Last reviewed 15 August 2013
Neil Baylis reports on case C-542/11 (Staatssecretaris van Financiën v Codirex Expeditie BV) at the Court of Justice of the European Union, concerning (a) when a customs-approved treatment or use is assigned to goods in temporary storage and (b) the accepted customs declaration for placing the goods under the external Community transit procedure.
A consignment of beef had been shipped from Brazil to the Netherlands and had been unloaded by Seaport International ("Seaport"). Seaport held these goods in "temporary storage" while waiting for them to be assigned a "customs-approved treatment or use".
Codirex Expeditie BV ("Codirex") submitted a declaration intending to have the consignment placed under the external Community transit procedure. This declaration was immediately accepted by customs. Seals were affixed to the container, which was then released and transported within the Netherlands to Eurofrigo BV ("Eurofrigo"). Eurofrigo informed the authorities that, although the seals on the container were intact, the consignment that was delivered contained two fewer packages than the number quoted on the declaration.
Codirex was asked to provide information on the missing goods but did not respond to the authorities, who then sent a notice of assessment to Codirex requesting payment of customs duties and VAT in respect of the missing goods.
Codirex challenged the tax inspector's decision to confirm this notice before the District Court, which ruled that, as the goods remained in temporary storage until their release by the authorities, Codirex could not be regarded as the relevant "customs debtor" as it did not have a power of physical disposal over the goods during this time.
Reference to the Court of Justice of the European Union
On appeal, the Supreme Court of the Netherlands referred the following question to the Court of Justice of the European Union (CJEU): "At what point in time are non-Community goods assigned a customs-approved treatment or use, for the purposes of Article 50 of the Community Customs Code, where goods with the status of goods in 'temporary storage' are declared for placing under the external Community transit procedure?"
Article 50 of the Community Customs Code (the "Code") provides: "Until such time as they are assign[ed] a customs-approved treatment or use, goods presented to customs shall, following such presentation, have the status of goods in temporary storage."
Article 67 provides: "Save as otherwise expressly provided, the date to be used for the purposes of all the provisions governing the customs procedure for which the goods are declared shall be the date of acceptance of the declaration by the customs authorities."
Article 73(1) requires that, as a general rule, where the conditions for placing the goods under the relevant customs procedure are satisfied, the authorities are to release the goods as soon as the declaration particulars have been verified or accepted without verification.
The CJEU examined the case on the assumption that the two packages had disappeared before the container had been sealed on Seaport's site.
The CJEU acknowledged that the unlawful removal of goods liable to import duties from customs supervision results in a customs debt. However if, at the time of removal, these goods had already been placed under the external transit procedure, it would be the holder of that procedure who would be required to account for the customs debt. On the other hand if, at the time of their removal, these goods had not yet been placed under the external transit procedure and were still in temporary storage, the person liable would be the person holding the goods after they had been unloaded. Therefore, the CJEU needed to determine the point when, pursuant to the Code, temporary storage of goods ends and coverage of these goods by the external Community transit procedure begins.
The CJEU held that the mere acceptance by the authorities of the declaration made by Codirex was not sufficient to conclude the period of temporary storage, as goods cannot be in external Community transit until all the conditions for that transit are met. The Code allowed the authorities to verify declarations that had been accepted by checking documents and/or inspecting the goods. The Code also provided for the adoption of further measures to ensure the correct application of the customs procedure governing the goods. It followed that, where errors were discovered during the verification of declarations or other measures were not complied with, the goods might not be covered by external Community transit.
The CJEU therefore decided that this part of the Code should be interpreted as meaning that the point at which non-Community goods that are in temporary storage, and covered by an accepted declaration placing them under the external Community transit procedure, are placed under that procedure and thereby assigned a customs-approved treatment or use, is the moment at which they are released.
The acceptance by customs authorities of a declaration relating to the intended placement of goods under the external Community transit procedure will not necessarily bring to an end the period of temporary storage in relation to such goods. This is significant for determining who is liable in relation to any customs duties that arise.