Case T-377/00: Action brought on 19 December 2000 by Philip Morris International Inc., against the Commission of the European Communities
Date: 2001-03-10
Institutions: Court of First Instance
Subjects: European Commission, United States, action for annulment (EU), customs duties, fraud, tobacco industry

10.3.2001

EN

Official Journal of the European Communities

C 79/23

Pleas in law and main arguments

The applicant, a privately held company incorporated under
the Belgian laws, processes parboiled and non-parboiled brown
rice into various milled rice products. During the period from
1 July 1997 through 31 December 1998, it imported brown
rice purchased from a related U.S. company, Uncle Ben’s Inc.,
in Belgium, under a Community customs duty regime known
as the Cumulative Recovery System (CRS).

By its present action, the applicant seeks annulment of the
Commission decision addressed to the Director General of the
Belgian customs administration (‘BCA’), and contained in the
letter of Directorate General Budget
(‘DG Budget’) dated
29 September 2000 (Document no BUDG/B/03/D(00)/38549)
(the contested decision).

The contested decision communicates to the BCA the final
position of the Commission with regard to the determination
and settlement of the definitive amount of customs duties due
by the applicant under the CRS. Specifically, the decision,
basing itself explicitly on the findings of report no 98.6.073 of
the European Anti-Fraud Office (‘OLAF’),

— rejects the import prices that had been declared by the
applicant under the CRS and previously accepted by the
BCA,

— directs the BCA to determine the CRS import prices of
the applicant, and the definitive amount of import duties
due by the applicant under the CRS, in accordance with
the detailed calculations of the OLAF report, and

— directs the BCA to recover the net amount of CRS import
duties which are allegedly due by the applicant according
to the detailed calculations of the OLAF report, but had
been previously reimbursed to the applicant by the BCA.

The applicant brings forward three grounds for annulment of
the contested decision. It alleges that the Commission:

— has committed a manifest error of assessment in the

application of the CRS Regulation (1);

— has infringed fundamental principles of law forming part
of the Community legal order, such as the rights of
defence and the right not to be subjected to arbitrary
action; and

— has infringed an essential procedural requirement under
both Regulation 2185/96 and Regulation 1073/00 with
regard to the OLAF report which is the foundation of the
decision.

(1) Commission Regulation (EC) 703/97 of 18 April 1997 introdu-
cing for a trial period from 1 July 1997 to 30 June 1997 a
cumulative recovery system for determining certain import duties
on rice and amending Rebulation (EC) No 1503/96 (OJ L 104,
p. 12).

Action brought on 19 December 2000 by Philip Morris
International Inc., against the Commission of the Euro-
pean Communities

(Case T-377/00)

(2001/C 79/41)

(Language of the case: English)

An action against the Commission of the European Communi-
ties was brought before the Court of First Instance of the
European Communities on 19 December 2000 by Philip
Morris International Inc., a company established under the
laws of Delaware (USA), represented by Eric Morgan de Rivery
and Jacques Derenne, of Liedekerke Siméon Wessing Houthoff,
Brussels.

The applicant claims that the Court should:

— annul the Commission Decision to bring the action filed
on 3 November 2000 before the New York District
Court against the applicant, as publicly announced by
Commissioner Michaele Schreyer
in Press Release
IP/00/1255 of 6 November 2000

— order the Commission to pay the applicant’s costs.

Pleas in law and main arguments

The applicant is, through its affiliates and subsidiaries, engaged
in the sale of tobacco products outside the United States.
According to the applicant, the European Community has filed
an action in a United States court against the applicant to
recover inter alia, in the form of damages, customs and duties
and value-added tax related to alleged smuggling. The applicant
challenges the decision to take legal proceedings announced
by the Commission in the above-mentioned press release.

The applicant submits that the European Community (rep-
resented by the Commission) lacks competence to bring an
action before a United States court, and that it has acted
outside the limits of the powers conferred upon it by the EC
Treaty, as it is only the Member States which have competence
to seek allegedly unpaid customs and duties taxes.

In the alternative, the applicant submits that even if the
European Community were competent to bring the action, the
Community has infringed essential procedural requirements of
Article 280 EC and lacks financial and legal interest in bringing
an action on its own behalf as well as competence to bring an
action on behalf of the Member States.

Furthermore, the applicant submits that the contested decision
infringes general Community principles and constitutes a
misuse of powers.