CELEX: 62003CJ0378
Failure of a Member State to fulfil obligations
Communities' own resources
Payment in instalments by the debtor
Recovery

By its action the Commission of the European Communities seeks a declaration that, because of late payment of own resources
following payment in instalments by the debtor, the Kingdom of Belgium has failed to fulfil its obligations under Articles
6, 10 and 11 of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the
system of the Communities’ own resources (OJ 2000 L 130, p. 1), which, with effect from 31 May 2000, repealed and replaced
Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the
Communities’ own resources (OJ 1989 L 155, p. 1), which was identical in subject-matter.

Legal context

The system of the Communities’ own resources
Article 2(1) of Regulation No 1552/89, which features in Title I (‘General provisions’), states:
‘For the purpose of applying this Regulation, the Community’s entitlement to the own resources referred to in Article 2(1)(a)
and (b) of Decision 88/376/EEC, Euratom shall be established as soon as the amount due has been notified by the competent
department of the Member State to the debtor. Notification shall be given as soon as the debtor is known and the amount of
entitlement can be calculated by the competent administrative authorities, in compliance with all the relevant Community provisions.’
That provision was amended with effect from 14 July 1996 by Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996 (OJ
1996 L 175, p. 3), the content of which was replicated in Article 2 of Regulation No 1150/2000, which states:
‘1.      For the purpose of applying this Regulation, the Community’s entitlement to the own resources referred to in Article 2(1)(a)
and (b) of Decision 94/728/EC, Euratom shall be established as soon as the conditions provided for by the customs regulations
have been met concerning the entry of the entitlement in the accounts and the notification of the debtor.
2.      The date of the establishment referred to in paragraph 1 shall be the date of entry in the accounting ledgers provided for
by the customs regulations.
…’
Article 6(1) and (2)(a) and (b) of Regulation No 1552/89, featuring in Title II (‘Accounts for own resources’) (now Article
6(1) and (3)(a) and (b) of Regulation No 1150/2000), states:
‘1.      Accounts for own resources shall be kept by the Treasury of each Member State or by the body appointed by each Member State
and broken down by type of resources.
2.      (a)   Entitlements established in accordance with Article 2 shall, subject to point (b) of this paragraph, be entered in the accounts
[commonly referred to as the ‘A accounts’] at the latest on the first working day after the 19th day of the second month following
the month during which the entitlement was established.
(b)   Established entitlements not entered in the accounts referred to in point (a) because they have not yet been recovered and
no security has been provided shall be shown in separate accounts [commonly referred to as the ‘B accounts’] within the period
laid down in point (a). Member States may adopt this procedure where established entitlements for which security has been
provided have been challenged and might upon settlement of the disputes which have arisen be subject to change.’
Article 9 of Regulations No 1552/89 and No 1150/2000, featuring in Title III (‘Making available own resources’), reads as
follows:
‘1.      In accordance with the procedure laid down in Article 10, each Member State shall credit own resources to the account opened
in the name of the Commission with its Treasury or the body it has appointed.
This account shall be kept free of charge.
2.      The amounts credited shall be converted by the Commission and entered in its accounts …’
According to Article 10(1) of Regulations No 1552/89 and No 1150/2000 respectively, which also features in Title III:
‘After deduction of 10% by way of collection costs in accordance with Article 2(3) [of Decision 88/376 and Decision 94/728,
respectively], entry of the own resources referred to in Article 2(1)(a) and (b) [of those decisions] shall be made at the
latest on the first working day following the 19th day of the second month following the month during which the entitlement
was established in accordance with Article 2.
However, for entitlements shown in [the B] accounts under [Article 6(2)(b) and Article 6(3)(b), respectively], the entry must
be made at the latest on the first working day following the 19th day of the second month following the month in which the
entitlements were recovered.’
Under Article 11 of Regulations No 1552/89 and No 1150/2000, also in Title III:
‘Any delay in making the entry in the account referred to in Article 9(1) shall give rise to the payment of interest by the
Member State concerned at the interest rate applicable on the Member State’s money market on the due date for short-term public
financing operations, increased by two percentage points. This rate shall be increased by 0.25 of a percentage point for each
month of delay. The increased rate shall be applied to the entire period of delay.’

National legislation
Article 263 of the General Law on Customs and Excise of 18 July 1977 (
Moniteur belge
of 21 September 1977), confirmed by the Law of 6 July 1978 (
Moniteur belge
of 12 August 1978) states:
‘The authorities can come to or allow an agreement as regards fines, confiscation, or closure of plants, factories or workshops,
on all infringements of this Law, and of the special laws on the collection of excise duties, in all and as many cases that
have mitigating circumstances, and in which one could reasonably suspect that the infringement is due more to negligence or
mistake than to a premeditated intention to defraud.’
Article 264 of that Law provides:
‘A transaction shall be prohibited if the infringement is to be regarded as capable of being adequately proven in law and
if the premeditated intention to defraud is beyond doubt.’
Under Article 281(1) and (2) of the same Law:
‘1.      All proceedings for fraud or summary or indictable offences in respect of which the laws on customs and excise provide for
penalties shall first be heard before the criminal courts, and appeals shall be heard before the competent appeal court, so
as to be heard and determined in accordance with the Code of Criminal Procedure.
2.      All of the abovementioned proceedings which result in fines, confiscations, or in closures of plants or factories shall be
initiated by the authorities, or in their name, before those courts, which, in any case, shall not rule on such cases without
first hearing the findings of the public prosecutor. However, following a written request from an official of the customs
and excise authorities of the rank of director or above, the public prosecutor can require the investigating magistrate to
provide him with information, the choice as to whether criminal proceedings are to be taken resting otherwise with the authorities.’

The pre-litigation proceedings
According to Commission Report No 96-0-1 of 29 September 1997, relating to an inspection of traditional own resources carried
out in Belgium from 19 to 23 November 1996, the Belgian authorities notified on 10 May 1994 a company which had imported textile
goods from Bangladesh under invalid certificates of origin of the findings made against it. The Belgian customs authorities
entered the customs duties involved, amounting to BEF 2 011 294, in the B accounts in the second quarter of 1993, after having
declared the fraud to the Commission during the first quarter of that year.
With a view to resolving this matter without bringing legal proceedings, on 31 August 1993 the Belgian authorities granted
to the debtor the facility of payment of his debt in monthly instalments of BEF 100 000. The total amount of the debt covered
by that transaction agreement amounted to BEF 2 223 710, including the abovementioned customs duties. The transaction agreement
contained a resolutive condition under which the right to prosecute subsisted, with the result that the customs authorities
could report the party that had infringed the customs laws if it did not carry out its obligations. That agreement also provided
that the amounts already paid by the debtor would be ‘placed on deposit’ with the customs authorities in case the party concerned
might default on his payment obligations and the competent authorities initiated proceedings for payment against the party
concerned.
The agreed payment in monthly instalments ceased at the end of August 1997, at which point a total amount of BEF 1 818 710 had
already been paid. The Belgian authorities brought proceedings before the competent court for the purpose of obtaining  a
writ of execution against the importer. The importer was ordered by a judgment of 30 September 1998 to pay the balance of
the debt in monthly instalments, the first of which was paid on 22 October 1998. The abovementioned amount of BEF 1 818 710 was
entered in the A accounts on 22 January 1998.
By letter of 12 May 1999, the Commission reminded the Belgian Government that, in case of payment of the customs debt by instalments,
all sums received had to be entered in the A accounts at the time at which they were received and had to be made available
to the Commission under the terms and conditions laid down in Article 10(1) of Regulation No 1552/89. Consequently, by letter
of 18 November 1999, the Commission asked the Belgian authorities to pay the sum of BEF 959 144 in respect of default interest.
As the Belgian authorities, by letters of 15 March 2000 and 12 February 2001, disputed the arguments put forward by the Commission,
the latter sent a letter of formal notice to the Kingdom of Belgium on 18 July 2001. The Kingdom of Belgium having maintained
its position in its reply to that letter, the Commission issued a reasoned opinion on 11 April 2002. The Kingdom of Belgium
was requested to take the measures necessary to comply with the reasoned opinion within two months of its notification.
After having been given an extension of two months to the time-limit for responding to the reasoned opinion, the Belgian authorities
stated, in their reply of 16 September 2002, that they would not be changing their view from that previously indicated.
It was in those circumstances that the Commission decided to bring the present action.

Admissibility of the action

Arguments of the parties
According to the Kingdom of Belgium, the Commission cannot rely, in the present proceedings, on grounds based on an infringement
of the provisions of Regulation No 1150/2000, which are in turn based on Regulation No 1552/89, as amended by Regulation No
1355/96, applicable since 14 July 1996. Such grounds are inadmissible, since they are not based on the provisions of the original
version of Regulation No 1552/89, which were applicable to the facts of the present case, the payment requests relating to
the certificates of origin in issue having been issued before 14 July 1996.
The Commission points out that Regulation No 1150/2000 is simply a codification of Regulation No 1552/89 and of the regulations
that followed and amended it. Regulation No 1150/2000 did not change any of the provisions relied on in the present case.

Findings of the Court
Under the Court’s case-law, the existence of an infringement in an action based on Article 226 EC must be assessed in the
light of the Community legislation in force at the close of the period prescribed by the Commission for the Member State concerned
to comply with its reasoned opinion (see, inter alia, Case C‑61/94
Commission
v
Germany
[1996] ECR I‑3989, paragraph 42, and Case C‑365/97
Commission
v
Italy
[1999] ECR I‑7773, paragraph 32).
Although the claims as stated in the application cannot in principle be extended beyond the infringements alleged in the operative
part of the reasoned opinion and in the letter of formal notice, it is none the less true that the Commission has standing
to seek a declaration that a Member State has failed to fulfil obligations which were created in the initial version of a
Community measure, subsequently amended or repealed, and which were maintained in force under the new provisions. Conversely,
the subject-matter of the dispute cannot be extended to obligations arising under new provisions which do not correspond to
those arising under the initial version of the measure concerned, as otherwise it would constitute a breach of the essential
procedural requirements of infringement proceedings (see, to this effect, Case C‑363/00
Commission
v
Italy
[2003] ECR I‑5767, paragraph 22).
It is not disputed that the obligations arising under Article 6(3)(a) and (b), Article 9(1), Article 10(1) and Article 11
of Regulation No 1150/2000 were already applicable under Article 6(2)(a) and (b), Article 9(1), Article 10(1) and Article
11 of Regulation No 1552/89 (see, concerning Articles 9(1) and 11, Case C‑363/00
Commission
v
Italy
, paragraph 23).
In those circumstances, the Commission has standing to seek a declaration that the Kingdom of Belgium has failed to fulfil
its obligations under Articles 6, 10 and 11 of Regulation No 1150/2000.

Substance

Arguments of the parties
The Commission submits that Article 6(3)(b) of Regulation No 1150/2000 allows established entitlements that have not yet been
collected to be entered in the B accounts when no security has been provided. The same, it argues, applies in regard to established
entitlements for which security has been provided, once those entitlements are the subject of a challenge which might entail
a change in their amounts.
The Commission points out that the absence of monthly payments agreed in the context of a transaction agreement, where such
an agreement is designed to put an end to a challenge or to prevent a challenge from arising, cannot be considered as a challenge
to the entitlements within the meaning of Article 6(3)(b), as such a challenge must be in writing. Furthermore, payment is
one of the ways of extinguishing an obligation and the debtor who pays a monthly instalment under a transaction agreement
does not intend to provide security, but is merely seeking to reduce the amount of his debt.
Consequently, Article 6(3)(b) of Regulation No 1150/2000 cannot under any circumstances apply to cases in which partial payment
is received from a debtor acting on the basis of a transaction agreement containing an accord on payment in instalments. Such
amounts, apart from any sum corresponding to fines imposed by the national authorities, must, according to the Commission,
be transferred from the B accounts to the A accounts as and when each instalment is paid by the debtor and not, as the Belgian
Government maintains, after the whole amount of the customs debt has been received. Failing that, interest for late payment
would be owed under Article 11 of Regulation No 1150/2000, without any need to examine the reasons for such a delay. According
to the Commission, the effect of the current practice of the Belgian authorities is to negate the usefulness of Article 6(3)(a)
of that regulation, the aim of which is to ensure the proper functioning of the system of the Communities’ own resources.
Nor would the purpose for which the system of B accounts was introduced, and which allows the Commission better to oversee
the actions of Member States in the recovery of own resources, be fulfilled if every Member State were free to determine under
its domestic law the moment at which an amount is to be regarded as having been ‘recovered’ within the meaning of Regulation
No 1150/2000.
According to the Commission, the distinction in Belgian law between the concepts of ‘deposition’ and ‘recovery’ has no bearing
on obligations to transfer own resources under Community law. The very aim of a transaction is to avoid proceedings, or to
end them definitively. When the debtor pays the amounts owed, he does so unconditionally and precisely because he does not
challenge the customs debt. These duties must therefore be regarded as having been recovered within the meaning of Article
10 of Regulation No 1150/2000, even if subsequently the transaction is not carried out in full and criminal proceedings are
restarted under Belgian law. Community law must be applied in a uniform and efficient manner in the interest of rapid availability
of the Communities’ own resources.
The Kingdom of Belgium maintains that the B accounts were established so as to allow Member States to delay the availability
of established entitlements until their actual recovery. The import duties in issue were entered in the B accounts because
no security was given and the customs duties had not been received. The Belgian Government observes that this initial entry
of the amounts in issue in the B accounts was not disputed by the Commission, and it maintains that the Commission is wrong
to take the view that, subsequently, the Belgian State should have transferred to the A accounts the payments on account in
monthly instalments which were put on deposit with the national authorities, and should have made them available to the Commission.
According to the Belgian Government, Community law contains no provision relating to transfers between B and A accounts, with
the result that payments in instalments can be taken into account only after the transaction has been carried out in full
or following its enforced implementation.
The notion of ‘recovery’ under Community law covers, in the context of a transaction, a payment which entails an unconditional
transfer of property; this is explained by the fact that amounts paid as own resources represent an available part of the
Community budget. Consequently, payments ‘deposited’ with the customs authorities on behalf of the debtor should be entered
in the B accounts.
In transactions involving deferred payment, such as in the present case, the transfer of property takes place either at the
moment when the customs debt is paid in its entirety and criminal proceedings are terminated, or when the customs debt is
established and the amounts on deposit are granted to the Belgian State by a court before which an action has been brought
following the halt in payments. It is only in this latter case that there is a transfer of property to the Belgian State and
consequently actual recovery within the terms of Article 6 of Regulation No 1552/89.
The argument that payments on deposit are definitive and not provisional payments is irreconcilable with the agreement reached
by the Belgian State and the debtor and entails the partial termination of criminal proceedings, which is inconceivable from
the point of view of Belgian criminal law, as criminal proceedings can be terminated only upon full payment of the amount
owed.
It was necessary for the transaction to be made subject to a resolutive condition because it allowed the authorities to be
no longer subject to their commitment not to commence criminal proceedings. The judgment of the court before which an action
has been brought following a halt in payments constitutes the only means of enforcing payment of the duties and fines involved.
If the resolutive condition were to be considered invalid on the basis of the primacy of Community law, all transactions would
ultimately become impossible.
The Belgian Government adds that if, contrary to its opinion and that of the Commission, the payment in instalments were to
be viewed as security within the meaning of Article 6(2)(b) of Regulation No 1552/89, and not just as a provisional and partial
performance of commitments made in the context of the transaction, with the result that an entry in the B accounts would not
be justified under that provision, in any event, the halt in the payment of instalments, which entails the annulment of the
transaction, would be a situation equivalent to a challenge to the debt within the meaning of that provision and would thus
justify an entry in the B accounts, because it obliges the Belgian State to initiate legal proceedings in order to obtain
an enforceable order in respect of the entire amount owed.
Finally, the Kingdom of Belgium contends that, in this case, the question of effective recovery arose only at the time of
the judgment of 30 September 1998, the date on which the customs debt was definitively established. Having entered in the
A accounts and made available to the Commission an amount corresponding to the customs debt in issue from January 1998 onwards,
that is to say, before the definitive receipt of that amount, the Belgian State was not acting after the expiry of the period
laid down in Article 11 of Regulation No 1552/89, and thus no interest for late payment is due.

Findings of the Court
It should be noted that the discharge of the customs debt in issue, neither the existence nor the amount of which is disputed,
was the subject of a transaction agreement by which the debtor obtained the facility of payment in instalments (see paragraph
12 above).
By this action, the Commission seeks to have established that the Kingdom of Belgium failed to fulfil its obligations under,
first, Articles 6 and 10 of Regulation No 1150/2000 in not transferring from the B accounts to the A accounts the amount of
the payments in instalments as and when they were paid and, second, under Articles 10 and 11 of Regulation No 1150/2000, in
not making available to the Commission either the amounts in issue within the prescribed time-limits or any interest for late
payment which arise from them.
The alleged erroneous entry in the accounts of the payments in instalments
In the present case, the Commission does not blame the Belgian Government for having entered the amount of the customs debt
in the B accounts immediately after the establishment of that debt. Its complaint is that the amounts pertaining to the payments
in instalments agreed under the aforementioned transaction agreement should have been transferred from the B accounts to the
A accounts as and when they were received by the customs authorities.
It must be stated that, as regards the entry of own resources in the accounts, Article 6(1) of Regulation No 1150/2000 specifies
that accounts for own resources must be kept by the Treasury of each Member State or by the body appointed by each Member
State. Under Article 6(3)(a) and (b) of Regulation No 1150/2000, Member States are obliged to enter in the A accounts entitlements
established in accordance with Article 2 of that regulation at the latest on the first working day after the 19th day of the
second month following the month during which the entitlement was established, subject always to the option to enter in the
B accounts within the same time-limit the established entitlements that have not yet been recovered and for which no security
has been provided, as well as the established entitlements ‘for which security has been provided [that] have been challenged
and might, upon settlement of the disputes which have arisen, be subject to change’.
For the purpose of making own resources available, Article 9(1) of Regulation No 1150/2000 states that each Member State is
to credit own resources to the account opened in the name of the Commission in accordance with the procedure laid down in
Article 10 of that regulation. Under Article 10(1) of Regulation No 1150/2000, after deduction of collection costs, the entry
of own resources is to be made at the latest on the first working day following the 19th day of the second month following
the month during which the entitlement was ‘established’ in accordance with Article 2 of that regulation, with the exception
of entitlements shown in the B accounts pursuant to Article 6(3)(b) thereof, for which the entry must be made at the latest
on the first working day following the 19th day of the second month following the month in which the entitlements were ‘recovered’.
As the Belgian Government correctly submits, Regulation No 1150/2000 contains no provision relating to the transfer of own
resources entitlements from B to A accounts.
Once the conditions for an initial entry of the amount of the customs debt in the B accounts are present, as the Commission
accepts in the present case on the ground that security was not provided for the customs debt, the own resources must be made
available to the Commission within the period laid down in Article 10(1) of Regulation No 1150/2000, which runs from the time
of ‘recovery’ of those amounts, and not from the time at which the entitlements are established, as is the case for amounts
that must be entered in the A accounts.
Therefore, to require the customs authorities, as the Commission submits, to transfer to the A accounts the amount of the
payments in instalments made in order to discharge a customs debt which had been correctly entered in the B accounts would
have the paradoxical consequence of making the period for the availability of entitlements entered in the A accounts run against
those amounts, with the result that all the amounts received after the expiry of that period, which runs from the point at
which the customs debt is established, would necessarily be belatedly credited to the Commission’s account, even though it
was possible for those same amounts to be correctly entered in the B accounts prior to their being received by the customs
authorities.
This part of the Commission’s complaint must therefore be dismissed.
The alleged lateness in making the own resources available
It is clear from the foregoing that, to the extent that, as in the present case, the amount of the customs debt had been correctly
entered in the B accounts, own resources must be made available to the Commission at the latest on the first working day following
the 19th day of the second month following the month in which the entitlement was ‘recovered’.
It is therefore necessary to determine whether, as the Commission maintains, the amounts received as payments in instalments
on the basis of a transaction agreement such as that in issue in the present case are to be regarded as having been ‘recovered’
within the meaning of the second subparagraph of Article 10(1) of Regulation No 1150/2000, meaning that such amounts should
be entered as and when they are received in the Commission’s account within the time-limit laid down in that provision.
In that regard, it is important to note at the outset that the legislation concerning the recovery of customs debts must be
interpreted in the light of the aim of securing efficient and rapid availability of the Community’s own resources (see inter
alia, to that effect, Case C‑112/01
SPKR
[2002] ECR I‑10655, paragraph 34, and Case C‑460/01
Commission
v
Netherlands
[2005] ECR I‑2613, paragraphs 60, 63, 69 and 70).
Furthermore, as the Advocate General has explained in points 46 and 47 of her Opinion, the introduction of the B accounts
also seeks, as the fifth recital in the preamble to Regulation No 1552/89 (recital (11) in the preamble to Regulation No 1150/2000)
makes clear, to enable the Commission to monitor more closely the action taken by Member States to recover own resources,
taking into account the financial risk that they incur.
However, as is apparent from paragraph 12 above, in accordance with the transaction agreement, the monthly instalments paid
by the debtor remained ‘on deposit’ with the customs authorities in case the party concerned might default on his payment
obligations and the competent authorities initiated proceedings for payment against the party concerned.
In those circumstances, first, having regard for the need to secure the rapid and effective availability of the Community’s
own resources, and, second, taking proper account of the protection of the financial interests of the Member States, Article
10 of Regulation No 1150/2000 must be interpreted as meaning that the amounts received in cases of payment of a customs debt
in instalments under a transaction agreement such as that here in issue must be regarded as having been recovered within the
meaning of that provision, with the result that they should be credited to the Commission’s account at the latest on the first
working day after the 19th day of the second month following the month in which they were received.
Contrary to the argument put forward by the Belgian Government and summarised in paragraphs 33 and 34 above, this interpretation
of Community customs legislation concerning the recovery of own resources does not prevent the customs authorities from prosecuting
in cases where the agreed payments are halted, if only because this interpretation has no bearing on the classification of
those payments under Belgian law and the transaction agreement.
The failure to pay interest for late payment
Under Article 11 of Regulation No 1150/2000, any delay in making the entry in the account referred to in Article 9(1) of that
regulation gives rise to the payment of interest by the Member State concerned at the interest rate applicable to the entire
period of delay. That interest is payable in respect of any delay, regardless of the reason for the delay in making the entry
in the Commission’s account (see, inter alia,
Commission
v
Netherlands
, paragraph 91).
Consequently, in so far as it follows from the foregoing that the crediting of the amount of the monthly instalments received
under the transaction agreement to the Commission’s account was late, interest for late payment, which the Kingdom of Belgium
does not dispute was not paid, is due under Article 11 of Regulation No 1150/2000.
In light of the foregoing, it must be held that, because of the late transfer of own resources in the case of receipt of payments
in instalments from a debtor, the Kingdom of Belgium has failed to fulfil its obligations under Articles 10 and 11 of Regulation
No 1150/2000, which, with effect from 31 May 2000, repealed and replaced Regulation No 1552/89, which was identical in subject-matter.

Costs
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been
applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Kingdom of Belgium has
been for the most part unsuccessful in its pleas in law, the latter must be ordered to pay the costs.
On those grounds, the Court (First Chamber) hereby:
1.
Declares that, because of the late payment of own resources in the case of receipt of payments in instalments from a debtor,
the Kingdom of Belgium has failed to fulfil its obligations under Articles 10 and 11 of Council Regulation (EC, Euratom) No
1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities’ own resources, which,
with effect from 31 May 2000, repealed and replaced Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing
Decision 88/376/EEC, Euratom on the system of the Communities’ own resources, which was identical in subject-matter;
2.
Dismisses the remainder of the application;
3.
Orders the Kingdom of Belgium to pay the costs.
[Signatures]
*
Language of the case: French.