Opinion of Mr Advocate General Jacobs delivered on 29 April 1999. - Firma Söhl & Söhlke v Hauptzollamt Bremen. - Reference for a preliminary ruling: Finanzgericht Bremen - Germany. - Community Customs Code and implementing Regulation - Exceeding of time-limits for the customs clearance of non-Community goods in temporary storage - Failure having "no significant effect on the correct operation of the temporary storage or customs procedure in question" - Extension of period - "Obvious negligence". - Case C-48/98.



European Court reports 1999 Page I-07877



Opinion of the Advocate-General

1 In this case the Finanzgericht (Finance Court), Bremen, has referred a series of questions on the interpretation of the Community Customs Code (1) and the validity and interpretation of the regulation implementing the Code. (2)

2 Before turning to the facts and the main proceedings and setting out the legislation in more detail, it is helpful to summarise the relevant Community customs procedures laid down by the Customs Code.

Outline of the relevant customs procedures

3 Goods brought into the Community customs territory must immediately be conveyed to a customs office or to a free zone; (3) in the former case, the goods must be presented to customs (4) and covered by a `summary declaration' (5) identifying the goods. The goods must be assigned a customs-approved treatment or use, (6) pending which they have the status of goods in temporary storage. (7) The formalities necessary for that assignment must be carried out within 20 days from the lodging of the summary declaration in the case of goods carried otherwise than by sea (8) although the customs authorities may, where circumstances so warrant, authorise an extension of that period provided that the extension does not exceed the genuine requirements justified by the circumstances. (9)

4 `Customs-approved treatment or use of goods' includes the placing of goods under a customs procedure and their re-exportation from the Community customs territory. (10) Customs procedures include release for free circulation. (11)

5 A customs debt is incurred in a number of specified ways including non-fulfilment of one of the obligations arising, in respect of goods liable to import duties, from their temporary storage, unless it is established that those failures have no significant effect on the correct operation of the temporary storage or customs procedure in question. (12)

6 The implementing regulation lists a number of failures considered to have no significant effect on the correct operation of the temporary storage or customs procedure in question, provided inter alia that they do not imply obvious negligence on the part of the person concerned. It is clear from the wording of the legislation that the list is intended to be exhaustive. (13) The failures listed include exceeding the time-limit allowed for assignment of the goods to a customs-approved treatment or use where the time-limit would have been extended had an extension been applied for in time. (14)

7 Where, moreover, there would be exemption under the legislation from customs duties incurred on release for free circulation or on export, such exemption must also apply where a customs debt is incurred because of non-fulfilment of the obligations of temporary storage where the behaviour of the declarant implies neither fraudulent dealing nor manifest negligence and the other conditions for exemption are satisfied. (15)

8 Import or export duties may in addition be repaid or remitted in situations to be specified in the implementing regulation and resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned. (16) Those specified situations include where the customs debt has been incurred otherwise than through release for free circulation or the placing of goods under the temporary importation procedure with partial relief from import duties and the person concerned is able to produce a document showing that if the goods had been entered for free circulation they would have been eligible for Community treatment or preferential tariff treatment. (17)

9 Outward processing is a procedure under which Community goods are temporarily exported for processing outside the Community customs territory: the products resulting from such processing may then be released for free circulation with total or partial relief from import duties. (18)

The facts and the main proceedings

10 The applicant, a general partnership carrying on a textile business, imports large quantities of goods following outward processing and sometimes re-exports non-Community goods introduced into the customs territory of the Community. During the relevant period in the present case, the non-Community goods introduced into the customs territory of the Community for the applicant were regularly presented at the Hohe Tor clearance office of the Hauptzollamt Bremen-Ost (East Bremen Principal Customs Office; `the Customs Office') and thereafter released to the applicant for temporary storage.

11 In August 1993 the applicant wrote informing the Customs Office that it had not yet completed the changeover of its customs calculations to an electronic system which would enable goods to be cleared more rapidly; consequently, it would not in every case be able to meet the 20-day deadline for customs clearance. The Customs Office thereupon informed the Hohe Tor clearance office that the 20-day deadline could only exceptionally be extended upon application. In January 1994 the Customs Office informed the applicant that the clearance office had in the past regularly drawn the applicant's attention to the expiry of deadlines in respect of goods which had initially been released to it for storage but that, having regard to the Customs Code which had entered into force on 1 January 1994, that notification practice could no longer continue. Consequently, it would be necessary for the applicant to pay substantially more attention to compliance with the deadlines than it had done in the past. At the same time, it was pointed out to the applicant that a customs debt in respect of imported goods arose under Article 204(1)(a) in conjunction with Article 49 of the Customs Code.

12 Between mid-February 1994 and the end of 1994, the applicant consistently exceeded the storage time-limits before assigning goods to a customs-approved treatment or use. In October 1994 the Customs Office wrote to the applicant pointing out the consequences in terms of customs debt and requesting it to state the reasons for its failure to meet the deadlines. The applicant did not reply. Subsequently the applicant made several applications for an extension of time, arguing that a considerable backlog of work had unforeseeably arisen as a result of its change-over to an electronic accounting system and that it had suffered staff shortages due to illness.

13 Between 20 October 1994 and 15 February 1995 the Customs Office issued 125 notices of assessment concerning customs clearances relating to the period from February to December 1994; the notices were based on Article 204(1) of the Code. The applicant lodged appeals against all the notices, arguing essentially that no customs debt had arisen under that provision since its failures had had no significant effect on the correct operation of the temporary storage or customs procedure in question. In the alternative the applicant claimed repayment of the duties levied in accordance with Article 239 of the Code in conjunction with Article 900(1)(o) of the implementing regulation. By two decisions of 23 May 1995 the Customs Office dismissed the applicant's appeal and refused the application for repayment; by decision of 12 May 1997 it dismissed the applicant's appeal against that refusal.

14 In June 1995 the applicant brought proceedings before the Finanzgericht, contesting the duties as fixed in the decision of 23 May 1995 dismissing its appeal against the notices of assessment. In June 1997 it brought an action before the same court contesting the decision of 12 May 1997 dismissing its appeal against the refusal of its application for repayment. In December 1997 the Finanzgericht ordered that the two sets of proceedings be joined, stayed the proceedings and referred the following questions to the Court for a preliminary ruling:

`1. Does Article 859 of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code (OJ 1993 L 253, p. 1) ("the implementing regulation") contain a validly constituted and exhaustive set of rules on failures, within the meaning of Article 204(1)(a) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1) ("the Customs Code"), which "have no significant effect on the correct operation of the temporary storage or customs procedure in question"?

2. If Question 1 is to be answered in the affirmative:

(a) Where an application is made in time for an extension of the time-limit referred to in Article 859(1) of the implementing regulation, is the national court precluded from examining of its own motion the criteria for the grant of such an extension where it has been refused by a now unappealable decision of the customs authority?

(b) Is it permissible for an application for an extension to relate not to declarations to be listed individually but instead globally to all declarations to be made within a given period (in this case, several months), where reference is made, by way of justification, to special problems existing during that period in the applicant's business (for example, the fact that employees have suddenly fallen ill or have been absent on leave, the induction of new employees, problems with the application of a data processing system developed for the purposes of carrying out customs formalities or, in cases involving outward processing, the excessive work involved in the preparation of attributions which should in fact have been prepared by the customs authorities), without obvious negligence arising under the second indent of Article 859 of the implementing regulation?

3. If Question 1 is to be answered in the negative:

Must it be assumed that the numerous instances of failure to comply in time with the obligation to assign to goods presented to customs a customs-approved treatment or use are to be considered to "have no significant effect on the correct operation of the temporary storage or customs procedure in question" where such treatment or use is assigned to the goods after the time-limit has expired and an extension of the time allowed for such assignment would not have been justified under Article 49(2) of the Customs Code?

4. If Question 2(b) or Question 3 is to be answered in the negative:

Is Article 900(1)(o) of the implementing regulation, as inserted by Article 1(29) of Commission Regulation (EC) No 3254/94 of 19 December 1994 (OJ 1994 L 346, p. 1), concerning eligibility for preferential rates or Community treatment, also applicable to the grant of other forms of preferential tariff treatment?

5. If Question 4 is to be answered in the negative:

Where a claim is made for repayment, are the customs authorities and courts required to examine of their own motion whether all relevant criteria for repayment are fulfilled, even in the event that the claimant expressly bases his claim for repayment on one legal criterion only, thus rendering it necessary, in circumstances such as those of the present case, to examine whether the conditions laid down in the second indent of Article 239(1) of the Customs Code in conjunction with the first sentence of Article 905(1) of the implementing regulation are fulfilled with regard to declarations for entry into free circulation in which valid movement certificates on Form EUR.1 or certificates of origin on Form A have been produced, and where there exists the possibility of total or partial exemption from import duties of goods which have been re-imported following outward processing (differential customs clearance) or goods returned following repair?

6. Where the repayment criteria laid down in Article 900(1)(o) of the implementing regulation are fulfilled, can it ordinarily be assumed that the person concerned has not acted with any fraudulent intent or in a manner which is obviously negligent?

7. If Question 6 and/or Question 4 are to be answered in the negative:

Should the term "obvious negligence" in the second indent of Article 239(1) of the Customs Code be defined according to objective and/or subjective criteria, and does it have the same meaning as the term "obvious negligence" in the second indent of Article 859 of the implementing regulation and the term "manifest negligence" in Article 212a? Can no "obvious negligence" be said to exist within the meaning of Article 239 of the Customs Code where customs debts on importation have been incurred under Article 204(1)(a) because, for reasons such as those given by way of example in Question 2(b), there has been non-compliance over a period of many months with the time-limit laid down in Article 49(1) of the Customs Code and no circumstances justifying extensions of time existed, with the result that there was also obvious negligence under the second indent of Article 859 of the implementing regulation?'

15 Written observations have been submitted by the parties to the main proceedings, the German and the United Kingdom Governments and the Commission. The parties, the German Government and the Commission were represented at the hearing.

The relevant Community legislation

16 Article 49 of the Community Customs Code provides:

`1. Where goods are covered by a summary declaration, the formalities necessary for them to be assigned a customs-approved treatment or use must be carried out within:

...

(b) 20 days from the date on which the summary declaration is lodged in the case of goods carried otherwise than by sea.

2. Where circumstances so warrant, the customs authorities may set a shorter period or authorise an extension of the periods referred to in paragraph 1. Such extension shall not, however, exceed the genuine requirements which are justified by the circumstances.'

17 Article 204(1) provides:

`A customs debt on importation shall be incurred through:

(a) non-fulfilment of one of the obligations arising, in respect of goods liable to import duties, from their temporary storage or from the use of the customs procedure under which they are placed, or

(b) ... ,

in cases other than those referred to in Article 203 unless it is established that those failures have no significant effect on the correct operation of the temporary storage or customs procedure in question.'

Article 203 refers to the unlawful removal from customs supervision of goods liable to import duties.

18 Article 212a (19) provides:

`Where customs legislation provides for partial or total exemption from import or export duties pursuant to Articles 181 to 187, such partial or total exemption shall also apply in cases where a customs debt is incurred pursuant to Articles 202 to 205, 210 or 211 where the behaviour of the declarant implies neither fraudulent dealing nor manifest negligence and he produces evidence that the other conditions for the application of relief or exemption have been satisfied.' (20)

19 Article 239 provides:

`1. Import duties or export duties may be repaid or remitted in situations other than those referred to in Articles 236, 237, and 238:

- to be determined in accordance with the procedure of the committee;

- resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned. The situations in which this provision may be applied and the procedures to be followed to that end shall be defined in accordance with the Committee procedure. Repayment or remission may be made subject to special conditions.

2. Duties shall be repaid or remitted for the reasons set out in paragraph 1 upon submission of an application to the appropriate customs office within 12 months from the date on which the amount of the duties was communicated to the debtor.

However, the customs authorities may permit this period to be exceeded in duly justified exceptional cases.'

Articles 236, 237 and 238 concern respectively situations where duties are not legally owed, where a customs declaration is invalidated and where the goods in question were rejected by the importer as defective or otherwise not in accordance with the contract.

20 Article 249 provides:

`1. The provisions required for the implementation of this Code, including implementation of the Regulation referred to in Article 184, except for Title VIII and subject to Articles 9 and 10 of Council Regulation (EEC) No 2658/87 (21) and to paragraph 4, shall be adopted in accordance with the procedure laid down in paragraphs 2 and 3, in compliance with the international commitments entered into by the Community.

2. The representative of the Commission shall submit to the committee a draft of the measures to be taken. The committee shall deliver its opinion on the draft within a time-limit which the chairman may lay down according to the urgency of the matter. The opinion shall be delivered by the majority laid down in Article 148(2) of the Treaty in the case of decisions which the Council is required to adopt on a proposal from the Commission. The votes of the representatives of the Member States within the committee shall be weighted in the manner set out in that Article. The chairman shall not vote.

3.(a) The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the committee.

(b) If the measures envisaged are not in accordance with the opinion of the committee, or if no opinion is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the provisions to be adopted. The Council shall act by a qualified majority.

(c) If, on the expiry of a period of three months from the date of referral to the Council, the Council has not acted, the proposed measures shall be adopted by the Commission.

4. The provisions necessary for implementing Articles 11, 12 and 21 shall be adopted by the procedure referred to in Article 10 of Regulation (EEC) No 2658/87.'

21 Article 859 of the implementing regulation (22) provides:

`The following failures shall be considered to have no significant effect on the correct operation of the temporary storage or customs procedure in question within the meaning of Article 204(1) of the Code, provided:

- they do not constitute an attempt to remove the goods unlawfully from customs supervision,

- they do not imply obvious negligence on the part of the person concerned, and

- all the formalities necessary to regularise the situation of the goods are subsequently carried out:

1. exceeding the time-limit allowed for assignment of the goods to one of the customs-approved treatments or uses provided for under the temporary storage or customs procedure in question, where the time-limit would have been extended had an extension been applied for in time;

2. in the case of goods placed under a transit procedure, exceeding the time-limit for presentation of the goods to the office of destination, where such presentation takes place later;

3. in the case of goods placed in temporary storage or under the customs warehousing procedure, handling not authorised in advance by the customs authorities, provided such handling would have been authorised if applied for;

4. in the case of goods placed under the temporary importation procedure, use of the goods otherwise than as provided for in the authorisation, provided such use would have been authorised under that procedure if applied for;

5. in the case of goods in temporary storage or placed under a customs procedure, unauthorised movement of the goods, provided the goods can be presented to the customs authorities at their request;

6. in the case of goods in temporary storage or placed under a customs procedure, removal of the goods from the customs territory of the Community or their entry into a free zone or free warehouse without completion of the necessary formalities;

7. in the case of goods having received favourable tariff treatment by reason of their end-use, transfer of the goods without notification to the customs authorities, before they have been put to the intended use, provided that:

(a) the transfer is recorded in the transferor's stock records; and

(b) the transferee is the holder of an authorisation for the goods in question;

8. in the case of goods eligible on release for free circulation for the total or partial relief from import duties referred to in Article 145 of the Code, the existence of one of the situations referred to in Article 204(1)(a) or (b) of the Code while the goods concerned are in temporary storage or under another customs procedure before being released for free circulation;

9. in the case of inward processing operations carried out on an ongoing basis, the failure to request renewal of the requisite authorisation even though the conditions for its issue have been met.'

22 Article 860 of the implementing regulation provides:

`The customs authorities shall consider a customs debt to have been incurred under Article 204(1) of the Code unless the person who would be the debtor establishes that the conditions set out in Article 859 are fulfilled.'

23 Article 899 of the implementing regulation provides that `where the decision-making customs authority establishes that an application for repayment or remission submitted to it under Article 239(2) of the Code:

- is based on grounds corresponding to one of the circumstances referred to in Articles 900 to 903, and that these do not result from deception or obvious negligence on the part of the person concerned, it shall repay or remit the amount of import duties concerned.

"The person concerned" shall mean the person or persons referred to in Article 878(1), or their representatives, and any other person who was involved with the completion of the customs formalities relating to the goods concerned or gave the instructions necessary for the completion of these formalities,

- is based on grounds corresponding to one of the circumstances referred to in Article 904, it shall not repay or remit the amount of import duties concerned.'

24 Article 900 of the implementing regulation (23) provides, in so far as is relevant:

`1. Import duties shall be repaid or remitted where:

...

(o) the customs debt has been incurred otherwise than under Article 201 of the Code and the person concerned is able to produce a certificate of origin, a movement certificate, an internal Community transit document or other appropriate document showing that if the imported goods had been entered for free circulation they would have been eligible for Community treatment or preferential tariff treatment, provided the other conditions referred to in Article 890 were satisfied.'

25 Article 905(1) of the implementing regulation provides:

`1. Where the decision-making customs authority to which an application for repayment or remission under Article 239(2) of the Code has been submitted cannot take a decision on the basis of Article 899, but the application is supported by evidence which might constitute a special situation resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned, the Member State to which this authority belongs shall transmit the case to the Commission to be settled under the procedure laid down in Articles 906 to 909.

The term "the person concerned" shall be interpreted in the same way as in Article 899.

In all other cases, the decision-making customs authority shall refuse the application.'

The first question

26 By its first question, the national court asks whether Article 859 of the implementing regulation contains a validly constituted and exhaustive set of rules on failures, within the meaning of Article 204(1)(a) of the Customs Code, which `have no significant effect on the correct operation of the temporary storage or customs procedure in question'.

27 It appears from the order for reference that the national court was prompted to refer this question because of reservations expressed in German legal literature as to the validity of the exhaustive nature conferred on Article 859 by Article 860. Those reservations are based on the view that the Customs Code confers no power to enact exhaustive rules governing the circumstances in which failures are to be considered to have no significant effect on the correct operation of the temporary storage or customs procedure in question. The national court, the applicant and the German Government share those reservations, and put forward a number of arguments in support of their view.

28 Those arguments stem essentially from the perception that Article 859 redefines the contours of the derogation in Article 204: while Article 204 simply provides that a customs debt is not incurred in the circumstances spelt out in paragraph (1)(a) (24) where the failures have no significant effect on the correct operation of the temporary storage or customs procedure in question, Article 859 lays down three cumulative conditions for application of the derogation (that the failures neither constitute an attempt to remove the goods unlawfully from customs supervision nor imply obvious negligence on the part of the person concerned and that all the formalities necessary to regularise the situation of the goods are subsequently carried out) and then exhaustively (see Article 860) lists nine specific failures to be considered to have no significant effect within the meaning of Article 204(1). It is argued that Article 859 accordingly goes beyond what was necessary and lawful to implement Article 204(1) since it restricts to specified circumstances the scope of a derogation originally framed in general terms.

29 The applicant moreover submits that Article 249 of the Code simply regulates the procedure to be followed for the adoption of implementing provisions without conferring any competence to that effect. The German Government adds that, if the Council had intended Article 249 to be the basis of competence to adopt implementing provisions, numerous specific provisions throughout the Code which confer power on the Commission to adopt implementing provisions (for example Articles 19, 30(3), 34, 35(3), 36(2), 76(1) and 94(2) and (3)) would be superfluous.

30 The national court and the applicant conclude that only the Council could have adopted a provision such as Article 859 and that it should have been laid down in the Customs Code. The German Government submits that the Council, had it wished to empower the Commission to legislate in the manner of Article 859, would have inserted an explicit provision conferring on it the power exhaustively to determine derogations from Article 204(1).

31 Those arguments, albeit having some attraction, must in my view be weighed against a number of other considerations.

32 First, the language of Article 249 is very broad: it is expressed to confer on the Commission the power to adopt the `provisions required for the implementation of' the Code (with the exception of Title VIII, which concerns appeals) in accordance with a prescribed procedure closely involving the Customs Code Committee, set up by Article 247. That the intention was to confer broad implementing powers is moreover confirmed by the preamble to the Code, which states:

`Whereas it is important to guarantee the uniform application of this Code and to provide, to that end, for a Community procedure which enables the procedures for its implementation to be adopted within a suitable time; whereas a Customs Code Committee should be set up in order to ensure close and effective cooperation between the Member States and the Commission in this field'. (25)

33 That recital underlines the objective of ensuring a high level of uniformity in the application of the Code, which may be regarded as particularly important in the field of customs law, one of the cornerstones of the Community, which requires administration by the national customs authorities and a high degree of procedural detail in its application. It is clearly imperative that legislation governing the customs status of goods entering the Community at any frontier should be applied in a uniform manner throughout the Member States.

34 The Court has moreover taken a broad view of the Commission's implementing powers in analogous cases. In Zuckerfabrik Franken, (26) for example, which concerned the Commission's power to adopt implementing legislation containing a definition of a critical process not found in the basic legislation, the Court stated that legislation providing for adoption by the Council of the general rules for implementation and adoption by the Commission in accordance with a committee procedure of the detailed rules for implementation:

`must be understood as meaning that, in the exercise of its powers, the Commission is authorised to adopt all the measures which are necessary or appropriate for the implementation of the basic legislation, provided that they are not contrary to such legislation or to the implementing legislation adopted by the Council'. (27)

That proposition has been confirmed by the Court in Netherlands v Commission (28) and Belgium and Germany v Commission. (29) Although all three cases concerned regulations adopted in the context of the common agricultural policy, in my view the principle expressed applies equally in the field of customs legislation.

35 As the Commission notes, the Council, in Article 204 of the Code, did not retain competence exhaustively to fix the categories of failures, but left the Commission to determine whether and if so to what extent it was reasonable and necessary to adopt other provisions. It cannot be inferred from the mere fact that the `unless rule' in Article 204 is drafted in broad terms that the Commission was not competent to adopt more specific rules. On the contrary, given the need for legal certainty and uniform interpretation the converse in my view holds, and the general wording of the provision should be regarded as leaving it open to the Commission to do so. (30) I accordingly share the Commission's view that it was not merely reasonable but even necessary to provide a uniform Community framework for the national customs authorities by setting up an exhaustive regime.

36 That view is furthermore supported by the preamble to the Customs Code. As well as the seventh recital, cited above, the preamble states that `in adopting the measures required to implement this Code, the utmost care must be taken to prevent any fraud or irregularity liable to affect adversely the General Budget of the European Communities'. (31) I agree with the Commission that that objective necessitates the adoption of an exhaustive Community regulation of exceptions, enabling customs authorities to give clear instructions at customs posts throughout the Community.

37 As for the argument that the several specific implementing powers scattered throughout the Code would be superfluous were Article 249 to be construed as a general implementing power, the logical conclusion of such a view would be that none of the Code's 253 articles other than the handful of specific provisions mentioned by the German Government could lawfully be implemented and that hence the vast majority of the 915 articles of the implementing regulation were unlawful. Such a view is clearly untenable. There is no support in the Code for the view that it is only where express provision is made for implementation that it was intended that delegated legislation could be adopted by the committee procedure prescribed in Article 249. Rather, those provisions are instances where it was considered that such legislation was particularly appropriate or, in some cases, necessary. It does not of course follow from that that implementing legislation was precluded in all other cases.

38 Moreover there is nothing in Article 249 to suggest that its scope is limited in the way proposed by the applicant: it is not limited to setting out the procedure to be followed in those cases where there are specific empowering provisions elsewhere in the Code, but refers generally to `The provisions required for the implementation of this Code' and lays down the procedure to be followed for all such provisions.

39 I would note finally on the first question a point made by the Commission both in its written observations and at the hearing, namely the significance of the requirement that implementing legislation be adopted by the Commission in accordance with the procedure prescribed by Article 249(2) and (3). That procedure requires the close involvement of the Customs Code Committee, set up by Article 247, which is composed of representatives of the Member States with a representative of the Commission as chairman. Article 249 requires the Commission to submit to the Committee a draft of the measures to be taken. The Committee is to deliver its opinion on the draft by qualified majority in accordance with Article 148(2) of the EC Treaty; the chairman has no vote. The Commission may then adopt the measures only if they are in accordance with the opinion of the Committee; otherwise the Commission is required to submit a proposal to the Council, which is to act by qualified majority. As the Commission notes, the effect is that the Member States had a number of options at the time of negotiating the implementing regulation: they could have blocked the proposed regulation and, acting within the Council by the same (qualified) majority, could have either replaced it with a different regulation or amended the Code so as to include the exhaustive list of exceptions now enacted as Articles 859 and 860. Although the requirement that implementing legislation be adopted by the Commission in accordance with the procedure prescribed by Article 249(2) and (3) is not, of course, directly relevant to the issue of competence as between the Council and the Commission, the procedure goes a long way to ensuring that Member States' interests are protected.

40 In answer to the national court's first question I accordingly conclude that Article 859 of the implementing regulation contains a validly constituted and exhaustive set of rules on failures, within the meaning of Article 204(1) of the Customs Code, which `have no significant effect on the correct operation of the temporary storage or customs procedure in question'.

The second question

41 The national court's second question arises if the first question has been answered - as I propose - in the affirmative, namely on the assumption that Article 859 is valid. The second question is in two parts.

Question 2(a)

42 The first part asks whether, where an application has been made in time for an extension of the time-limit referred to in Article 859(1) and refused by a decision of the customs authority no longer open to appeal, the national court may examine of its own motion the criteria for the grant of such an extension.

43 It will be recalled that Article 859(1) provides that, subject to three conditions, (32) In addition, the national court asks whether applications must be made in respect of each declaration individually or whether a single application may be made seeking extension in relation to numerous summary declarations.

48 As noted by the national court and the Commission, the precursor of Article 49(2) is Article 7 of Council Directive 68/312/EEC of 30 July 1968 on harmonisation of the provisions laid down by law, regulation or administrative action relating to (1) customs treatment of goods entering the customs territory of the Community (2) temporary storage of such goods. (35) That provision conferred power to extend the equivalent time-limit `where exceptional circumstances so warrant'. The `exceptional' was dropped when Directive 68/312 was replaced by Council Regulation (EEC) No 4151/88 of 21 December 1988 laying down the provisions applicable to goods brought into the customs territory of the Community. (36) That suggests that justification for extension of time is no longer limited to exceptional circumstances alone.

49 However, as also noted by both the national court and the Commission, the sense and the objective of the legislation and its place in the system of customs duties suggest that something more than ordinary circumstances is required to justify extensions of time. The legislative purpose of the temporary storage system is to create, in respect of non-Community goods which are presented to customs and summarily declared, a limited transitional period lasting until the assignment to those goods, within tight time-limits, of a customs-approved treatment or use. The provisions governing extensions of time are not intended to enable temporary storage to be routinely prolonged and thus in effect converted to customs warehousing, which is itself a specific and distinct customs procedure requiring approval and supervision by the customs authorities.

50 I accordingly conclude that an extension of the period referred to in Article 49(1) may be granted only where there are specific and extraordinary circumstances which in themselves justify the extension and its duration. I mean `extraordinary' in this context in its literal sense of outside the ordinary. Although events specific to an undertaking might, if extraordinary in that sense, justify an extension, there are no such circumstances in the present case: events such as those recited in the question referred are part of the daily routine of the undertaking concerned and must be dealt with on an ad hoc basis.

51 The national court also asks whether an application for extension of time may relate to a batch of declarations or whether a separate application must be made in respect of each declaration. Provided that the circumstances adduced as justification for extension are applicable to all the declarations concerned, so that an application for extension of time in respect of each declaration can reasonably be made, I consider that a single application may be made in relation to a number of declarations. That may be the case if, for example, several declarations have been made - or are to be made - in a short period and the reasons put forward in support of the application cover that period. I would stress, however, that the specific and extraordinary circumstances on the basis of which an extension of time is sought must be set out in each request for an extension. As noted by the defendant, without a reasoned application for extension of time the customs authority will not be in a position to determine the `genuine requirements ... justified by the circumstances'. Moreover the wording of Article 859(1) strongly suggests that an application for extension is envisaged, as does point 15 of Annex A.2 to the international convention on the simplification and harmonisation of customs procedures (37) to which the Community is a party and to which it is required to conform. It is for the national court to assess which circumstances may justify an extension in a particular case and how those circumstances may be proved.

52 The additional question whether obvious negligence arises in the circumstances of the question is thus no longer relevant, since in my view there were in the present case no extraordinary circumstances such as to justify extension of time. The issue of negligence is however explored further in the context of the national court's final question. (38) the preamble to which states:

`Whereas Article 890 of Regulation (EEC) No 2454/93 provides that duties may be repaid or remitted on imports eligible for Community treatment or preferential tariff treatment, where a customs debt has been incurred as a result of release for free circulation;

Whereas there are also cases in which the importer is able to produce a document showing entitlement to such preferential treatment but the customs debt has been incurred for reasons other than release for free circulation; whereas the obligation to pay duty in such cases, where no deception or obvious negligence is involved, is disproportionate to the need for protection which the common customs tariff is intended to provide'. (41)

62 It is clear from the wording of the legislation that Article 900(1)(o) applies only where it can be established that, if the goods had been released for free circulation, they would have been eligible for Community treatment or preferential tariff treatment. The fact that the goods might have benefited on release for free circulation from other reductions in or exemptions from duty, such as those referred to by the applicant, does not bring the situation within the scope of Article 900(1)(o). The applicant's argument accordingly fails.

63 I accordingly conclude that Article 900(1)(o) of the implementing regulation is not applicable where the goods would have been eligible for forms of preferential tariff treatment other than those expressly mentioned in that provision.

The fifth question

64 The national court's fifth question is asked in the event that its fourth question has received, as I propose, a negative answer, namely that Article 900(1)(o), the sole basis of the applicant's claim to repayment, is not applicable to the applicant's situation. The national court essentially asks whether in such circumstances the customs authorities and courts are required to examine of their own motion whether other grounds for repayment are satisfied.

65 As the Commission observes, it seems clear from the decision of the Court in SEIM v Subdirector-General das Alfândegas, (42) which concerned the predecessor of Article 239(1) (Article 13 of Council Regulation (EEC) No 1430/79 (43)), that, while the Community legislation does not prevent the customs authorities - and by extension the national courts - from checking in all cases that the circumstances relied on in an application for repayment or remission do not fall within any other provision, neither does it require such checking. (44) The existence and extent of any obligation to examine whether grounds for repayment other than that expressly relied on are governed by national law.

66 I accordingly conclude that, where a claim is made for repayment, the customs authorities and courts are not required to examine of their own motion whether all relevant criteria for repayment are fulfilled.

The sixth question

67 By its sixth question the national court asks whether, where the repayment criteria laid down in Article 900(1)(o) of the implementing regulation are fulfilled, it can ordinarily be assumed that the person concerned has not acted with any fraudulent intent or in a manner which is obviously negligent.

68 Article 899 of the implementing regulation provides that where the relevant customs authority establishes `that an application for repayment ... under Article 239(2) of the Code ... is based on grounds corresponding to one of the circumstances referred to in Articles 900 to 903, and that these do not result from deception or obvious negligence on the part of the person concerned, it shall repay' the duties concerned. The applicant argues that the condition requiring there to have been no deception or obvious negligence on the part of the person concerned is generally fulfilled in cases covered by Article 900, including those, such as (in its view) the present case, falling within Article 900(1)(o).

69 As the Commission and the defendant both point out, however, such an interpretation is manifestly at odds with the wording of the legislation. It is clear from the terms of Article 899, and confirmed by the preamble to Regulation No 3254/94 (45) which added Article 900(1)(o) to the implementing regulation, (46) and defined in Article 2 of Regulation No 3799/86. (49) Although `grobe Fahrlässigkeit' was used in the German version of Article 859 of the implementing regulation, all the other then official language versions of Regulation No 3799/86 (Danish, Dutch, Greek, Italian, Portuguese and Spanish) used a term which is different from - and apparently stronger than - the term or terms used in the current legislation.

75 Article 2(b) of Regulation No 3799/86 provided as follows:

`"serious negligence" may be attributed to the person concerned where he has failed to comply with the procedural requirements which in principle are a condition for the granting of repayment or remission although he must have been aware of their existence.

"Serious negligence" may be attributed to the person concerned in particular where:

- a person not in business as a customs declarant has failed to comply with the procedural requirements which in principle are a condition for the granting of repayment or remission although he has already been in a similar situation and he was consequently aware of the legal requirements for obtaining such repayment or remission;

- a person practising as a customs declarant, representing the person in whose name an application for repayment or remission is made, has failed to take the steps laid down by legislation in relation to the customs authorities, as instructed by that person, in order to secure such repayment or remission.'

76 Thus the previous test for serious negligence required that the person concerned `must have been aware of [the] existence' of the procedural requirements which in principle were a condition for the granting of repayment or remission; the equivalent French and German verbs were `ne pouvait ignorer' and `Kenntnis haben mußte'. In the absence of a specific definition of the current test of `obvious negligence' in the context of the Customs Code I consider that that test will be satisfied if the person concerned should have been aware of those requirements, in the sense that a reasonable person in his business and circumstances would have been aware of them. It is in general for the national court to determine whether given conduct falls within the scope of the concept, although I would add that I share the Commission's view that conduct such as that described in the order for reference in the present case manifestly amounts to obvious negligence.

Conclusion

77 I accordingly consider that the questions referred by the Finanzgericht, Bremen, should be answered as follows:

(1) Article 859 of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 (`the implementing regulation') contains a validly constituted and exhaustive set of rules on failures, within the meaning of Article 204(1) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (`the Customs Code'), which `have no significant effect on the correct operation of the temporary storage or customs procedure in question'.

(2) Where an application has been made in time for an extension of the time-limit referred to in Article 859(1) of the implementing regulation and refused by a decision of the customs authority no longer open to appeal, the national court may not examine of its own motion the criteria for the grant of such an extension.

(3) (i) An extension of the period referred to in Article 49(1) of the Customs Code may be granted only where there are specific and extraordinary circumstances which in themselves justify the extension and its duration.

(ii) An application for an extension of time may relate to several declarations within a given period provided that the specific and extraordinary circumstances relied on relate to all the declarations concerned.

(4) Article 900(1)(o) of the implementing regulation is not applicable where the goods would have been eligible for forms of preferential tariff treatment other than those expressly mentioned in that provision.

(5) Where a claim is made for repayment or remission of customs duties under Article 239(1) of the Customs Code, the customs authorities and courts are not required to examine of their own motion whether all relevant criteria for repayment are fulfilled.

(6) Where the repayment criteria laid down in Article 900(1)(o) of the implementing regulation are fulfilled, it cannot be assumed that the person concerned has not acted with any fraudulent intent or in a manner which is obviously negligent.

(7) There will be `obvious negligence' within the meaning of the second indent of Article 239(1) of the Customs Code if the person concerned should have been aware of the existence of the procedural requirements which in principle were a condition for the granting of repayment or remission, in the sense that a reasonable person in his business and circumstances would have been aware of them.

(1) - Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, OJ 1992 L 302, p. 1.

(2) - Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92, OJ 1993 L 253, p. 1.

(3) - Article 38(1) of the Customs Code.

(4) - Article 40 of the Customs Code.

(5) - Article 43 of the Customs Code.

(6) - Article 48 of the Customs Code.

(7) - Article 50 of the Customs Code.

(8) - Article 49(1) of the Customs Code.

(9) - Article 49(2) of the Customs Code.

(10) - Article 4(15) of the Customs Code.

(11) - Article 4(16) of the Customs Code.

(12) - Article 204(1) of the Customs Code.

(13) - Article 860 of the implementing regulation.

(14) - Article 859 of the implementing regulation.

(15) - Article 212a of the Customs Code, inserted by Regulation (EC) No 82/97 of the European Parliament and of the Council of 19 December 1996 amending Regulation (EEC) No 2913/92, OJ 1997 L 17, p. 1.

(16) - Article 239(1) of the Customs Code.

(17) - Article 900(1)(o) of the implementing regulation as amended by Commission Regulation (EC) No 3254/94 of 19 December 1994 amending Regulation (EEC) No 2454/93, OJ 1994 L 346, p. 1.

(18) - Article 145 of the Code.

(19) - Inserted by Regulation (EC) No 82/97, cited in note 15.

(20) - It is clear from the text of the common position adopted by the Council on 28 May 1996 (OJ 1996 C 248, p. 1) and from the French and German versions of Regulation No 82/97 that the reference to Articles 181 to 187 should be to Articles 184 to 187.

(21) - OJ 1987 L 256, p. 1.

(22) - As amended by Commission Regulation (EC) No 1427/97 of 23 July 1997 amending Regulation (EEC) No 2454/93, OJ 1997 L 196, p. 31, which added points 8 and 9.

(23) - As inserted by Regulation No 3254/94, cited in note 17.

(24) - Non-fulfilment of one of the obligations arising from temporary storage or from the use of the relevant customs procedure.

(25) - Seventh recital.

(26) - Case 121/83 Zuckerfabrik Franken v Hauptzollamt Würzburg [1984] ECR 2039.

(27) - Paragraph 13 of the judgment.

(28) - Case C-478/93 [1995] ECR I-3081, paragraph 30 of the judgment.

(29) - Joined Cases C-9/95, C-23/95 and C-156/95 [1997] ECR I-645, paragraph 37 of the judgment.

(30) - See for example Case C-240/90 Germany v Commission [1992] ECR I-5383, in particular paragraphs 42 and 43 of my Opinion and paragraphs 36 and 37 of the judgment.

(31) - Eighth recital.

(32) - See paragraph (33)$$(33)44 It is clear in my view from the wording of Article 859(1) that the provision is intended to apply where no application for an extension of time was ever made under Article 49 of the Code but where the national court is satisfied that, had such an application been made, the time-limit would have been extended. As the United Kingdom points out, that interpretation is moreover required by the principles of legal certainty and due process, since traders could otherwise, when challenging the imposition of a customs debt, appeal against a refusal to extend the time-limit under Article 49 of the Code even though the refusal itself was no longer open to appeal. That would render uncertain all decisions made by customs authorities refusing to extend time under Article 49.

45 I accordingly conclude that, where an application has been made in time for an extension of the time-limit referred to in Article 859(1) and refused by a decision of the customs authority no longer open to appeal, the national court may not examine of its own motion the criteria for the grant of such an extension.

Question 2(b)

46 The second part of the national court's second question, which also arises only in the event that question 1 is answered in the affirmative (so that Article 859 is regarded as valid), asks whether it is permissible for an application for an extension of time to relate not to declarations to be listed individually but instead globally to all declarations to be made within a given period (in this case, several months), where reference is made, by way of justification, to special problems existing during that period in the applicant's business (for example, illness or absence of employees, induction of new employees, problems with the application of a newly developed data processing system), without obvious negligence arising under the second indent of Article 859 of the implementing regulation.

47 The question thus concerns the interpretation of Article 49 of the Customs Code, and in particular the type of circumstances which may justify an extension of time for completing the formalities for assignment to a customs-approved treatment or use of goods covered by a summary declaration. Article 49(2), it will be recalled, permits the customs authorities to extend the period of 20 days from lodging the summary declaration where circumstances so warrant, provided that the extension does not `exceed the genuine requirements which are justified by

(34) - Described by Professor Ben Terra in Community Customs Law (1995) as `one of the loveliest expressions of the Code', Vol. I, p. 333.

(35) - OJ, English Special Edition 1968 (II), p. 416.

(36) - OJ 1988 L 367, p. 1. See Article 15(2).

(37) - The convention is annexed to Council Decision 75/199/EEC of 18 March 1975 concluding an international convention on the simplification and harmonisation of customs procedures and accepting the Annex thereto concerning customs warehouses, OJ 1975 L 100, p. 1. Annex A.2 is in the Annex to Council Decision 78/528/EEC of 6 June 1978 accepting on behalf of the Community three Annexes to the International Convention on the simplification and harmonisation of customs procedures, OJ 1978 L 160, p. 13.

(38) - See paragraphs (39)$$(39)53 In answer to the second part of the national court's second question I accordingly conclude that (i) an extension of the period referred to in Article 49(1) may be granted only where there are specific and extraordinary circumstances which in themselves justify the extension and its duration and (ii) an application for an extension of time may relate to several declarations within a given period provided that the specific and extraordinary circumstances relied on relate to all the declarations concerned.

The third question

54 The national court's third question, which arises only in the event that - contrary to my view - the first question is answered in the negative (so that Article 859 is regarded as invalid), asks whether it must be assumed that the frequent failures to assign the goods a customs-approved treatment or use within 20 days are to be considered to `have no significant effect on the correct operation of the temporary storage or customs procedure in question' where such treatment or use is assigned to the goods after the 20 days and an extension of the time would not have been justified under Article 49(2). It appears from the order for reference that the national court is of the view that, even where isolated failures of the type at issue would not have been considered to have a significant effect within the meaning of Article 204(1), the exception in that provision cannot apply where the time-limits have been exceeded in numerous instances over the course of a year.

55 Since this question does not arise if, as I propose, the first question is answered in the affirmative, I shall deal with it briefly.

56 It seems obvious that frequent failures to assign goods in temporary storage a customs-approved treatment or use will have a significant effect on the correct operation of the temporary storage or customs procedure in question. As indicated above, the effect is that the temporary storage procedure is being used in a similar way to a customs warehouse, without the authorisation or supervision which the legislation requires of such a use. Article 204(1) provides that in such circumstances a customs debt is incurred. The `unless rule' is intended to enable a debt so incurred to be waived in the event of a formal infringement which it is possible to remedy. A case such as the present, however, where an extension of time would not have been granted, does not involve a formal infringement which it is possible to remedy.

The fourth question

57 The fourth question arises if question 2(b) or question 3 is answered in the negative. I have proposed that question 3 and part of question 2(b) should be so answered. The national court asks whether Article 900(1)(o) of the implementing regulation, concerning repayment of duties where the goods would have been eligible for preferential rates or Community treatment, is also applicable where the goods would have been eligible for other forms of preferential tariff treatment.

58 This question concerns the applicant's alternative claim under Article 239 of the Code for repayment of the duties levied. Article 239, it will be recalled, provides that customs duties may be repaid or remitted in situations `resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned'. The situations in which Article 239 is to be applied are to be defined in accordance with the Committee procedure, and hence by way of the implementing regulation. Article 900 of that regulation lists a number of situations in which import duties are to be repaid or remitted, including, at (1)(o), where the customs debt has been incurred otherwise than under Article 201 of the Code and the person concerned is able to produce a certificate of origin, a movement certificate, an internal Community transit document or other appropriate document showing that if the imported goods had been entered for free circulation they would have been eligible for Community treatment or preferential tariff treatment, provided the other conditions referred to in Article 890 were satisfied.

59 Article 201 of the Code provides that a customs debt on importation is incurred through release for free circulation or the placing of goods under the temporary importation procedure with partial relief from import duties. The temporary importation procedure is to be distinguished from temporary storage: it is a customs procedure. The conditions referred to in Article 890 of the implementing regulation are that the document produced refers specifically to the goods in question, that all the conditions relating to acceptance of the document are fulfilled, and that all the other conditions for granting preferential tariff treatment are fulfilled.

60 It appears from the order for reference that the national court was prompted to refer this question because the applicant had argued that Article 900(1)(o) would also apply in respect of goods eligible for other forms of preferential tariff treatment, namely total or partial relief from import duties in respect of, first, the goods which were re-imported following outward processing and secondly, goods returned following repairs.

61 Article 900(1)(o) was added to the implementing regulation by Regulation No 3254/94,

(40) - Cited in note 17.

(41) - Fourteenth and fifteenth recitals.

(42) - Case C-446/93 [1996] ECR I-73.

(43) - Council Regulation (EEC) No 1430/79 of 2 July 1979 on the repayment or remission or import or export duties, OJ 1979 L 175, p. 1, as amended by Council Regulation (EEC) No 3069/86 of 7 October 1986, OJ 1986 L 286, p. 1.

(44) - See paragraphs 52 to 54 of the judgment.

(45) - Cited in note 17.

(46) - See the fifteenth recital, set out in paragraph

(47)70 I accordingly conclude that, where the repayment criteria laid down in Article 900(1)(o) of the implementing regulation are fulfilled, it cannot be assumed that the person concerned has not acted with any fraudulent intent or in a manner which is obviously negligent.

The seventh question

71 The national court's seventh question arises only in the event that either or both of the fourth and sixth questions are, as I propose in each case, answered in the negative. The national court seeks guidance as to the meaning of `obvious negligence' in Article 239(1) of the Code, and asks in particular whether no `obvious negligence' can be said to exist where customs debts on importation have been incurred under Article 204(1)(a) because, for reasons such as those given by way of example in the second part of the second question, there has been non-compliance over a period of many months with the time-limit laid down in Article 49(1) of the Customs Code and no circumstances justifying extensions of time existed, with the result that there was also obvious negligence under the second indent of Article 859 of the implementing regulation.

72 It appears from the order for reference that the national court was prompted to put this question because of minor linguistic differences in the concepts of negligence used in the provisions relating to repayment and remission of customs duties (Article 239 of the Code and Articles 899 and 905 of the implementing regulation) and in the provisions relating to the incurring of a customs debt (Article 859 of the implementing regulation). Although in the English and French versions of the Code and the implementing regulation the same terms, `obvious negligence' and `négligence manifeste', are used in all those provisions, the German version uses slightly different terms: Articles 239, 899 and 905 use the term `offensichtliche Fahrlässigkeit' (obvious/manifest negligence) while Article 859 refers to `grobe Fahrlässigkeit' (serious/grave negligence). Moreover in Article 212a, which extends the circumstances in which there may be exemption from customs duties by providing that exemption shall apply where, inter alia, there is neither `fraudulent dealing nor manifest negligence', while the French is again `négligence manifeste' the German uses yet another term, `offenkundige Fahrlässigkeit' (obvious/manifest negligence). Those differences in the English and German terminology led the national court to raise the question whether a customs debt incurred because of obvious negligence within the meaning of Article 859 may none the less be repaid or remitted.

73 The Commission in its written observations has undertaken an exhaustive review of all the language versions of the legislation. The principal conclusion to be drawn from that review is that the terms used display no coherent pattern. As seen above, the French version makes do with one term in all five provisions; so do the Danish, Italian, Portuguese and Spanish versions. The English version uses two terms; the Finnish and Greek use three (but not distributed in the same way); the Dutch and the Swedish hold the record with four (similarly not distributed in the same way). The only sensible conclusion is to my mind that no significant difference between the various terms used was intended by the legislator. To interpret the different terms in different senses would, given the lack of any rhyme or reason in the use of the terms in the different language versions, seriously undermine the uniform application of the legislation.

74 It may none the less be added, as the Commission notes, that by the term or terms used the legislator intended to mean something different from `serious negligence' or `négligence grave', the term used (and defined) in earlier legislation: it was used in Articles 4a, 6a and 11a of

(48) - Cited in note 41.

(49) - Commission Regulation (EEC) No 3799/86 of 12 December 1986 laying down provisions for the implementation of Articles 4a, 6a, 11a and 13 of Council Regulation (EEC) No 1430/79 on the repayment or remission of import or export duties, OJ 1986 L 352, p. 19. Regulation No 3799/86 was repealed by Article 913 of the implementing regulation.