ECJ Case C-75/09 Agra

The ECJ was recently called upon to rule whether a customs debt arising from an act that led to domestic criminal court proceedings meant that the three year time-limit period for ordinary customs debt recovery applied or not?

The Facts

Agra imported frozen boned meat (CN Code 0202.30.90.90) as part of the annual quota established by Regulation 954/2002. In order to obtain the import licenses there could be no link with companies or firms of other Member States that had submitted similar applications before 14 June 2002. In the course of an inspection of 12 February 2007, Milan Revenue Enforcement Officers found a number of irregularities. This investigation gave rise to a criminal investigation and a post-clearance demand of EUR 141.125.49 for import duties and VAT plus an additional EUR 47,298.45 for interest that was issued on 11 March 2008.

The Arguments

Agra disputed the demand on the basis that the right to carry out reassessment of customs declarations had been extinguished because there was a limitation period of three years from the date of the customs declarations. They argued that as the declarations had been lodged on 13 August, 18 September and 23 October 2002, the limitation period had expired in 2005.

The Italian customs authorities argued that Article 221(4) of the Customs Code combined with Italian national legislation meant that where failure to pay customs duties had its origins in whole or in part in a criminal offence, time for the purposes of the limitation period is to run from the date on which the judgement on the criminal proceedings becomes final rather than from the point of declaration.

The Question Referred

"Is the right of the customs authority to revise the assessment of the customs debt extinguished and/or time-barred on the expiry of the three year period from the date of the customs declaration or can those time-limits be interrupted and/or suspended pending the outcome of criminal proceedings for infringement of the customs rules relating to the assessment?"

The Judgement 

The ECJ noted that it is not for the ECJ to determine under Article 234 the compatibility of national legislation with EU law but to provide the national court with all the criteria for the interpretation of EU law as necessary for the national court to rule on such compatibility. The court also noted that the first sentence of Article 221(3) lays down a limitation rule of three years from the date on which a customs debt is incurred. However, it also noted that the second sentence provides that, following the lodging of an appeal under Article 243, the limitation period can be suspended for the duration of the appeals proceedings.

"However, where it is as a result of an act that could give rise to criminal court proceedings that the customs authorities were unable to determine the exact amount legally due such communication may, in so far as the provisions in force so allow, be made after the expiry of such three-year period."

The ECJ noted that Article 221(4) itself does not itself stipulate a limitation period and that referring to "provisions in force" defers to national level regarding the rules governing extinction of debt arising from an act that gives rise to criminal court proceedings. As the EC does not lay down common rules in this field, it is for each Member State to lay down rules in this area. As such, the Court ruled that if the national law of the Member State so allowed, a customs authority could issue a post-clearance demand even though the customs declaration had been declared more than the three years permitted for ordinary customs debt recovery.

ITS Conclusions

The ECJ has "clarified" an area that on a proper reading of the law already seemed clear. A customs debt that arises from an act that does not lead to criminal court proceedings is indeed time-barred for a period of three years. The customs authorities can seek recovery at any time during that period. However, if the customs debt arises from an act that leads to criminal court proceedings, the time-limitation depends on the national legislation in place at that time. If the national legislation permits it, then the customs authority can seek remission even though the offence may have taken place prior to the three year period ordinarily allowed. In the UK, Section 146(a) of the Customs and Excise Management Act 1979 states that a serious offence has a time-bar of 20 years.

Next Steps 

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