WRITTEN QUESTION P-3277/97

by Elly Plooij-van Gorsel (ELDR) to the Commission

(13 October 1997)

Subject: European importers of Bangladeshi textiles suffering from export duty levied retrospectively

Under the GSP imports from Bangladesh with certificates of origin are admitted to the European market on more favourable terms.

It appears that not all certificates issued by the authorities are issued properly. As a result, and on the recommendation of the Commission, Bangladesh has declared 15 000 certificates of origin invalid with retroactive effect. The Commission intends to levy import duties in respect of imports made in the years 1994-1996. This will cause considerable financial problems for many European importers.

1. Does the Commission feel that the Bangladesh authorities have sufficient expertise in preparing certificates of origin? If not, has the Commission provided them with adequate assistance in issuing them correctly?

2. When did the Commission become aware of the technical problems involving the certificates? Did it then immediately notify the imparters?

3. If not, why not? Does the Commission expect importers themselves to check the validity of official government certificates of origin? If so, how can businesses do so?

4. Does the Commission feel that it is right to levy duties retrospectively because of invalid official certificates? If so, does the Commission think it is reasonable to charge duty retrospectively three years after the date of import?

5. How does the Commission intend to prevent this of problem in the future?

Supplementary answer

given by Mr Monti on behalf of the Commission

(11 June 1998)

1. The Commission considers that the Bangladesh authorities were sufficiently conversant with the Community rules governing certificates of origin. For more than twenty years there have been no changes to the basic criteria that apply to obtaining origin, issuing such certificates and judging their validity. The civil servants and business people concerned, whether within the Community or outside, are broadly well aware of them.

In the course of previous meetings (from 1994 onwards) with Commission representatives, both the authorities responsible for issuing certificates of origin and the Bangladesh exporters were alerted to the requirements laid down by those rules.

Likewise, as part and parcel of the administrative cooperation prescribed by the said rules, the customs authorities of the Member States conduct regular discussions with the relevant authorities of Bangladesh to ask them to check certain certificates; such requests for checks are very often accompanied by the specific reference to the rules that should be applied.

The Commission's official delegation in Bangladesh informed the authorities and the relevant business circles of the new scheme of generalised preferences, which serves as a legal framework for the imports in question, as soon as it came into force in 1995 and made it available to them, together with all the documentation needed both by the government departments and the exporters of Bangladesh; it was only when the fact-finding mission was announced in November 1996 that the latter expressed interest in availing themselves of the information they had been offered.

Lastly, two seminars were organised in 1995 in Brussels by the Commission when the new scheme came into force; one of the seminars was devoted solely to the subject of rules of origin and was intended for the representatives of the authorities of the countries that were eligible.

Consequently, considerable doubt must be cast on the claim that there was a lack of knowledge of the rules in question.

2. The scale of the malfunctions that were occurring was discovered by the Commission in November/December 1996 when a Community fact-finding mission was conducted on the spot with the representatives of a number of Member States; that investigation confirmed the suspicions of some of them, these having been passed on to the Commission in 1996. Thus, from December 1996 onwards, the Member States were informed of the outcome of the investigation and they were asked to take all the measures needed to ensure that the duties arising from the investigation's findings were collected.

It was only when the said findings had acquired sufficient probative force, in the spring of 1997, that the Commission published a notice to importers in the Official Journal.

3. Community customs law, which has been established and unchanged for more than twenty years, provides that the burden of proving origin rests on importers, and that the validity of the certificate of origin must be capable of being proven to the satisfaction of the Community customs authorities. That principle is enshrined in consistent rulings of the Court of Justice.

It should be pointed out that that legal obligation is perfectly logical in that, while the request to be granted a tariff preference is conditional upon requirements relating to origin, it is clear that most importers, for obvious commercial and industrial reasons, seek assurances from their suppliers as to the quality of their products and, hence, as to the origin of the materials of which they are composed.

It should be noted, generally, that, based on rigorous subsidiarity, operational administration of the certificates takes place when goods are imported into the Community and that controls are carried out under the sole responsibility of the customs authorities of the Member States.

4. Collection of the customs duties is justified, if only because conscientious importers, European manufacturers and members of the public in general are increasingly unwilling to tolerate situations of unfair competition and fraudulent acts that vitiate the Community rules. The Commission is necessarily sensitive to such thinking, which is in line with its traditional role of guardian of the treaties, and, accordingly, of the Community customs law deriving therefrom.

The three year period is that laid down by the Community Customs Code, adopted by the Council, and which must, therefore, be applied in the first place by the Member States. That period is entirely consistent with traditional practice regarding limitation periods in the fields of customs and taxation.

5. The Commission, faced with the scale of these problems involving customs fraud, has no intention of remaining inactive; this it has made clear in other circumstances. Its intention is simply that the law in force at the relevant time should be complied with in relation to situations that have arisen in the past in order not to undermine, through retrospective action, the principle of legal certainty; as far as the future is concerned, in its Communication to the Council and Parliament on the management of preferential tariff arrangements,(1) it proposes a programme to revamp the administration of these arrangements, in which the question of certificates of origin and the problems encountered by importers are looked at in the much broader political context of revamping the administrative practices applied to these preferential arrangements.

(1) COM(97) 402 final.