article 4 of Commission Regulation (EEC) No 1573/80 covers only decisions to refrain from carrying out post-clearance recovery where the amount of the duties involved is equal to or greater than ECU 2000.

35

By its eighth question, which is closely linked with the sixth question and should therefore be considered at this point, the national court inquires whether, when the decision on recovery is a matter for the national authorities and the person liable submits a reasoned request for a waiver of recovery, that request must be forwarded to the Commission or whether it is for the national authorities themselves to give a decision on it.

36

As the Court held in its judgment in Deutsche Fernsprecher, cited above, it is for the national authorities to recover import and export duties, whatever the amount in issue. In view of the purpose of Regulation No 1573/80 which, as the Court made clear in the same judgment, is to ensure the uniform application of Community law, it is also for the national authorities to give a decision on a reasoned request for a decision to waive recovery made by a person liable. There is no obligation to refer the matter to the Commission, as stated in paragraph 34 above, except where the national authorities decide upon non-recovery and where the amount involved is ECU 2000 or more.

37

It must therefore be stated in reply to the eighth question that when the person liable submits a request that action for post-clearance recovery of import duties or export duties should not be taken, it is for the national authorities to take a decision on that request and it is not incumbent upon them to refer the case for consideration by the Commission unless they intend not to recover an amount of duties equal to or greater than ECU 2000.

38

In its seventh question, the Tribunal Fiscal Aduaneiro raises problems of a procedural nature concerning the application of Article 177 of the EEC Treaty.

39

It is apparent from the grounds of its order for reference that the national court takes the view that the two provisions of the Portuguese rules applicable to the present case are not only contrary to Community law but are also unconstitutional on functional and substantive grounds since they were adopted in the exercise of administrative functions and not in the exercise of legislative functions, the latter in this case being the prerogative of the national Assembly of the Portuguese Republic, and since they are contrary to the principle of the primacy of international law over domestic law.

40

Accordingly, the Tribunal Fiscal Aduaneiro inquires, first, whether, having found the national provisions at issue to be unconstitutional, it has jurisdiction to seek a preliminary ruling, since a finding of unconstitutionality of a rule of domestic law is subject, by virtue of Article 280(3) of the Portuguese Constitution, to an appeal to the Portuguese Constitutional Court and consequently only that court may seek a preliminary ruling in such cases, and, secondly, whether a reference for a preliminary ruling might not be superfluous since any defects of a national provision can be remedied within the national legal system.

41

The seventh question thus raises two distinct problems concerning the conditions for the application of Article 177 of the EEC Treaty:

42

As regards the first problem, it must be borne in mind that Article 177 of the EEC Treaty grants the Court of Justice jurisdiction to give preliminary rulings both on the interpretation of the Treaties and the acts of Community institutions and on the validity of such acts. The second paragraph of that article provides that national courts may refer questions to the Court and the third paragraph provides that they must do so if there is no judicial remedy against their decisions under national law.

43

The essential purpose of the jurisdiction conferred on the Court of Justice by Article 177 is to ensure that Community law is applied uniformly by the national courts. For this purpose Article 177 provides the national courts with a means of overcoming difficulties which may arise from the requirement of giving full effect to Community law within the judicial systems of the Member States.

44

The effectiveness of the system established by Article 177 of the EEC Treaty requires that the national courts have the widest possible powers to refer questions to the Court of Justice if they consider that a case pending before them raises issues requiring an interpretation or an appraisal of the validity of provisions of Community law whose determination is necessary for the resolution of the dispute brought before them.

45

Moreover, the effectiveness of Community law would be in jeopardy if the existence of an obligation to refer a matter to a constitutional court could prevent a national court hearing a case governed by Community law from exercising the right conferred on it by Article 177 of the EEC Treaty to refer to the Court of Justice questions concerning the interpretation or validity of Community law in order to enable it to decide whether or not a provision of domestic law was compatible with Community law.

46

It must therefore be stated in reply to the first limb of the seventh question that a national court which in a case concerning Community law declares a provision of national law unconstitutional does not lose the right or escape the obligation under Article 177 of the EEC Treaty to refer questions to the Court of Justice on the interpretation or validity of Community law by reason of the fact that such a declaration is subject to a mandatory reference to the constitutional court.

47

As regards the second problem, it need merely be pointed out that the Court has consistently held, with respect to the allocation of judicial functions as between the national courts and the Court of Justice under Article 177 of the Treaty, that national courts have a discretion as to whether a decision on a point of Community law is necessary to enable them to give judgment (see in particular the judgment in Case 283/81 CILFIT[1982] ECR 3415, paragraph 10).

48

It must be made clear in this regard that the discretion enjoyed by the national court under the second paragraph of Article 177 of the EEC Treaty includes a discretion to decide at what stage of the procedure it is appropriate to refer a question to the Court for a preliminary ruling.

49

Thus, it must be stated in reply to the second limb of the seventh question that it is for the national court, pursuant to the second paragraph of Article 177 of the EEC Treaty, to decide whether the questions of law raised by the case before it are relevant, whether a preliminary ruling is necessary for it to be able to give judgment and at which stage of the proceedings a question must be referred to the Court of Justice for a preliminary ruling.

50

The costs incurred by the Portuguese Government, the Portuguese Ministério Público, the Council of the European Communities and the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, so far as the parties to the main proceedings 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 (Third Chamber),

in reply to the questions submitted to it by the Tribunal Fiscal Aduaneiro, Oporto, by order of 16 October 1989, hereby rules: