CELEX: 62011CJ0216
Failure of a Member State to fulfil obligations
Council Directive 92/12/EEC
Excise duties
Tobacco products acquired in one Member State and transported to another Member State
Purely quantitative assessment criteria
Article 34 TFEU
Quantitative restrictions on imports

By its application, the European Commission requests the Court of Justice to declare that, by using a purely quantitative criterion to assess whether the holding by private individuals of manufactured tobacco from another Member State is of a commercial nature, by applying that criterion per individual vehicle (and not per person), and in respect of all of the tobacco products in aggregate and by entirely precluding the importation of tobacco products from another Member State by private individuals where the quantity exceeds two kilograms per individual vehicle, the French Republic has failed to fulfil its obligations under Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (
OJ 1992 L 76, p. 1
, ‘the Directive’), and, specifically, under Articles 8 and 9 of the Directive, as well as under Article 34 TFEU.
Legal context
European Union legislation
Article 8 of the Directive provided:
‘As regards products acquired by private individuals for their own use and transported by them, the principle governing the internal market lays down that excise duty shall be charged in the Member State in which they are acquired.’
Under Article 9 of the Directive:
‘1.   Without prejudice to Articles 6, 7 and 8, excise duty shall become chargeable where products for consumption in a Member State are held for commercial purpose in another Member State.
In this case, the duty shall be due in the Member State in whose territory the products are and shall become chargeable to the holder of the products.
2.   To establish that the products referred to in Article 8 are intended for commercial purposes, Member States must take account, inter alia, of the following:
—
the commercial status of the holder of the products and his reasons for holding them,
—
the place where the products are located or, if appropriate, the mode of transport used,
—
any document relating to the products,
—
the nature of the products,
—
the quantity of products.
For the purposes of applying the content of the fifth indent of the first subparagraph, Member States may lay down guide levels, solely as a form of evidence. These guide levels may not be lower than:
(a)
Tobacco products
Cigarettes 800 items
cigarillos (cigars weighing not more 400 items
than 3 g each)
cigars 200 items
smoking tobacco 1,0 kg
…’
French legislation
Article 302 D of the General Tax Code (Code général des impôts, ‘CGI’), in the version in force on the expiry of the deadline set in the reasoned opinion sent to the French Republic on 23 November 2009, provided that:
‘I-1. Excise duty shall become chargeable: …
4.
Without prejudice to the provisions … of Articles 575 G and 575 H, when possession is established, in France, of alcohol, alcoholic beverages and manufactured tobacco for commercial purposes, and the holder is unable to prove, by means of an accompanying document, an invoice or a till receipt, as the case may be, that the products are moving under duty-suspension arrangements, or that duty has been paid in France …
In order to determine whether the holding in France of those products is for commercial purposes, the administration shall take the following factors into account:
a.
The professional activity of the holder of the products;
b.
The place where the products are located, the mode of transport used and the documents relating to the products;
c.
The nature of the products;
d.
The quantities of the products, in particular where those quantities exceed the guide thresholds set in Article 9(2) of the Directive 92/12/EEC ...’.
Under Article 575 G of the CGI:
‘After its retail sale, manufactured tobacco in quantities greater than 1 kilogram may not be moved without the document referred to in Article II of Article 302 M.’
Article 575 H of the CGI specified that:
‘With the exception of suppliers in warehouses, retail tobacconists, the persons referred to in point 3 of Article 565, the re-sellers referred to in the fourth paragraph of Article 568 and, in relation to the quantities fixed by decree of the minister with responsibility for the budget, the retailers referred to in the first paragraph of that article, no one may hold more than 2 kilograms of manufactured tobacco in warehouses, commercial premises or on board modes of transport.’
French administrative practice
At the time of the expiry of the deadline laid down in the reasoned opinion of 23 November 2009, the website of the Directorate General of Customs and Excise of the Ministry of the Budget stated:
‘General matters
If, when you travel to other countries of the European Union, you buy goods for your personal use, you will not be required to submit a declaration or to pay duties or taxes at the time of departure from or arrival in France.
… If you buy … tobacco, Community legislation has provided for guide thresholds relating to purchases by private individuals.
Above the thresholds applicable to tobacco … set out below, and on the basis of other criteria, your purchases may be deemed to be commercial by the French customs services. In that case, you must pay the duties and taxes applicable in France in respect of each product. These thresholds also apply in the case of departures from France to another Member State of the European Union.
Tobacco
Pursuant to Articles 575 G and 575 H of the [CGI] … the following provisions will apply with effect from 1 January 2006 to purchases of tobacco by private individuals in another Member State of the European Union, with the exception of the 10 new Member States:
—
You may bring back five cartons of cigarettes (in other words, 1 kilogram of tobacco) without holding a movement document.
Warning: the threshold applies per individual mode of transport or per person over the age of 17 in the case of public transport (the latter meaning any mode of transport carrying more than nine people, including the driver).
—
Where between 6 and 10 cartons are brought back, you must present a simplified accompanying document (SAD). In the absence of a SAD, a traveller who undergoes checks risks seizure of the tobacco and a penalty. The individual may abandon these quantities. In that case, no penalty will be imposed.
To obtain this document, you simply need to go to the first French customs office after the border.
—
It is prohibited to bring in more than 10 cartons of cigarettes (or 2 kilograms of tobacco) in all cases. A person who undergoes checks risks the sanctions (seizure of the tobacco and a penalty) referred to above.
In the case of public modes of transport (aircraft, ship, bus, train), these provisions apply per passenger.’
Pre-litigation procedure
The Commission considered that the French legislation and administrative practice concerning the importation of tobacco by private individuals were contrary to the Directive, to the principle of proportionality and to Article 28 EC and, on 23 October 2007 sent the French Republic a letter of formal notice, to which that Member State replied by letter dated 18 January 2008.
On 23 November 2009 the Commission issued a reasoned opinion requesting the French Republic to take the measures necessary to comply with that opinion within a period of two months from the date of its receipt. That Member State replied by a letter dated 22 January 2010.
Not being satisfied with the explanations provided by the French Republic, the Commission decided to bring the present proceedings.
The action
First complaint: infringement of Articles 8 and 9 of the Directive
The Commission claims that the French legislation and administrative practice are contrary to the Directive and, specifically, to Articles 8 and 9 of that directive, because the criteria for assessing whether tobacco products are being held for commercial purposes are purely quantitative, the thresholds laid down in Articles 575 G and 575 H of the CGI apply to all of the tobacco products held in aggregate, in the case of transport by private vehicle, those thresholds are applicable per vehicle and not per person, and the sanctions provided for infringement of those articles are particularly severe.
As a preliminary point, the French Republic contends that Articles 575 G and 575 H of the CGI regulate only the holding of tobacco and not the procedure and conditions for the collection of excise duties. The provisions are thus outside the scope of Articles 8 and 9 of the Directive. In any event, the French legislation and administrative practice are not contrary to the Directive and the sanctions provided for are proportionate.
It must be noted that the purpose of the Directive is to lay down a number of rules on the holding, movement and monitoring of products subject to excise duty, in particular so as to ensure that chargeability of excise duty is identical in all the Member States (Case
C-5/05
Joustra
[2006] ECR I-11075
, paragraph 27 and the case-law cited).
In that context, the Directive draws a distinction between, on the one hand, products held for commercial purposes and, on the other hand, products held for private purposes (
Joustra
, paragraph 28).
As regards products held for private purposes, Article 8 of the Directive provides that excise duties are payable in the Member State in which they were acquired (
Joustra
, paragraph 31). By contrast, as regards products held for commercial purposes, Article 9(1) of the Directive states, in essence, that excise duty becomes chargeable in the Member State in which the products are held.
Article 9(2) of the Directive sets out a number of criteria for the purposes of establishing whether products are held for commercial purposes. Specifically, as is apparent from the actual wording of the first subparagraph of Article 9(2), to establish whether products are held for commercial purposes, Member States must take account, inter alia, of several factors, the quantity of the products held being just one of the factors listed amongst several others. Furthermore, as regards that factor, the second subparagraph of Article 9(2) provides that Member States may lay down guide levels, solely as a form of evidence.
It follows, as the Advocate General has observed in points 20 and 21 of his Opinion, that Article 9(2) of the Directive does not allow Member States to determine that products are held for commercial purposes solely on the basis of a purely quantitative threshold for products held.
As regards the legislation at issue, it is true, as the French Republic points out, that Article 302 D of the CGI does not actually lay down a purely quantitative threshold for the purposes of establishing whether products are being held for commercial purposes.
However, as that article states that it applies ‘[w]ithout prejudice to … Articles 575 G and 575 H [of the CGI]’, the thresholds laid down by those latter two articles in fact become the only relevant factors for establishing whether products are held for commercial purposes, and this is borne out by the French administrative practice. The French Republic does not deny that those thresholds are purely quantitative in nature.
That Member State contends, in addition, that its legislation and administrative practice, under which those thresholds apply to all of the tobacco products held in aggregate and that, in the case of transport by private vehicle, the quantities of tobacco are assessed per vehicle and not per person, are not contrary to Article 9(2) of the Directive.
In that context, it must be recalled that, as is apparent from the second subparagraph of Article 9(2) of the Directive, if the Member States decide to lay down thresholds, which, under that provision, may be only guide thresholds as to the quantity of tobacco products held for the purposes of categorisation as commercial possession, then they must observe certain minimum thresholds.
First, in expressly setting minimum thresholds for several distinct categories of tobacco products, the Directive permits the Member States to lay down weight-thresholds for all of the tobacco products held in aggregate, only on condition that each of those minimum thresholds is complied with. The French Republic does not claim that this condition is satisfied as regards the thresholds laid down in Articles 575 G and 575 H of the CGI.
Secondly, since the aim of Article 9(2) of the Directive is to specify the conditions under which excise duty is to become chargeable to the holder of the products pursuant to the second subparagraph of Article 9(1), the minimum guide thresholds laid down in the second subparagraph of Article 9(2) of the Directive must be held to refer to that holder and, therefore, as applying per person.
It follows from the foregoing that by laying down, for the purposes of establishing whether tobacco products are held for commercial purposes, purely quantitative thresholds that apply to all of those products in aggregate and which, in the case of transport by private vehicle, are assessed per vehicle, and by imposing sanctions where those thresholds are exceeded, the French legislation and administrative practice are contrary to Article 9 of the Directive and, consequently, also to Article 8 of that directive.
The first complaint raised by the Commission is therefore well founded.
Second complaint: infringement of Article 34 TFEU
The Commission claims that Article 575 H of the CGI is also contrary to Article 34 TFEU. That national provision entirely precludes the importation into France, by private individuals, of tobacco products from another Member State, where the quantity exceeds two kilograms per individual vehicle, even though that quantity may be held for the individual’s personal use.
It should be recalled that where a particular sphere has been the subject of exhaustive harmonisation at Community level, any national measure relating thereto must be assessed in the light of the provisions of the harmonising measure and not those of the Treaty (Case
C-463/01
Commission
v
Germany
[2004] ECR I-11705
, paragraph 36 and the case-law cited).
In the present case, as is apparent from paragraph 24 above, it is established that Article 575 H of the CGI undermines a measure that harmonises exhaustively the way in which the quantity of tobacco products held may be taken into account by the Member States for the purposes of categorisation as commercial possession.
Since by its second complaint the Commission merely seeks to have a national measure, which must be assessed in the light of the provisions of that harmonisation measure, assessed in the light of the provisions of primary law, that complaint must be dismissed.
Consequently, it must be held that, by using a purely quantitative criterion to assess whether the holding by private individuals of manufactured tobacco from another Member State is of a commercial nature and by applying that criterion per individual vehicle (and not per person), and in respect of all of the tobacco products in aggregate, the French Republic has failed to fulfil its obligations under the Directive and, specifically, under Articles 8 and 9 thereof.
Costs
Under Article 138(1) of the Rules of Procedure of the Court of Justice, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. However, Article 138(3) of those rules provides that where each party succeeds on some and fails on other heads, the parties are, as a general rule, to bear their own costs. Since the Commission and the French Republic have each been partially unsuccessful, the parties must be ordered to bear their own costs.

On those grounds, the Court (Fourth Chamber) hereby:

1.
Declares that by using a purely quantitative criterion to assess whether the holding by private individuals of manufactured tobacco from another Member State is of a commercial nature and by applying that criterion per individual vehicle (and not per person), and in respect of all of the tobacco products in aggregate, the French Republic has failed to fulfil its obligations under Council Directive 92/12/EEC of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products and, specifically, under Articles 8 and 9 thereof;

2.
Dismisses the action as to the remainder;

3.
Orders the European Commission and the French Republic to bear their own costs.

[Signatures]
(
*1
)	Language of the case: French.