Case C-213/09

Barsoum Chabo

v

Hauptzollamt Hamburg-Hafen

(Reference for a preliminary ruling from the Finanzgericht Hamburg)

(Customs union – Regulation (EC) No 1719/2005 – Common Customs Tariff – Recovery of import customs duties – Imports of processed foodstuffs – Preserved mushrooms – CN subheading 2003 10 30 – Levy of an additional amount – Principle of proportionality)

Summary of the Judgment

Common Customs Tariff – Customs duties – Community tariff quotas

(Council Regulation No 2658/87, Annex I; Commission Regulations No 1864/2004 and No 1719/2005)

The specific customs duty of EUR 222 per 100 kilograms of net drained weight, applicable under Regulation No 1719/2005 amending Annex I to Regulation No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff and charged on imports of preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature in that annex and effected outside the quota opened by Regulation No 1864/2004 opening and providing for the administration of tariff quotas for preserved mushrooms imported from third countries, as amended by Regulation No 1995/2005, is valid in the light of the principle of proportionality.

In order to assess the validity of the amount of that specific customs duty, which pursues both common commercial policy objectives and common agricultural policy objectives, it is important to examine whether that amount constitutes a manifestly disproportionate measure for achieving those objectives. In that regard, in view of the inherent complexity in deciding, at the outset, in the negotiations within the World Trade Organisation (WTO), upon the level of the specific customs duty at which the imports in question would become economically of little advantage, it cannot be claimed that the institutions of the Union concerned exceeded the limits of their broad discretion in the matter by fixing the amount of the maximum Union customs duty at EUR 222 per 100 kilograms of net drained weight. That amount cannot therefore be regarded as being manifestly disproportionate. Likewise, it cannot be inferred from the fact that the amount of the specific customs duty would have the effect of depriving imports, outside tariff quotas, of any prospect of economic profitability that that amount is manifestly disproportionate in relation to the objectives pursued because, in accordance with the most-favoured nation principle referred to in Article 1 of the 1994 General Agreement on Tariffs and Trade, it is not permitted to set the specific customs duty at a level which differs each time with regard to each member of the WTO. Therefore, the argument that the level of the specific customs duty prevents the sale, in the Union, of mushrooms from a particular third country, in view of the cost of production of those mushrooms, cannot establish that the Union legislature exceeded its broad discretion when it fixed the amount of the specific customs duty at EUR 222 per 100 kilograms of net drained weight, which is applicable to imports, outside tariff quotas, from all the Member States of the WTO.

(see paras 27, 31-35, operative part)

JUDGMENT OF THE COURT (Third Chamber)

25 November 2010 ( )

(Customs union – Regulation (EC) No 1719/2005 – Common Customs Tariff – Recovery of import customs duties – Imports of processed foodstuffs – Preserved mushrooms – CN subheading 2003 10 30 – Levy of an additional amount – Principle of proportionality)

In Case C‑213/09,

REFERENCE for a preliminary ruling under Article 234 EC from the Finanzgericht Hamburg (Germany), made by decision of 13 May 2009, received at the Court on 15 June 2009, in the proceedings

Barsoum Chabo

v

Hauptzollamt Hamburg-Hafen,

THE COURT (Third Chamber),

composed of K. Lenaerts, President of the Chamber, R. Silva de Lapuerta, E. Juhász, G. Arestis (Rapporteur) and J. Malenovský, Judges,

Advocate General: V. Trstenjak,

Registrar: K. Malacek, Administrator,

having regard to the written procedure and further to the hearing on 29 April 2010,

after considering the observations submitted on behalf of:

– Mr Chabo, by M. Ehninger, Rechtsanwalt,

– the Italian Government, by G. Palmieri, acting as Agent, assisted by G. Albenzio, avvocato dello Stato,

– the Council of the European Union, by M. Simm and F. Florindo Gijón, acting as Agents,

– the European Commission, by L. Bouyon and B.-R. Killmann, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 24 June 2010,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the validity of Commission Regulation (EC) No 1719/2005 of 27 October 2005 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 2005 L 286, p. 1) as regards the level of the additional amount on the importation, outside tariff quotas, of goods classified under subheading 2003 10 30 of the Combined Nomenclature in that annex.

2 The reference has been made in proceedings between Mr Chabo and the Hauptzollamt Hamburg-Hafen (Principal Customs Office, Hamburg-Hafen) concerning the latter’s dismissal of an objection to the payment of additional amounts which it had requested pursuant to Regulation No 1719/2005.

Legal context

3 Chapter 20 of Section IV of Part Two of Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1), as amended by Regulation No 1719/2005 (‘Regulation No 2658/87’), makes the importation, outside tariff quotas, of mushrooms of the genus Agaricus, other than those provisionally preserved, completely cooked, coming under subheading 2003 10 30 of the Combined Nomenclature subject to the levy of a conventional rate of ad valorem customs duty of 18.4% and to an additional amount, as a specific customs duty, of EUR 222 per 100 kilograms of net drained weight.

4 Annex 7 to Section III of Part Three of Annex I to Regulation No 2658/87 provides for Community tariff quotas of a quantity of 62 660 tonnes of net drained weight for mushrooms of the genus Agaricus, within the limits of which imports of mushrooms covered by subheading 2003 10 30 of the Combined Nomenclature are subject only to the levy of an ad valorem customs duty of 23%. Those quotas are divided between supplying countries in such a way that the quantity allocated to countries other than the Republic of Poland is fixed at 28 780 tonnes drained weight.

5 Commission Regulation (EC) No 1864/2004 of 26 October 2004 opening and providing for the administration of tariff quotas for preserved mushrooms imported from third countries (OJ 2004 L 325, p. 30), as amended by Commission Regulation (EC) No 1995/2005 of 7 December 2005 (OJ 2005 L 320, p. 34) (‘Regulation No 1864/2004’), establishes Community tariff quotas for preserved mushrooms of the genus Agaricus, within the limits of which imports of preserved mushrooms coming under subheading 2003 10 30 of the Combined Nomenclature are generally subject only to the levy of an ad valorem customs duty of 23%. It is apparent from Annex I to that regulation that, as from 1 January 2006, those quotas relate to a total quantity of 30 702.5 tonnes drained net weight, of which 23 750 tonnes are allocated to the People’s Republic of China.

6 The levying of those duties and the opening of those quotas constitute a transposition into European Union law of the international commitments assumed by the European Union as regards the importation of those goods. Those commitments are expressly transcribed in the European Community Schedule CXL of concessions and commitments, which is an integral part of the General Agreement on Tariffs and Trade of 1994 (‘the 1994 GATT’) contained in Annex 1A to the Agreement establishing the World Trade Organisation (‘the WTO’), signed in Marrakech on 15 April 1994 and approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1).

7 Annex 1A also contains the Agreement on Agriculture (OJ 1994 L 336, p. 22), Article 4 of which, headed ‘Market Access’, provides as follows:

‘1. Market access concessions contained in Schedules relate to bindings and reductions of tariffs, and to other market access commitments as specified therein.

2. Members shall not maintain, resort to, or revert to any measures of the kind which have been required to be converted into ordinary customs duties …, except as otherwise provided for in Article 5 and Annex 5.’

8 In that regard, footnote 1, which is referred to in Article 4(2) of the Agreement on Agriculture, provides:

‘These measures include quantitative import restrictions, variable import levies, minimum import prices, discretionary import licensing, non-tariff measures maintained through State-trading enterprises, voluntary export restraints, and similar border measures other than ordinary customs duties, whether or not the measures are maintained under country-specific derogations from the provisions [of the General Agreement on Tariffs and Trade of 1947], but not measures maintained under balance-of-payments provisions or under other general, non-agriculture-specific provisions of GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to [the Agreement establishing] the WTO ...’

9 Furthermore, pursuant to Article 7(2) of Council Regulation (EC) No 980/2005 of 27 June 2005 applying a scheme of generalised tariff preferences (OJ 2005 L 169, p. 1), the rate of ad valorem customs duty of 18.4% on the importation, outside tariff quotas, of mushrooms covered by subheading 2003 10 30 of the Combined Nomenclature in Annex I to Regulation No 2658/87 which come from the People’s Republic of China is reduced to 14.9%. Under Article 7(5) of Regulation No 980/2005, however, there is no reduction in the additional amount of EUR 222 per 100 kilograms of net drained weight which must, where relevant, be levied on such imports.

The dispute in the main proceedings and the question referred for a preliminary ruling

10 On 6 March 2006, Mr Chabo applied for customs clearance to place into free circulation 1 000 boxes of preserved mushrooms imported, outside tariff quotas, from the People’s Republic of China. As the goods were described as coming under subheading 2003 90 00 of the Combined Nomenclature in Annex I to Regulation No 2658/87, the customs clearance was carried out by applying to them only a preferential rate of customs duty of 14.9%, in accordance with that annex, read in conjunction with Article 7(2) of Regulation No 980/2005.

11 Following a goods classification report, it was established that those preserves were, in actual fact, covered by subheading 2003 10 30 of the Combined Nomenclature. Consequently, by an import duty notice of 21 February 2007, the Hauptzollamt Hamburg-Hafen sought to recover post-clearance import customs duties in the total amount of EUR 27 507.13, in application of a preferential rate of customs duty of 14.9%, to which was added an additional amount of EUR 222 per 100 kilograms of net drained weight in accordance with Annex I to Regulation No 2658/87, read in conjunction with Article 7(2) and (5) of Regulation No 980/2005.

12 On 5 March 2007, Mr Chabo lodged an objection to that notice, which was dismissed by decision of 7 December 2007.

13 On 9 January 2008, Mr Chabo brought an action for annulment of that decision before the Finanzgericht Hamburg (Finance Court, Hamburg). He considers the imposition of import customs duties referred to in that decision to be unlawful, in particular because the amount set out is tantamount to a prohibition on imports. For its part, the Hauptzollamt Hamburg-Hafen claims that that amount is based on the Common Customs Tariff applicable to goods covered by subheading 2003 10 30 of the Combined Nomenclature in Annex I to Regulation No 2658/87. This, it claims, is the regular rate of customs duty and does not amount to a prohibition on imports, but rather constitutes a legitimate tariff protection.

14 In that regard, the Finanzgericht Hamburg, first, stated that the preserved mushrooms at issue are covered by subheading 2003 10 30 of the Combined Nomenclature, since they are, in point of fact, mushrooms of the genus Agaricus, other than those provisionally preserved, completely cooked.

15 Secondly, referring to Case C‑26/90 Wünsche [1991] ECR I‑4961 and Case C‑296/94 Pietsch [1996] ECR I-3409, in which the Court held to be contrary to the principle of proportionality the level of the additional amount which, at the time, was applicable to imports of preserved cultivated mushrooms or preserved mushrooms under the rules on the common organisation of the market in the sector of products processed from fruit and vegetables, the Finanzgericht Hamburg expressed doubts as to the validity of the amount of EUR 222 per 100 kilograms of net drained weight chargeable on the importation, outside tariff quotas, of goods classified under subheading 2003 10 30 of the Combined Nomenclature in Annex I to Regulation No 2658/87.

16 Lastly, taking the view that the decision resolving the dispute in the main proceedings depends on whether the preferential rate of customs duty of 14.9%, to which is added a supplement of EUR 222 per 100 kilograms of net drained weight, is valid and could therefore be applied in the main proceedings, the Finanzgericht Hamburg decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Is the additional amount, arising under the third-country and preferential customs rate, of EUR 222 per 100 kilograms of net weight of goods charged on imports of preserved mushrooms of the genus Agaricus (subheading 2003 10 30 of the Combined Nomenclature) void for infringement of the principle of proportionality?’

Consideration of the question referred

17 By its question the national court asks, in essence, whether the amount of the specific customs duty of EUR 222 per 100 kilograms of net drained weight, which applies under Regulation No 1719/2005 and is charged on imports of preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature effected outside the quota opened by Regulation No 1864/2004, is valid in the light of the principle of proportionality.

18 With regard to judicial review of the conditions for application of the principle of proportionality, having regard to the broad discretion of the European Union legislature in areas such as those in issue in the present case, which involve political, economic and social choices on its part, and in which it is called on to undertake complex assessments, the legality of a measure adopted in those areas can be affected only if the measure is manifestly disproportionate having regard to the objectives which the competent institutions are seeking to pursue (see Joined Cases C-453/03, C-11/04, C-12/04 and C-194/04 ABNA and Others [2005] ECR I‑10423, paragraph 69, and Case C-504/04 Agrarproduktion Staebelow [2006] ECR I‑679, paragraph 36).

19 It is therefore necessary to identify, first, the objectives pursued by the contested legislation in order then to ascertain whether the amount of the specific customs duty at issue in the main proceedings is manifestly disproportionate for achieving those objectives.

20 It must be noted at the outset that the legislation in question consists of a number of interdependent legal instruments forming an overall system applicable to imports of preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature. The amount of the specific customs duty disputed in the main proceedings is therefore only one inherent and inseparable element of that system.

21 That system is presented as being the result of interaction between Annex I to Regulation No 2658/87 and Regulation No 980/2005, which respectively establish the common customs tariff and the scheme of generalised tariff preferences, on the one hand, and Regulation No 1864/2004, which governs the tariff quota, on the other hand. The conventional and specific customs duties resulting from the application of Article 7(2) and (5) of Regulation No 980/2005 are charged, in accordance with that annex, on those imports of preserves only when they are effected outside the tariff quota opened by Regulation No 1864/2004.

22 In particular, first, as is apparent from, inter alia, the legal basis on which they were adopted, Annex I to Regulation No 2658/87 and Regulation No 980/2005 relate to the area of the common commercial policy of the European Union and consequently pursue objectives specific to that area.

23 Thus, the amount of the specific customs duty at issue in the main proceedings, which is referred to in that annex, constitutes the faithful transposition into European Union law of the international commitments which the European Union has assumed in the context of the WTO. That amount corresponds, in actual fact, to the maximum authorised amount which the European Union accepted in the list of concessions and commitments annexed to the 1994 GATT. Furthermore, that list is consonant with the objective, pursued by the Agreement on Agriculture, of improving access to the agricultural markets of the members of that organisation and, in particular, with the objective pursued by Article 4 of that agreement, which seeks, by means of a tariff determination process, to organise that access in a more transparent and predictable manner by requiring the conversion of all commercial non-tariff border measures in the agricultural sector, henceforth prohibited, into consolidated customs duties.

24 Secondly, as is also apparent from the legal basis on which it was adopted, Regulation No 1864/2004, which establishes tariff quotas for preserved mushrooms imported from third countries, relates to the area of the common agricultural policy and therefore pursues objectives specific to that area and linked to the organisation of the common market concerned. That regulation seeks, as is apparent from, inter alia, recital 10 in its preamble, to guarantee an adequate supply of the goods concerned on the European Union market at stable prices whilst avoiding market disruptions in the form of severe price fluctuations and negative effects on European Union producers which are caused, or may be caused, by excessive imports of those goods from third countries.

25 Furthermore, Regulation No 1864/2004 is also consonant with objectives of the common commercial policy in so far as, as is apparent from recital 1 in its preamble, it transposes into European Union law the international commitments assumed by the European Union following the Agreement on Agriculture and transcribed in the European Community Schedule CXL of concessions and commitments, to open from 1 July 1995, under certain conditions, Community tariff quotas for preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature. Those commitments are, moreover, taken into account in Annex 7 to Section III of Part Three of Annex I to Regulation No 2658/87.

26 As is apparent from recital 9 in the preamble to Regulation No 1864/2004, that regulation also seeks to lay down detailed arrangements to ensure that quantities in excess of the tariff quotas are subjected to the levying of the full duty provided for in the Common Customs Tariff. It follows that the amount of the specific customs duty at issue in the main proceedings and applicable to imports of those preserves from third countries effected outside the quantities authorised by that regulation also pursues common-agricultural-policy objectives of dissuading those imports in economic terms and thus of avoiding unnecessary European Union market distortions resulting from excessive imports of those preserves.

27 Consequently, the abovementioned overall system and therefore the amount of the specific customs duty at issue in the main proceedings pursue both common-commercial-policy and common-agricultural-policy objectives.

28 In that regard, it must be pointed out that the case-law of the Court in the cases which gave rise to the judgments in Wünsche and Pietsch, to which the national court refers in its reference for a preliminary ruling, relates exclusively to safeguard measures adopted, at the time, autonomously, by the European Union under the rules on the common organisation of the market in the sector of products processed from fruit and vegetables, which relate to the area of the common agricultural policy. Those cases concerned measures chosen by the European Commission from among a very broad range of tariff and non-tariff measures capable of achieving the desired common-agricultural-policy objective.

29 By contrast, the imposition of a customs duty, such as that the amount of which is the subject of the question concerning validity referred by the national court in the present case, represents the only measure which the institutions of the European Union could adopt with regard to imports of the goods concerned in accordance with the international commitments subscribed to by the European Union in the context of the WTO. It follows from Article 4 of the Agreement on Agriculture that all non-tariff trade barriers in the agricultural sector must be abolished and converted into customs duties, the maximum rates of the latter being set out in the lists of concessions by members of the WTO.

30 The abovementioned case-law does not, however, in any way take into consideration the common-commercial-policy objectives inherent in the legislation at issue in the main proceedings, which are the result of the situation following on from the international commitments assumed by the European Union in the context of the Uruguay Round multilateral negotiations, in which the common customs tariff is the only available measure for protecting the European Union market in that sector with regard to imports from third countries. It follows that, having regard to the legal context of the main proceedings, that case-law cannot be relevant for the purpose of examining the present question in respect of validity.

31 In the present case, in order to assess the validity of the amount of the specific customs duty at issue in the main proceedings, it is important to examine whether that duty constitutes a manifestly disproportionate measure for achieving the objectives of the legislation in question.

32 In view of the inherent complexity in deciding, at the outset, in the negotiations within the WTO, upon the level of the specific customs duty at which those imports would become economically of little advantage, it cannot be claimed that the European Union institutions concerned exceeded the limits of their broad discretion in the matter by fixing the amount of the maximum European Union customs duty at EUR 222 per 100 kilograms of net drained weight. That amount cannot therefore be regarded as being manifestly disproportionate.

33 Likewise, having regard to the legal context of the main proceedings, it cannot be inferred from the fact that the amount of the specific customs duty at issue in the main proceedings would have the effect of depriving imports, outside tariff quotas, of any prospect of economic profitability that that amount is manifestly disproportionate in relation to the objectives pursued.

34 As regards the argument of the applicant in the main proceedings that the level of the specific customs duty at issue in the main proceedings prevents the sale of mushrooms from the People’s Republic of China in the European Union, in view of the cost of their production, it must be pointed out that, in accordance with the most-favoured nation principle referred to in Article 1 of the 1994 GATT, it is not permitted to set the specific customs duty at a level which differs each time with regard to each member of the WTO. Therefore, that argument based on the cost of production of mushrooms from one single Member State of the WTO, in the present case the People’s Republic of China, cannot establish that the European Union legislature exceeded its broad discretion when it fixed the amount of the specific customs duty at EUR 222 per 100 kilograms of net drained weight, which is applicable to imports, outside tariff quotas, from all the Member States of the WTO.

35 Having regard to all of the foregoing considerations, examination of the question referred has disclosed nothing capable of affecting the validity of the amount of the specific customs duty of EUR 222 per 100 kilograms of net drained weight, which applies under Regulation No 1719/2005 and is charged on imports of preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature and effected outside the quota opened by Regulation No 1864/2004.

Costs

36 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Third Chamber) hereby rules:

Examination of the question referred has disclosed nothing capable of affecting the validity of the amount of the specific customs duty of EUR 222 per 100 kilograms of net drained weight, which applies under Commission Regulation (EC) No 1719/2005 of 27 October 2005 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff and is charged on imports of preserved mushrooms of the genus Agaricus coming under subheading 2003 10 30 of the Combined Nomenclature in that annex and effected outside the quota opened by Commission Regulation (EC) No 1864/2004 of 26 October 2004 opening and providing for the administration of tariff quotas for preserved mushrooms imported from third countries, as amended by Commission Regulation (EC) No 1995/2005 of 7 December 2005.

[Signatures]