Judgment;Summary — ECLI:EU:C:2020:809
Date: 2020-10-08
Language of the case: Dutch
Court formation: Seventh Chamber
Subject matter: Free movement of goods;Customs Union
Procedure: Reference for a preliminary ruling
Origin: Netherlands

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
23 April 2019 
Referring court:  
Hoge Raad der Nederlanden (Netherlands) 
Date of the decision to refer:  
19 April 2019 
Appellant in cassation:  
Staatssecretaris van Financiën 
Respondent in cassation:  
Exter BV 
 
Subject matter of the action in the main proceedings 
On importation into the European Union, certain goods (hydrolysates) from 
Thailand were placed under the inward processing procedure by the application of 
the suspension system. At the time of importation, a preferential tariff measure 
applied, which was subsequently suspended. The imported goods were ultimately 
not re-exported, but placed under the ‘release for free circulation’ procedure. 
Since the preferential tariff measure had been suspended at that time, the tax 
authority determined the customs duties due on the basis of the normal tariff.  
In the procedure in the main proceedings, the Staatssecretaris (State Secretary) 
challenges in cassation the view of the court of second instance that the customs 
debt should have been determined on the basis of the taxation elements 
appropriate to the import goods at the time of acceptance of the declarations 
placing those goods under the inward processing procedure, and that the customs 
duties therefore had to be reduced to the preferential tariff.  
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-330/19 
 
2  
Subject matter and legal basis of the request for a preliminary ruling 
The question arises as to whether the applicable rate of import duties is an element 
that comes within the concept of taxation elements in Article 121(1) of the 
Community Customs Code (‘CCC’). This gives rise to the question whether the 
import duties should be calculated on the basis of the preferential tariff measure 
applicable at the time when the goods were placed under the inward processing 
procedure by the application of the suspension system, or on the basis of the 
normal tariff, having regard to the fact that the preferential tariff measure was 
suspended when the goods were released for free circulation. Procedure under 
Article 267 TFEU. 
Question referred for a preliminary ruling 
Does Article 121(1) of the Community Customs Code mean that a preferential 
tariff measure for the application of which the import goods were eligible at the 
time of their placement under the inward processing procedure using the 
suspension system may also be taken into account when determining the amount 
of the customs debt incurred when the goods were released for free circulation, 
whether or not in the unaltered state, if that tariff measure was suspended on the 
date of acceptance of the declaration for release for free circulation? 
Provisions cited  
Article 4(9) and (10), Article 20(3)(c), (d), (e) and (f), and 20(4) and (5), 
Article 67, Article 79, second paragraph, Article 112, Article 114, Article 117(c), 
Article 121(1), Article 122, Article 135, Article 144, Article 151, Article 201(2), 
Article 214(1) of the CCC. 
Council Regulation (EEC) No 1999/85 of 16 July 1985 on inward processing 
relief arrangements 
Council Regulation (EC) No 732/2008 of 22 July 2008 applying a scheme of 
generalised tariff preferences from 1 January 2009 
Regulation (EU) No 978/2012 of the European Parliament and of the Council of 
25 October 2012 applying a scheme of generalised tariff preferences and repealing 
Council Regulation (EC) No 732/2008  
Commission Regulation (EU) No 1006/2011 of 27 September 2011 amending 
Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff  
Commission Implementing Regulation (EU) No 927/2012 of 9 October 2012 
amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and 
statistical nomenclature and on the Common Customs Tariff  
EXTER 
 
3 
Commission Implementing Regulation (EU) No 1213/2012 of 17 December 2012 
suspending the tariff preferences for certain GSP beneficiary countries  
Commission Implementing Regulation (EU) No 1001/2013 of 4 October 2013 
amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and 
statistical nomenclature and on the Common Customs Tariff  
Brief summary of the facts and the procedure in the main proceedings 
1 Between 23 May 2012 and 23 May 2015, Exter was allowed to use the ‘inward 
processing’ customs procedure for protein hydrolysates, a raw material in the food 
industry, by the application of the suspension system. Between 12 November 
2012 and 17 June 2013, it placed eight consignments under that procedure.  
2 At the time of importation, the hydrolysates were classified under subheading 
2106 90 92 of the Combined Nomenclature, for which the normal customs duty 
tariff at that time was 12.8%.  
3 However, until 31 December 2013 a tariff measure applied to hydrolysates under 
which the customs duty rate for goods from a beneficiary country, including 
Thailand, was reduced to 8.9%.  
4 Between 1 January 2014 and 31 December 2016 inclusive, that preferential tariff 
measure was suspended. As a result, the normal tariff of 12.8% was applicable in 
that period.  
5 After processing, Exter decided not to re-export some of the processed 
hydrolysates, but to terminate the inward processing customs procedure. Between 
4 February 2014 and 26 August 2014, it declared those products for free 
circulation, stating that the goods were from Thailand and that it had the required 
certificates of origin. It asked the tax authority, when calculating the customs debt, 
to take into account the preferential tariff of 8.9% laid down in Regulation 
No 732/2008. The tax authority refused to do so because the tariff measure was 
suspended at the time of the declarations for release for free circulation, and 
applied the normal tariff rate of 12.8%.  
6 In the appeal lodged by the tax authority, the court held that, in accordance with 
Article 121(1) of the CCC, the amount of the customs debt should have been 
determined on the basis of the taxation elements appropriate to the hydrolysates at 
the time of acceptance of the declarations placing those goods under the inward 
processing procedure. The court therefore reduced the applied tariff to the 
preferential tariff. The Staatssecretaris van Financiën (State Secretary for Finance) 
then lodged an appeal in cassation.  
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-330/19 
 
4  
Main submissions of the parties to the main proceedings  
7 The Staatssecretaris argues, contrary to the judgment of the court of second 
instance referred to in paragraph 6, that the applicable rate of import duties 
resulting from Article 20 of the CCC is not covered by the concept of taxation 
elements referred to in Article 121(1) of the CCC. If the tariff or a preferential 
tariff measure were to be covered thereby, then that court has disregarded the 
specific conditions that, under Article 20(4) of the CCC, apply to the application 
of a preferential measure.  
Brief summary of the reasons for the referral 
8 Exter terminated the inward processing customs procedure for the products, not by 
re-exporting the products, but by placing them under the ‘release for free 
circulation’ customs procedure.  
9 Under the second paragraph of Article 79 of the CCC, the customs procedure for 
release for free circulation includes the charging of any duties legally due. Under 
Article 67 of the CCC, the date to be used for the purposes of all the provisions 
governing the customs procedure for which the goods are declared is the date of 
acceptance of the declaration by the customs authorities. 
10 Under Article 201(1) and (2) of the CCC, a customs debt is incurred on the date of 
acceptance by the customs authorities of the customs declaration for release of 
goods for free circulation. Under Article 214(1) of the CCC, the amount of that 
customs debt is determined on the basis of the rules of assessment appropriate to 
those goods at the time when the customs debt in respect of them is incurred.  
11 This means that, upon release for free circulation of compensating products, 
import duties are due under the Community provisions in force at the time of 
acceptance of the declaration. One of those Community provisions is 
Article 20(3)(c) of the CCC, from which the applicable tariff follows. It also 
means that, when the compensating products are released for free circulation, at 
the request of the declarant, any preferential tariff measures applicable at that time 
for access to the EU market [Article 20(3)(d), (e) and (f) of the CCC] may, in 
accordance with Article 20(4) of the CCC, replace the import duties referred to in 
Article 20(3) of the CCC. 
12 Articles 121 and 122 of the CCC provide for two different calculation bases for 
situations where a customs debt is incurred for goods placed under the inward 
processing procedure.  
13 Under Article 121(1) of the CCC, where a customs debt is incurred, the amount of 
such debt is, as a rule, to be determined on the basis of the taxation elements 
appropriate to the import goods at the time of acceptance of the declaration of 
placing of those goods under the inward processing procedure. That arrangement 
EXTER 
 
5 
applies regardless of whether the import goods have since been processed or 
treated.  
14 By way of derogation from Article 121, Article 122 of the CCC provides that, at 
the request of the declarant, the compensating products are subjected to the import 
duties appropriate to them, the amount of the customs debt being determined by 
other criteria.  
15 In the opinion of the court of second instance, Article 121(1) of the CCC provides 
for a derogation from the provisions mentioned in paragraphs 9 and 10 in the 
sense that, if a customs debt is incurred due to release for free circulation, the 
products that were placed under the inward processing procedure should be taxed 
at the rate of customs duty applicable to the import goods at the time when they 
were placed under the latter procedure, in casu a preferential tariff measure.  
16 The plea put forward by the Staatssecretaris raises the question whether 
Article 121(1) of the CCC leads to a preferential tariff measure, which had in the 
meantime been suspended, being applied to the release for free circulation of 
goods previously placed under the inward processing procedure using the 
suspension system.  
17 On the one hand, Article 121(1) of the CCC could be interpreted as meaning that 
the concept of taxation elements within the meaning of the CCC also covers the 
import duties and preferential tariff measures referred to in Article 20(3) of the 
CCC. The English-language version of that provision refers to ‘the rates and other 
items of charge’ [Dutch-language version: ‘percentages en andere 
heffingsgrondslagen’].  
18 According to that interpretation, both the import goods in the unaltered state and 
the compensating products are subject to the amount that would be legally payable 
if the import goods had been immediately released for free circulation. By that 
interpretation, Article 121(1) of the CCC essentially leads to a charge based on the 
amount for which ‘relief from import duties’ had been granted at the time of 
placement under the inward processing procedure for import goods. Articles 3 and 
16 of Directive 69/73/EEC provided for such an exemption. This view means that 
it is irrelevant whether the preferential tariff measure has in the interim been 
suspended or terminated, and that it is also irrelevant whether the normal tariff 
was again applicable at the time when the customs debt was calculated.  
19 On the other hand, it could be argued that the concept of taxation elements within 
the meaning of the CCC, and thus also within the meaning of Article 121(1) 
thereof, has no bearing on normal or preferential rates. In general, when 
determining an amount of duties, levies or other charges legally due, a 
terminological distinction is made between, on the one hand, the applicable tariffs 
in the form of tariff percentages or specific duties and any (preferential) tariff 
measures, and, on the other hand, the taxation elements to which those rates and 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-330/19 
 
6  
tariff measures must be applied, such as the value, the weight or the quantity of 
the goods.  
20 This interpretation establishes, by way of derogation from Article 214 of the CCC, 
the amount of import duties payable (the customs debt) on the basis of the 
elements (such as value, weight or quantity) that are appropriate for goods 
imported in an unaltered state, that is to say, in the state in which the import goods 
were on the date of acceptance of the declaration for placement under the inward 
processing procedure.  
21 This interpretation limits the infringement of the principle that customs duties are 
to be calculated in accordance with the legal and factual situation at the time when 
the customs debt was incurred.  
22 In the present case, this would mean that the interested party would not be entitled 
to the preferential tariff measure in 2014. Indeed, at the time when the customs 
debt had to be calculated (the date of acceptance of the declaration for release for 
free circulation), the preferential tariff measure was suspended and thus the 
normal rate applied once more.  
23 The referring court prefers the explanation set out in paragraph 19 above. After 
harmonisation of the legal provisions regarding goods entering the customs 
territory and needing to be assigned a customs-approved treatment or use, the 
starting point for placement under the inward processing procedure is no longer 
that the goods are (conditionally) exempt from the import duties applicable at the 
time of importation, but that the duties are (still) levied at the time when the goods 
are released for free circulation in an (ir)regular manner.  
24 In addition, it appears that Article 121(2) of the CCC is based on the premise that, 
under Article 201 of the CCC, there must be a preferential tariff measure in force 
at the time when the customs debt is incurred.  
25 Under Article 20(5) of the CCC, preferential tariff measures in the form of tariff 
quotas and tariff ceilings can no longer apply when the import volume stipulated 
by the tariff quotas has been reached or, as regards tariff ceilings, when the 
measure is terminated by a ruling of the Commission due to the attainment of a 
certain volume of imports.  
26 It is therefore possible that the reason for introducing the suspension measure no 
longer applies and that preferential treatment for imports of the goods in question 
is no longer justified due to the situation of the relevant industries which 
manufacture the same goods in the European Union.  
27 The continued application of a reduced tariff would undermine the competitive 
position of the EU industries producing the same goods, which is not in line with 
the principle laid down in Article 117(c) of the CCC that, when the inward 
processing customs procedure is applied, the essential interests of Community 
producers should also be taken into account.  
EXTER 
 
7 
28 Finally, the referring court takes the view that the plea put forward by the 
Staatssecretaris correctly assumes that the preferential tariff measures referred to 
in Article 20(4) of the CCC are not, like the rates and items of charge referred to 
in Article 20(3)(c) of the CCC, automatically applicable, but that a declarant must 
request their application.  
29 It should also be noted that the concept of items of charge is used in various 
articles of the CCC, such as in Articles 112, 135, 144, 151, 153, 158 and 214. The 
interpretation of that concept may therefore also have consequences for the 
application of those articles.