On September 21, 2023, the ECJ issued its decision in the Customs case C-770/21 ( OGL-Food Trade Lebensmittelvertrieb).
Context: Reference for a preliminary ruling — Union Customs Code — Customs valuation of fruit and vegetables subject to the entry price system — Declared transaction value in excess of the standard import value — Sale of products on terms that reflect the reality of the transaction value — Sale at a loss — Judicial review of the Decision establishing the customs debt – Absence of a commercial contract for importation – Concept of ‘participant or partner in partnership
Facts
An importer, OGL-Food, declared a shipment of fresh courgettes from Turkey with a net weight of 4,800 kg and a customs value of EUR 90.81 per 100 kg. The customs authorities set a flat-rate import value for courgettes at EUR 53.80 per 100 kg, and OGL-Food provided a security of BGN 982.17 (approx. EUR 502) when the transaction value declared was more than 8% above the flat-rate import value. The customs authorities requested proof that the disputed lot was placed on the market under the conditions that correspond to the reality of the declared customs value, and OGL-Food submitted documents to purchase and sell the disputed lot. However, since the sales price was lower than the total purchase price, the customs authority withheld the security as import duty. OGL-Food argued that profitable resale is not required to prove the correctness of the transaction value declared as customs value and that the sale was part of a long-standing business relationship with Lidl. The customs director decided to withhold the security provided as import duty, citing the considerable difference between the declared transaction value and the flat-rate import value and taking into account the loss made on the sale of the disputed lot. OGL-Food brought an action for annulment of the decision, claiming that the declared transaction value met the requirements of Art. 70 of the Union Customs Code and that the sales price of the disputed lot on the European Union market confirmed the accuracy of the declared transaction value.
Questions
1. Is it to be assumed that, having regard to Article 70(1) [of the Union Customs Code] in conjunction with Article 75(5) subpara. 1 and paragraph 6 of Delegated Regulation [2017/891] for assessing the requirement in Article 70(3)(d) of the [Union] Customs Code that “the buyer and the seller [are] not related”, with regard to the application of the transaction value of goods for customs purposes in the context of a specific customs declaration for the import of vegetables are to be considered relevant:
– the information on the legal relationship between the parties involved in the importation of goods and the sale of the same goods at the first level of trade in the Union, namely long-term and recurring supplies of goods of the same kind, in significant quantities and at a significant value, precluding the conclusion that that the relationship in the specific import being assessed was accidental;
– information on the invoices issued for the supplies, the payment of the price, the entry of the invoices in the accounts and in the VAT registers of the importer or the right to deduct input tax exercised for the specific import;
– that the declared transaction value of the specific import under assessment is significantly higher than the flat-rate import value for the same product determined by the Commission for the purpose of applying import duties in the vegetable sector, while the same product is sold in the Union at a loss;
– that the importer has not submitted a commercial contract required by the customs authorities in connection with the specific import, nor a document on any other legal relationship between the contracting parties?
If the above circumstances are relevant, they then allow the importing and exporting trader or the importer and the buyer at the first level of trade in the Union to be identified as “partners or partners in partnerships” or as connected persons within the meaning of Art. 127(1)(b) and Article 142(4)(b) of the [Union Customs Code Implementing Regulation]?
If the above circumstances are relevant but not sufficient for the traders to be considered related persons, then for the purposes of the examination under Article 75(6) of Delegated Regulation [2017/891], an assessment must be made as to whether the relationship between the traders [not] influenced the determination of the higher price of the specific imported goods, in order to counteract the avoidance of customs duties and the loss of tax revenue for the Union budget, also taking into account the subsequent sale at a loss at the first level of trade in the Union?
2. Is interpreted from Article 47(1) and Article 41(2)(c) of the Charter of Fundamental Rights of the European Union [hereinafter: the Charter], interpreted in conjunction with the importer’s right to a remedy under Article 44 1 [of the Union Customs Code], the duty of the customs authorities under Article 29 in conjunction with Article 22(7) of the Customs Code to give reasons for the decision, as well as the circumstances of the case and taking into account the fact that the court of first instance in the legal proceedings against the decision whose lawfulness is to be examined ex officio, also under aspects not asserted in the complaint, and to collect new evidence ex officio and to appoint experts, to deduce that:
– the requirement under Article 70(3)(d) of the Union Customs Code that ‘the buyer and the seller are not connected or the connection has not affected the price’ was established for the first time in the proceedings before the Court or does the customs authority already have to assess this issue as part of the reasoning of the contested decision?if the importer had the procedural opportunity but did not expressly declare that he would like to know the value of the imported goods in accordance with Article 74(2)(c). of the Union Customs Code, it would be in violation of Article 75 (5) and (6) of the Delegated Regulation 2017/89 due to the explicit limitation period for the said determination if this value were to be determined for the first time in the legal proceedings against the decision in court,also with a view to addressing the importer’s objections based on the fact that the selling price of the goods in the Union is close to the declared transaction value?
3. Follows from Art. 75 para. 5 subpara. 4 of Delegated Regulation [2017/891], according to which “the importer shall provide all the documents necessary to carry out the relevant customs controls in connection with the sale and disposal of each product of the lot concerned”, in the light of the interpretation in No. 1 of the operative part of the judgment of the Court of Justice of March 11, 2020, X BV (Collection of additional import duties) (С-160/18, EU:C:2020:190), for the proof of the declared transaction value according to Art. 70 para 1 of the Union Customs Code in the circumstances of the present case that:
– the customs authorities and, in the legal proceedings, the court are obliged to take into account the fact that the imported goods, vegetables, are sold at a loss in the Union as serious evidence that the declared entry price was artificially inflated, also for the purposes of the assessment the connectedness of the persons, which had an influence on the stated transaction value, among other things to counteract customs avoidance and tax losses?
– the importer is required to provide a contract or other equivalent document proving the price to be paid for the goods when sold for export to the customs territory of the Union, or is proof of payment of the declared value of the goods on import sufficient? or
– the importer only those referred to in Art. 75 para. 5 subpara. 4 of the Delegated Regulation [2017/891] must submit documents expressly mentioned as proof of the declared transaction value when importing vegetables, so that the circumstances affecting the sale of the same goods at a loss in the Union are relevant for the assessment under Art. 75 Paragraph 6 of this regulation are irrelevant with regard to the non-recognition of the transaction value and the determination of the import duty?
4. Follows from Art. 75 (5) and (6) of the Delegated Regulation [2017/891] as well as from the interpretation in the judgment of June 16, 2016, EURO 2004. Hungary (С‑291/15, EU:C:2016:455 ), in the circumstances of the main proceedings that the customs value of vegetables imported from third countries is not to be determined according to the declared transaction value if:
– the declared transaction value is significantly higher than the flat-rate import value determined by the Commission for the same product for the purpose of applying import duties in the vegetable sector;
– the customs authority does not dispute or otherwise question the authenticity of the invoice and proof of payment of the price of the goods presented as evidence of the entry price actually paid;
– the importer, despite being requested by the customs authority, has not provided: a contract or other equivalent document evidencing the price to be paid for the goods when sold for export to the customs territory of the Union, including additional evidence of the economic elements of the goods supporting the justify higher value when purchased from the exporter, [e.g.] for an organic product or a particular quality of the specific batch of vegetables?
AG Opinion
1. Article 75 (2), (5) and (6) of Commission Delegated Regulation (EU) 2017/891 of March 13, 2017 supplementing Regulation (EU) No. 1308/2013 of the European Parliament and of the Council with regard to the fruit and vegetables and processed fruit and vegetable sectors and supplementing Regulation (EU) No. 1306/2013 of the European Parliament and of the Council with regard to the sanctions to be applied in these sectors and amending Implementing Regulation (EU) No. 543/ 2011 of the Commission in the version amended by Commission Delegated Regulation (EU) 2018/1145 of June 7, 2018 is in the light of Art. 5 Nos. 1 and 3, Art. 22 Para. 6, Art. 29 and of Art. 44 Para. 2 of Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9October 2013 establishing the Union Customs Code as amended by Regulation (EU) 2016/2339 of the European Parliament and of the Council of 14 December 2016
to interpret that
the deadlines provided therein and the sanction provided therein for non-compliance prevent the reasoning of the customs decision from being changed at the judicial stage of the challenge, including the method chosen for the calculation of the customs value or the concept of “related persons” within the meaning of art 70(3)(d) of Regulation No 952/2013 as amended by Regulation 2016/2339.
2) The first question referred is inadmissible, but the alternative answer is as follows:
Article 70(3)(d) of Regulation No. 952/2013 as amended by Regulation 2016/2339 and Article 127(1)(b) of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 detailing the implementation of provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council establishing the Union Customs Code as amended by Commission Implementing Regulation (EU) 2018/604 of 18 April 2018
are to be interpreted as follows
the buyer and the seller cannot be considered partners or associates in partnerships unless they demonstrate that the conditions laid down in the national provisions on partnership or partnership are met, which precludes a non-legal association.
Decision
1. Article 75(5) and (6) of Commission Delegated Regulation (EU) 2017/891 of 13 March 2017 supplementing Regulation (EU) No 1308/2013 of the European Parliament and of the Council with regard to the fruit and vegetables and processed fruit and vegetables sectors and supplementing Regulation (EU) No 1306/2013 of the European Parliament and of the Council with regard to penalties to be applied in those sectors and amending Commission Implementing Regulation (EU) No 543/2011
must be interpreted as:
– precluding an importer who has not chosen, within the time limits laid down by those provisions, to determine the customs value of the lot imported in accordance with Article 74(2)(c) of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code, but has, on the contrary, determined that value in accordance with Article 70 of that regulation, from being able validly to rely, in support of its action against a decision of the customs authorities determining the customs debt, on a calculation of the customs value carried out in accordance with Article 74(2)(c) of Regulation No 952/2013 in order to prove, by relying on Article 134(2)(b) of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation No 952/2013, that the prices referred to in Article 70 of Regulation No 952/2013 were correct;
– precluding a judicial authority, hearing an appeal against a decision of a customs authority determining the customs debt, from being able to raise, of its own motion and for the first time in the context of a dispute before it, the question whether the importer and the exporter are related, within the meaning of Article 70(3)(d) of Regulation No 952/2013, and, if so, whether or not any relationship between them influenced the price actually paid or payable, within the meaning of that provision, where the customs control carried out by the customs authority did not relate to the existence of such a relationship, that authority having disregarded the transaction value declared for different reasons, relating to the conditions under which the lot concerned was disposed of on the EU market.
2. Article 75(5) of Delegated Regulation No 2017/891
must be interpreted as meaning that the disposal of the lot of imported goods by means of a sale at a loss constitutes a serious indication of an artificially high declared transaction value which does not require the importer to provide the customs authorities, in order to demonstrate that that value is correct, with, in addition to the documents relating to transport, insurance, handling and storage, expressly referred to in the fourth paragraph of that provision, and the proof of payment of the declared transaction value, a contract or equivalent document stating the price at which it purchased the lot imported, where the former documents suffice to demonstrate the correctness of the declared transaction value.
3. Article 75(5) of Delegated Regulation No 2017/891
must be interpreted as meaning that for the purposes of determining the customs value, the customs authorities must disregard the declared transaction value of a lot of imported goods where that value is significantly higher than the standard import value fixed by the European Commission, that lot has been sold at a loss in the customs territory of the European Union, and where, despite the fact that it was invited to submit any document proving that the lot had been disposed of under the conditions confirming the correctness of that value, the importer did not submit sufficient documents for that purpose, even though those authorities do not dispute the authenticity of the invoice issued by the exporter or the actual payment of that invoice by the importer.
Summary
The case discusses the interpretation of Article 75(5) and (6) of Commission Delegated Regulation (EU) 2017/891 regarding the determination of customs value for imported goods. It states that an importer who does not determine the customs value within the time limits set by the regulation cannot rely on a calculation of customs value to prove the correctness of prices declared. Additionally, a judicial authority cannot raise questions about the relationship between the importer and exporter if it was not part of the customs control. The text also states that the disposal of imported goods at a loss is a serious indication of artificially high declared transaction value, and that customs authorities must disregard the declared transaction value if it is significantly higher than the standard import value and the importer does not provide sufficient documents to prove its correctness.
Source
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