CELEX: 62006CJ0062
Regulation (EEC) No 1697/79
Article 3
Post-clearance recovery of import duties
Act that could give rise to criminal court proceedings
Competent authority for classifying the act

Grounds
1. This reference for a preliminary ruling concerns the interpretation of the concept of ‘an act that could give rise to criminal court proceedings’ contained in the first paragraph of Article 3 of Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties (OJ 1979 L 197, p. 1).
2. The reference has been made in proceedings between ZF Zefeser – Importação e Exportação de Produtos Alimentares Lda (‘ZF Zefeser’) and the Fazenda Pública – Director Geral das Alfândegas (Public Exchequer – Director General of Customs; ‘the Fazenda Pública’) concerning a post‑clearance determination of a customs debt.
Legal context
Community law
3. At the material time, the rules applicable to post-clearance recovery of customs duties were laid down in Regulation No 1697/79.
4. The first two recitals in the preamble to that regulation were worded as follows:
‘whereas the amount of the import duties or export duties which the person liable for payment has been required to pay on goods entered for a customs procedure involving the obligation to pay such duties may prove to be lower than the amount which was legally due, either as a result of an error of calculation or copying on the part of the competent authorities or because those authorities used inaccurate or incomplete information, particularly as regards the nature, quantity, value, origin or end-use of the goods in question; whereas, because of the essentially economic nature of the import duties or export duties in force in the Community, failure to collect the correct duties has prejudicial consequences for the Community economy; whereas it is therefore justified to permit the competent authorities to make post-clearance recovery of the duties remaining due, where they establish that such an error has been made;
whereas the post-clearance recovery of import duties or export duties involves some degree of prejudice to the certainty which persons liable for payment have the right to expect from official acts having financial consequences; whereas it is therefore appropriate to limit the possible scope of action of the competent authorities in this field by fixing a time‑limit after which the original determination of the import duties or export duties must be considered as definitive; whereas this restriction on action by the competent authorities cannot apply where at the time of the customs clearance of the goods the authorities have been unable, on account of an act that could give rise to criminal court proceedings, to determine the exact amount of the import duties or export duties; … ;’
5. Article 2(1) of Regulation No 1697/79 provided:
‘Where the competent authorities find that all or part of the amount of import duties or export duties legally due on goods entered for a customs procedure involving the obligation to pay such duties has not been required of the person liable for payment, they shall take action to recover the duties not collected.
However, such action may not be taken after the expiry of a period of three years from the date of entry in the accounts of the amount originally required of the person liable for payment or, where there is no entry in the accounts, from the date on which the customs debt relating to the said goods was incurred.’
6. An exception to that three-year period, however, was provided for in Article 3 of that regulation as follows:
‘When the competent authorities find that it is following an act that could give rise to criminal court proceedings that the competent authorities were unable to determine the exact amount of the import duties or export duties legally due on the goods in question, the period laid down in Article 2 shall not apply.
Under these circumstances, the competent authorities shall take action for recovery in accordance with the provisions in force in this respect in the Member States.’
National law
7. At the time of the facts in the main proceedings, under Article 34(1) of the Code on tax procedure, as amended by Decree Law No 154/91 of 23 April 1991; the Portuguese tax authorities had a maximum period of 10 years in which to pursue recovery if, as the result of a fraudulent act, it had not been possible to determine the amount of the duties payable correctly at the time of the original assessment.
The case in the main proceedings and the questions referred
8. In October 1993, a vessel originating in Turkey unloaded in the harbour of Setúbal (Portugal) a certain volume of olive oil which was for delivery to ZF Zefeser, whilst the remainder of the consignment was declared for transit. The vessel then continued its voyage towards Ceuta (Spain), along the coast of North Africa. According to information provided by the Spanish authorities in October 2005, however, the ship in fact arrived without cargo.
9. On the basis of that information, on 9 April 1997 the customs authority of Setúbal issued an adjusted customs assessment to ZF Zefeser. Moreover, as a result of a complaint lodged by the Portuguese customs authority, criminal investigations against ZF Zefeser’s members were opened in relation to smuggling, falsification of documents, fraud and criminal conspiracy.
10. ZF Zefeser brought an action before the Tribunal Tributário de Primeira Instância of Setúbal (first instance fiscal court of Setúbal) against the customs assessment, arguing in particular that the customs debt was time barred. The action was dismissed on the ground that the relevant limitation period amounted to 10 and not 3 years, since the commission of acts that could give rise to criminal court proceedings had prevented the customs duties due from being correctly determined. That judgment was, however, set aside on appeal by the Tribunal Central Administrativo (Central Administrative Court), which considered the three-year limitation period to be applicable since in the intervening period a final judgment was handed down, acquitting the persons against whom criminal investigations had been initiated, partially on the basis of limitation and partially for lack of evidence.
11. When an appeal against the judgment of the Tribunal Central Administrativo was brought by the Fazenda Pública, the Supremo Tribunal Administrativo (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) For the purposes of Article 3 of [Regulation No 1697/79], is classification by the customs authority as ‘an act that could give rise to criminal court proceedings’ sufficient, or is it instead necessary that that classification should be made by the competent criminal court?
(2) In the latter hypothesis, is it sufficient for the competent criminal justice authority (in the case of Portugal, the Public Prosecutor’s Office) simply to lay a charge, or is it instead necessary that the debtor should be convicted in the relevant criminal proceedings?
(3) Also in the latter hypothesis, are different conclusions to be drawn from the fact that the court acquits the debtor by virtue of the application of the principle in dubio pro reo , [or] acquits him because it has been proved that the debtor did not commit the offence in question?
(4) What consequences follow if the Public Prosecutor’s Office does not lay a charge against the debtor, holding that there is no evidence of an act that could give rise to criminal court proceedings? Will such a decision preclude any action to recover the duty not collected?
(5) If the Public Prosecutor’s Office or the criminal court itself closes the case because the criminal proceedings are time barred, does [such a] decision make it impossible to bring the corresponding action to recover the duty not collected?’
The questions referred
The admissibility of the fourth question
12. By its fourth question, the national court is essentially asking whether a decision by the Public Prosecutor’s Office not to bring charges because of lack of evidence of the commission of an act that could give rise to criminal court proceedings precludes any action for recovery on the basis of Article 3 of Regulation No 1697/79.
13. However, in its observations submitted to the Court, ZF Zefeser argues that this issue is not relevant to the outcome of the case in the main proceedings, since, in this case, criminal proceedings were initiated by the Public Prosecutor’s Office.
14. In this regard, it must be noted that, although in the light of the division of responsibilities in the preliminary ruling procedure, the referring court alone can determine the subject-matter of the questions it proposes to refer to the Court, the Court has also stated that, in exceptional circumstances, it can examine the conditions in which the case was referred to it by the national court, in order to assess whether it has jurisdiction.
15. Such is the case, in particular, where the problem referred to the Court is purely hypothetical (see, to that effect, inter alia, Case C‑379/98 PreussenElektra  [2001] ECR I‑2099, paragraph 39; Case C‑390/99 Canal Satélite Digital  [2002] ECR I‑607, paragraph 19; and Case C‑380/01 Schneider  [2004] ECR I‑1389, paragraph 22). The spirit of cooperation which must prevail in the preliminary ruling procedure requires the national court to have regard to the function entrusted to the Court of Justice, which is to assist in the administration of justice in the Member States and not to deliver advisory opinions on general or hypothetical questions ( Schneider , paragraph 23, and Case C‑165/03 Längst  [2005] ECR I‑5637, paragraph 33).
16. However, as the Advocate General pointed out in point 74 of his Opinion, it is clear, both from the order for reference and from the observations submitted to the Court that, as regards the main proceedings, the Public Prosecutor’s Office did commence proceedings against the members of ZF Zefeser before the Tribunal Judicial de Setúbal, so that the question as to what consequences should be drawn from the absence of such proceedings is of no relevance to the outcome of the case in the main proceedings.
17. Consequently, the Court finds that the fourth question is inadmissible.
The first and fifth questions
18. By its first and fifth questions, which should be dealt with together, the national court wishes to know, in essence, which authority is competent to classify an act as ‘an act that could give rise to criminal court proceedings’ for the purposes of applying Article 3 of Regulation No 1697/79. More precisely, it is asking, first, whether it is for the tax authorities or the criminal courts to make such a classification, and secondly, whether a decision to file the complaint and not take any action or a decision to acquit taken by a judicial body by reason of the limitation on criminal proceedings precludes that classification.
19. The Portuguese Government, Ireland and the Commission of the European Communities suggest that the Court should answer that the relevant classification of the act is that adopted by the customs authorities. This follows not only from the wording of Article 3, but also from the general scheme of Regulation No 1697/79. In those circumstances, any time bar on criminal proceedings would not in itself preclude any recovery proceedings after expiry of the three-year period provided for in the second subparagraph of Article 2(1) of that regulation.
20. On the other hand, according to ZF Zefeser, observance of the principles of legal certainty and of the presumption of innocence requires that the classification of ‘an act that could give rise to criminal court proceedings’ should always flow from a final criminal conviction, since classification by the customs authorities is not relevant for the purposes of the application of Article 3 of Regulation No 1697/79. Accordingly, on the basis of that provision, limitation of criminal proceedings precludes any action for recovery of duty not collected.
21. For the purposes of answering these questions, it must be borne in mind, first of all, that the exception to the three-year limitation period is applicable, by virtue of Article 3 of Regulation No 1697/79, when ‘the competent authorities find that it is following an act that could give rise to criminal court proceedings that the competent authorities were unable to determine the exact amount of the import duties or export duties legally due on the goods in question’.
22. It is therefore clear from the wording of that provision that the authorities which are competent to classify an act as ‘an act that could give rise to criminal court proceedings’ are those authorities which, owing to the commission of such an act, were unable to collect customs duties due and are thus seeking to recover those duties post-clearance. As is provided, inter alia, in Article 2(1) of Regulation No 1697/79, it is clear that it is for the customs authorities of the Member States to determine the amount of those duties and to bring an action for their recovery (see, to that effect, Case C‑273/90 Meico-Fell  [1991] ECR I‑5569, paragraph 11, and Joined Cases C‑153/94 and C‑204/94 Faroe Seafood and Others  [1996] ECR I‑2465, paragraph 16).
23. Next, it should be pointed out that the argument advanced by ZF Zefeser, to the effect that the three-year limitation period may only be disregarded where there is a criminal conviction, is contradicted by the very wording of the first paragraph of Article 3 of Regulation No 1697/79.
24. That provision refers neither to a criminal conviction nor to the initiation of any criminal action, but refers unambiguously to the commission of an act that could simply give rise to criminal court proceedings. This is also confirmed by the various language versions of that provision, inter alia, by the Portuguese (‘un act o passível de procedimento judicial’), English (‘an act that could give rise to criminal court proceedings’), German (‘Handlungen, die strafrechtlich verfolgbar sind’), Spanish (‘un acto que puede dar lugar a la incoación de un proceso judicial punitivo’) and Italian (‘un atto passibile di un’azione giudiziaria repressiva’) versions.
25. It follows that, for the purposes of applying the exception provided in Article 3 of Regulation No 1697/79 relating to the limitation period applicable to an action for recovery of duties not collected, there is no requirement in that article for criminal court proceedings to have actually been initiated by the prosecuting authorities of a Member State and for those proceedings to lead to a conviction of those who have committed the act in question, nor is there a requirement, a fortiori , that such proceedings not be time barred.
26. Consequently, for the purposes of applying Article 3, classification of an act as ‘an act that could give rise to criminal court proceedings’ within the meaning of the first paragraph of that article falls within the competence of the customs authorities required to determine the exact amount of the import duties or export duties in question.
27. This finding cannot be called into question by ZF Zefeser’s argument to the effect that such an interpretation compromises the observance of the principles of legal certainty and of the presumption of innocence of the persons liable for payment of those duties.
28. Classification by the customs authorities of an act as ‘an act that could give rise to criminal court proceedings’ does not constitute a finding that an infringement of criminal law has actually been committed (see, to that effect, Meico-Fell , paragraph 9). As is clear from recitals one and two in the preamble to Regulation No 1697/79, that classification is made only in the context and for the purposes of an administrative procedure whose sole purpose is to enable those authorities to make good incorrect or insufficient collection of import or export duties.
29. Such classification is, naturally, without prejudice to the review which the courts of the Member States may carry out in respect of the decisions of the customs authorities and cannot impose any restriction on all the consequences, including those which relate to any reimbursement of duties improperly levied by those authorities, which, pursuant to national law, may flow from the decisions of those courts, in particular, of those ordering dismissal of the charges or the acquittal of the accused.
30. Accordingly, in the absence of Community rules governing the matter, it is for the domestic legal system of each Member State to lay down the conditions enabling persons liable to payment to contest the application of the exception under Article 3 of Regulation No 1697/79 in relation to the limitation on actions for recovery of duties not collected and to request, in that respect, that consequences may be drawn from rulings in court proceedings, provided that those conditions are not less favourable than those governing similar domestic actions and that they do not render practically impossible the exercise of rights conferred by Community law (see, by analogy, inter alia, Case 811/79 Ariete [1980] ECR 2545, paragraph 12, Case C‑63/01 Evans  [2003] ECR I‑14447, paragraphs 75 and 76, and Joined Cases C‑295/04 to C‑298/04 Manfredi and Others  [2006] ECR I‑6619, paragraphs 62 and 77).
31. In the light of the above considerations, the answer to the first and fifth questions must be that classification of an act as ‘an act that could give rise to criminal court proceedings’ within the meaning of the first paragraph of Article 3 of Regulation No 1697/79 falls within the competence of the customs authorities required to determine the exact amount of the import duties or export duties in question.
The second and third questions
32. In view of the answer given to the first and fifth questions, there is no need to answer the second and third questions asked by the national court.
Costs
33. 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.
Operative part
On those grounds, the Court (First Chamber) hereby rules:
Classification of an act as ‘an act that could give rise to criminal court proceedings’ within the meaning of the first paragraph of Article 3 of Council Regulation (EEC) No 1697/79 of 24 July 1979 on the post-clearance recovery of import duties or export duties which have not been required of the person liable for payment on goods entered for a customs procedure involving the obligation to pay such duties, falls within the competence of the customs authorities required to determine the exact amount of the import duties or export duties in question.