Case C-158/08

Agenzia Dogane Ufficio delle Dogane di Trieste

v

Pometon SpA

(Reference for a preliminary ruling from the

Commissione tributaria regionale di Trieste)

(Community customs code – Regulation (EC) No 384/96 – Protection against dumped imports from countries not members of the European Community – Regulation (EC, Euratom) No 2988/95 – Protection of the European Communities’ financial interests – Processing under the inward processing procedure – Irregular practice)

Summary of the Judgment

1.        Common commercial policy – Protection against dumping – Circumvention

(Council Regulation No 384/96, Art. 13)

2.        Free movement of goods – Trade with non-member countries – Inward processing system – Scope

(Commission Regulation No 2454/93, Art. 551(1))

1.        Article 13 of Regulation No 384/96 on protection against dumped imports from countries not members of the European Community is inapplicable in the absence of a Council decision, adopted on a proposal from the Commission to extend the application of anti-dumping duties to imports from third countries of like products or parts thereof.

(see paras 17-20, operative part 1)

2.        An operation which consists in merely sending goods over the border after processing them into a product which is not subject to anti-dumping duties without any actual intention to re-export them and re-importing them shortly after cannot lawfully be placed under the inward processing procedure. In that connection, the aim of the inward processing procedure is to exempt from customs duties only those goods which are brought into the Community customs territory on a temporary basis in order that they may be worked, repaired or processed and then re-exported, thus preventing economic activity in Community countries from being penalised. Accordingly, a practice such as that described above is contrary to the very aim of the inward processing procedure and would undermine the effectiveness of the Community rules.

An importer who improperly brings himself within that procedure and benefits from it is required to pay the duties on the products concerned, without prejudice, where appropriate, to administrative, civil or criminal sanctions provided for by national law. It is for the national court having jurisdiction in the matter to determine whether the operation concerned be regarded as irregular in the light of Community law.

(see paras 23-30, operative part 2)

JUDGMENT OF THE COURT (Second Chamber)

4 June 2009 (*)

(Community customs code – Regulation (EC) No 384/96 – Protection against dumped imports from countries not members of the European Community – Regulation (EC, Euratom) No 2988/95 – Protection of the European Communities’ financial interests – Processing under the inward processing procedure – Irregular practice)

In Case C‑158/08,

REFERENCE for a preliminary ruling under Article 234 EC from the Commissione tributaria regionale di Trieste (Italy), made by decision of 13 March 2008, received at the Court on 16 April 2008, in the proceedings

Agenzia Dogane Ufficio delle Dogane di Trieste

v

Pometon SpA,

THE COURT (Second Chamber),

composed of C.W.A. Timmermans, President of the Chamber, J.‑C. Bonichot (Rapporteur), J. Makarczyk, P. Kūris and L. Bay Larsen, Judges,

Advocate General: V. Trstenjak,

Registrar: B. Fülöp, Administrator,

having regard to the written procedure and further to the hearing on 19 March 2009,

after considering the observations submitted on behalf of:

–        Pometon SpA, by E. Volli and F. Trevisan, avocats,

–        the Italian Government, by I. Bruni, acting as Agent, and G. Albenzio, avvocato dello Stato,

–        the Commission of the European Communities, by H. van Vliet, E. Righini and S. Schønberg, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This reference for a preliminary ruling concerns the interpretation of Article 13 of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (OJ 1996 L 56, p. 1), and Articles 4, 114 et seq., 202, 204, 212 and 214 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1) (‘the Community customs code’).

2        The reference was made in the course of proceedings between the Agenzia Dogane Ufficio delle Dogane di Trieste (Trieste Customs Authority) (Italy) and Pometon SpA concerning the import, declared under the inward processing procedure, of unwrought magnesium ingots of Chinese origin and provenance.

 Community law

3        Article 13 of Regulation No 384/96, in the version in force at the material time, provided:

‘1.       Anti-dumping duties imposed pursuant to this Regulation may be extended to imports from third countries of like products, or parts thereof, when circumvention of the measures in force is taking place. Circumvention shall be defined as a change in the pattern of trade between third countries and the Community which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty, and where there is evidence that the remedial effects of the duty are being undermined in terms of the prices and/or quantities of the like products and there is evidence of dumping in relation to the normal values previously established for the like or similar products.

2.       An assembly operation in the Community or a third country shall be considered to circumvent the measures in force where:

(a)      the operation started or substantially increased since, or just prior to, the initiation of the anti-dumping investigation and the parts concerned are from the country subject to measures; and

(b)       the parts constitute 60% or more of the total value of the parts of the assembled product, except that in no case shall circumvention be considered to be taking place where the value added to the parts brought in, during the assembly or completion operation, is greater than 25% of the manufacturing cost, and

(c)       the remedial effects of the duty are being undermined in terms of the prices and/or quantities of the assembled like product and there is evidence of dumping in relation to the normal values previously established for the like or similar products.

3.       Investigations shall be initiated pursuant to this Article where the request contains sufficient evidence regarding the factors set out in paragraph 1. Initiations shall be made, after consultation of the Advisory Committee, by Commission Regulation which shall also instruct the customs authorities to make imports subject to registration in accordance with Article 14(5) or to request guarantees. Investigations shall be carried out by the Commission, which may be assisted by customs authorities and shall be concluded within nine months. When the facts as finally ascertained justify the extension of measures, this shall be done by the Council, acting by simple majority and on a proposal from the Commission, from the date on which registration was imposed pursuant to Article 14(5) or on which guarantees were requested. The relevant procedural provisions of this Regulation with regard to initiations and the conduct of investigations shall apply pursuant to this Article.

…’

4        Under Article 114 of the Community customs code:

‘1.       Without prejudice to Article 115, the inward processing procedure shall allow the following goods to be used in the customs territory of the Community in one or more processing operations:

(a)      non-Community goods intended for re-export from the customs territory of the Community in the form of compensating products, without such goods being subject to import duties or commercial policy measures;

(b)       goods released for free circulation with repayment or remission of the import duties chargeable on such goods if they are exported from the customs territory of the Community in the form of compensating products.

2.      The following expressions shall have the following meanings:

(a)      suspension system: the inward processing relief arrangements as provided for in paragraph 1(a);

…’

5        Article 551(1) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ 1993 L 253, p. 1), in the version in force at the material time, stated in addition:

‘An authorisation to use the suspension system shall be granted only where the applicant has the actual intention of re-exporting the main compensating products from the customs territory of the Community. In that case use of the suspension system may be authorised for all the goods to be processed.’

6        Article 4(3) of Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European Communities financial interests (OJ 1995 L 312, p. 1) provides:

‘Acts which are established to have as their purpose the obtaining of an advantage contrary to the objectives of the Community law applicable in the case by artificially creating the conditions required for obtaining that advantage shall result, as the case shall be, either in failure to obtain the advantage or in its withdrawal.’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

7        According to the referring court, between the end of 1998 and 2001 Pometon SpA purchased from Pometon doo, an associated company incorporated in 1998 with its registered office in Sezana (Slovenia), unwrought magnesium ingots of Chinese origin and provenance, the importation of which into the Community should have attracted anti-dumping duty under Council Regulation (EC) No 2402/98 of 3 November 1998 imposing a definitive anti-dumping duty on imports of unwrought unalloyed magnesium originating in the People’s Republic of China and definitively collecting the provisional duty imposed (OJ 1998 L 298, p. 1). That product was imported under job-processing contracts on behalf of Pometon doo, a customer established in a non-member country. Pometon SpA applied for and obtained authorisation to submit the goods to the inward processing procedure with a period of suspension for six months. The goods were processed by Pometon SpA into magnesium granules, which are not subject to anti-dumping duty, and were re-exported through the border crossing at Fernetti (Italy).

8        The order for reference states that the goods at issue in the main proceedings, which never reached the establishment in Slovenia, were simply stored in a parking compound and re-introduced by importation into Italy as a product sold by Pometon doo to Pometon SpA. The order for reference also indicates that the investigations undertaken revealed that approximately 87% of the product exported by Pometon SpA immediately re-entered Italy and was released on the European market.

9        In the light of that evidence, the Agenzia Dogane Ufficio delle Dogane di Trieste took the view that the temporary imports of unwrought magnesium ingots of Chinese origin and provenance, declared under the inward processing procedure, were in fact definitive imports of that product. Consequently, the Agenzia Dogane Ufficio delle Dogane di Trieste issued additional and amending tax notices against which Pometon SpA brought an appeal. That appeal was upheld by the Commissione tributaria provinciale di Trieste (Regional Tax Court, Trieste).

10      The Agenzia Dogane Ufficio delle Dogane di Trieste brought an appeal against that judgment, against which Pometon SpA lodged a cross-appeal. In those circumstances, the Commissione tributaria regionale di Trieste decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

‘1.      Can it be correctly held that the inward processing procedure, as implemented by Pometon S.p.A., can infringe the principles of the customs policy of the Community, and, in particular, those of the general and specific anti‑dumping legislation, as well as those of the Community Customs Code …? In particular, is Article 13 of Regulation (EC) No 384/96 to be interpreted as a principle of general application, applicable as a general stipulation of the Community legal order, also directly binding in relations between national authorities and taxpayers, as well as in the procedure for imposing anti-dumping duty; for example, can that principle be invoked in carrying out customs controls, as defined in Article 4(14) of the Community Customs Code …?

2.      Can the combined provisions of Article 13 of Regulation (EC) No 384/96, in respect of evasion of anti-dumping rules, of Article 114 et seq. of the Community Customs Code …, in respect of inward processing, and of Articles 202, 204, 212 and 240 thereof, in respect of the incurrence of the customs debt, be interpreted as meaning that the subjection of goods to anti-dumping duty is not precluded by the prearranged acquisition of the same product from an entity with the nationality of a country not subject to anti-dumping duty, which has, in its turn, acquired that product in a country subject to such duty and has, without altering it in any way, imported it temporarily into the Community under the inward processing procedure, in order to re-import it processed, but temporarily and for only a few hours, and re-sell it immediately to the same Community company which had undertaken the inward processing?

3.      … In the absence of Community provisions on sanctions, which this court has failed to find, may the court of the Member State apply rules of its own legal order which enable it to declare, their requirements being met, the annulment of the contracts of assignment for inward processing and of sale of the compensating product, such as Articles 1343 (illegality), 1344 (contract to evade the law) and 1345 (illegal motive) of the Italian Civil Code and Article 1414 et seq. of the Italian Civil Code, in respect of pretence, where infringement of the Community principles referred to above is established?

4.      … For any other reasons or criteria of interpretation which it may please the Court to state, does the operation described above, where it is prearranged in order to circumvent anti-dumping duty, comply with the inward processing procedure or does it actually infringe customs principles for the application of anti‑dumping duty which the Court may wish to indicate?

5.      … For any other reasons or criteria of interpretation which it may please the Court to state, does the operation in question constitute a definitive import of products subject to anti-dumping duty?’

 The questions referred for a preliminary ruling

 Admissibility

11      Pometon SpA submits essentially that the questions referred are inadmissible in so far as they seek legal advice from the Court of Justice and not the interpretation of Community law, that they were referred by a court which lacks jurisdiction to adjudicate on them, and that the national court has not indicated which are the rules of Community law in respect of which interpretation is sought or the general principles to which it refers.

12      Those arguments cannot be accepted.

13      According to settled case-law, questions on the interpretation of Community law referred by a national court in the factual and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court to determine, enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court only where it is quite obvious that the interpretation of Community law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, Joined Cases C‑222/05 to C-225/05 van der Weerd and Others [2007] ECR I-4233, paragraph 22, and the case-law cited).

14      It is not apparent in this case that the interpretation requested has no relevance to the interpretation of Community law and that the Court thus has no jurisdiction to hear it, or that the interpretation requested bears no relation to the actual facts of the main action or its purpose. Moreover, the factual and legal material necessary in order for the Court to give a useful answer to the questions submitted to it are set out in the order for reference. The order for reference also indicates the provisions to be interpreted.

15      It follows that the questions referred for a preliminary ruling are admissible.

 The first and second questions

16      By its first and second questions, the referring court asks the Court of Justice, in substance, to what extent the provisions of Article 13 of Regulation No 384/96 are applicable to a dispute such as that before it.

17      Article 13(3) of Regulation No 384/96 provides that, where there is sufficient evidence that anti-dumping duties are being circumvented, the Commission’s decision to initiate an investigation is to be adopted in the form of a regulation. If that investigation enables facts to be finally ascertained which justify the extension of the application of the anti-dumping duties to imports from third countries of like products or parts thereof, that extension is to be decided by the Council acting by simple majority and on a proposal from the Commission.

18      In this case, it is sufficient to hold that there has been no Commission regulation initiating an investigation or a Council decision to extend the application of the anti-dumping measures.

19      It follows that the provisions of Article 13 of Regulation No 384/96 are not applicable in any event to the dispute in the main proceedings, and there is no need to give a ruling as to whether the wording of Article 13(1), in the version in force at the material time, covered the operations undertaken by Pometon SpA.

20      Therefore, the answer to the first and second questions is that Article 13 of Regulation No 384/96 is inapplicable in the absence of a Council decision, adopted on a proposal from the Commission, to extend the application of anti‑dumping duties to imports from third countries of like products or parts thereof.

 The third to the fifth questions

21      The third to the fifth questions concern, in substance, whether the operation by which a company imports goods under the inward processing procedure which attract anti-dumping duties, processes them into a product which is not subject to such duties and re-exports them to an associated company in a neighbouring third country which re-exports the goods into the Community and sells them back to the first company must be regarded as a definitive import into the customs territory of the Community.

22      Under Article 114 of the Community customs code, the inward processing procedure is to allow non-Community goods intended for re-export from the customs territory of the Community to be used in that territory. That use consists, in particular, in subjecting those goods to ‘processing’ operations. The re-exported goods are called ‘compensating products’.

23      The re-export of goods in the form of compensating products from the customs territory of the Community is one condition for the application of the inward processing procedure. It follows that it may be lawfully applied only if the goods are in fact intended for re-export from the customs territory of the Community, as indicated in the abovementioned provisions of Article 551(1) of Regulation No 2454/93, according to which anyone seeking to benefit from that procedure must have ‘the actual intention of re-exporting’ the goods concerned.

24      It is clear from all the rules which make up its legal structure that the very aim of inward processing is to exempt from customs duties only those goods which are brought into the Community customs territory purely on a temporary basis in order that they may be worked, repaired or processed, and then re-exported, thus preventing economic activity in Community countries from being penalised.

25      It necessarily follows that a practice, such as that described in paragraph 8 of this judgment, which consists in merely sending goods over the border without an actual intention to re-export them and re-importing them shortly after, would be contrary to the very aim of the inward processing procedure and would undermine the effectiveness of the Community rules.

26      It is for the referring court alone to ascertain whether the facts which gave rise to the dispute in the main proceedings constitute such an irregularity.

27      As regards the consequences arising from the finding of such irregularity, Article 4(3) of Regulation No 2988/95, which is general in scope, states that ‘[a]cts which are established to have as their purpose the obtaining of an advantage contrary to the objectives of the Community law applicable in the case by artificially creating the conditions required for obtaining that advantage shall result, as the case shall be, either in failure to obtain the advantage or in its withdrawal’.

28      The Court has already held that the obligation to give back an advantage improperly received by means of an irregular practice does not breach the principle of legality. The obligation to repay is not a penalty, but simply the consequence of a finding that the conditions required to obtain the advantage derived from the Community rules were created artificially, thereby rendering the advantage received a payment that was not due and thus justifying the obligation to repay it (see, to that effect, Case C-110/99 Emsland-Stärke [2000] ECR I‑11569, paragraph 56).

29      Similarly, an importer who improperly brings himself within the inward processing procedure and benefits from it by artificially creating the conditions required for its application is obliged to pay the duties on the products concerned, without prejudice, where appropriate, to administrative, civil or criminal sanctions provided for by national law.

30      Consequently, the answer to the third to the fifth questions is that an operation which consists in merely sending goods over the border after processing them into a product which is not subject to anti-dumping duties without any actual intention to re-export them and re-importing them shortly after cannot lawfully be placed under the inward processing procedure. An importer who improperly brings himself within that procedure and benefits from it is required to pay the duties on the products concerned, without prejudice, where appropriate, to administrative, civil or criminal sanctions provided for by national law. It is for the national court having jurisdiction in the matter to determine whether the operation concerned in the main proceedings must, in the light of the considerations set out above, be regarded as irregular in the light of Community law.

 Costs

31      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Second Chamber) hereby rules:

1.      Article 13 of Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community is inapplicable in the absence of a Council of the European Union decision, adopted on a proposal from the Commission of the European Communities, to extend the application of anti-dumping duties to imports from third countries of like products or parts thereof.

2.      An operation which consists in merely sending goods over the border after processing them into a product which is not subject to anti‑dumping duties without any actual intention to re-export them and re-importing them shortly after cannot lawfully be placed under the inward processing procedure. An importer who improperly brings himself within that procedure and benefits from it is required to pay the duties on the products concerned, without prejudice, where appropriate, to administrative, civil or criminal sanctions provided for by national law. It is for the national court having jurisdiction in the matter to determine whether the operation concerned in the main proceedings must be regarded as irregular in the light of Community law.

[Signatures]

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* Language of the case: Italian.