Six States Infringed EU Customs Code, ECJ Finds

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 February 2009

An Advocate General to the European Court of Justice has proposed that the full court declare that six European Union member states have infringed Community law by failing to pay customs duties on imports of defence and 'dual use' equipment.

Under EU law, the budget of the European Communities is funded from "own resources" including from agricultural levies, customs duties, VAT and the 'Gross National Product' own resource. However, the Commission has accused six nations, Finland, Sweden, Germany, Italy, Greece and Denmark of not crediting the EU own resources account with amounts corresponding to the customs duties on imports of defence equipment. In the case of Italy and Sweden, the Commission's complaint also relates to imports of dual use equipment.

While customs duties on certain weapons and military equipment were suspended with effect from January 1, 2003, the Commission claims that the infringement took place between January 1, 1998 and December 31, 2002.

Advocate General Dámaso Ruiz-Jarabo has taken the view that, by failing to pay the customs duties relating to the importation of these items over the period in question, the defendant states have failed to comply with their customs and financing obligations under Community law.

A summary of Ruiz-Jarabo's opinion states that: "imports of defence and dual-use equipment are not exempt from the Common Customs Tariff and that there are no special rules. Furthermore, with respect to those of the defendant states which have made a number of one-off temporary transfers in various amounts, the Advocate General explains that those payments must not be construed as full and final settlements. In that regard, Mr Ruiz-Jarabo states that the member states are under an obligation to credit the Community own resources account as soon as their customs authorities are in a position to calculate the amounts due and to determine the debtor."

The summary added: "The fragile stability of the Community financing system calls for a precise definition of the establishment, the collection and the making available of own resources, and for the compliance of the member states, because, if any state does not abide by those rules, the shortfall is remedied by exacting compensation from the other states."

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