CELEX: 62000CC0156
Language: en
Date: 2002-07-11 00:00:00
Title: Opinion of Mr Advocate General Léger delivered on 11 July 2002. # Kingdom of the Netherlands v Commission of the European Communities. # Action for annulment of Commission Decision C (2000) 485 final - Remission of import duties - Inward processing - Lack of equivalence between Community products and imported products. # Case C-156/00.

OPINION OF ADVOCATE GENERALLÉGER delivered on 11 July 2002  (1)
         Case C-156/00 Kingdom of the NetherlandsvCommission of the European Communities
            ((Action for annulment of Commission Decision C (2000) 485 final – Inward processing – Lack of equivalence between processed products and compensating products – Repayment or remission of import duties))
            
      
         
      1.  By this action, based on the provisions of Article 230 EC, the Kingdom of the Netherlands requests the Court of Justice to
      annul Commission Decision C (2000) 485 final of 23 February 2000 determining in a particular case that an application for
      remission of import duties is inadmissible in a specified amount and that there is no justification for remission of import
      duties in a separate amount.  
      
         			(2)
         		
      2.  The case relates to products falling within the inward processing customs procedure.
       I ─ Legal background
      
      
      
      A ─
       The relevant provisions of Regulation (EEC) No 2913/92  
      
      3.  Regulation (EEC) No 2913/92  
      
         			(3)
         		 assembles in a code the provisions of Community customs law which were previously dispersed amongst a large number of Community
      regulations and directives. It sought furthermore to amend the customs legislation then in force in order to make it more
      consistent, to simplify it and to remedy certain omissions which still existed. The aim was thereby to adopt complete Community
      legislation in that area.  
      
         			(4)
         		
      4.  According to Article 114(1)(a) of the Code, the inward processing procedure allows the use in the customs territory of the
      Community, in one or more processing operations, of non-Community goods which are intended for re-export from the customs
      territory of the Community in the form of compensating products, without those goods being subject to import duties.
      
      5.  Under the second indent of Article 114(2)(c) of the Code, processing operations include the processing of goods.
      
      6.  Article 114(2)(d) of the Code provides that compensating products are all those resulting from processing operations.
      
      7.  Under Article 114(2)(e) of the Code, equivalent goods are Community goods which are used instead of the import goods for the
      manufacture of compensating products.
      
      8.  Article 115 of the Code establishes that: 
      1.  Where the conditions laid down in paragraph 2 are fulfilled ... , the customs authorities shall allow:
      (a) compensating products to be obtained from equivalent goods; 
      
      (b) compensating products obtained from equivalent goods to be exported from the Community before importation of the import goods.
      
      
      
      2.  Equivalent goods must be of the same quality and have the same characteristics as the import goods. However, in specific cases
      ... , equivalent goods may be allowed to be at a more advanced stage of manufacture than the import goods.
      
      3.  Where paragraph 1 applies, the import goods shall be regarded for customs purposes as equivalent goods and the latter as import
      goods.
      
      
      9.  Article 220 of the Code provides for the possible subsequent entry in the accounts of a customs debt. According to Article
      220(2)(b) of the Code, there shall be no subsequent entry in the accounts of a customs debt, save in certain situations specified
      in that provision, where  
      the amount of duty legally owed failed to be entered in the accounts as a result of an error on the part of the customs authorities
      which could not reasonably have been detected by the person liable for payment, the latter for his part having acted in good
      faith and complied with all the provisions laid down by the legislation in force as regards the customs declaration.
      
      10.  Article 221 of the Code provides: 
      1.  As soon as it has been entered in the accounts, the amount of duty shall be communicated to the debtor in accordance with
      the appropriate procedures....
      
      3.  Communication to the debtor shall not take place after the expiry of a period of three years from the date on which the customs
      debt was incurred. However, where it is as a result of an act that could give rise to criminal court proceedings that the
      customs authorities were unable to determine the exact amount legally due, such communication may, in so far as the provisions
      in force so allow, be made after the expiry of such three-year period.
      
      
      11.  Article 235(b) of the Code defines the concept of the  
      remission of duties.
      
      12.  According to that provision,  
      remission means  
      either a decision to waive all or part of the amount of a customs debt or a decision to render void an entry in the accounts
      of all or part of an amount of import or export duty which has not been paid.
      
      13.  The second indent of Article 239(1) of the Code establishes that import duties may be remitted in situations  
      resulting from circumstances in which no deception or obvious negligence may be attributed to the person concerned. Remission may be made subject to special conditions.
      
      14.  Article 239(2) of the Code stipulates that  
      [d]uties 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.
      
      
      
      B ─
       The relevant provisions of Regulation (EEC) No 2454/93  
      
      15.  Regulation (EEC) No 2454/93  
      
         			(5)
         		 is the implementing Regulation which seeks to bring together in a single regulation the implementing provisions of Community
      customs law until then scattered over a large number of Community regulations and directives. Additionally, it modifies those
      rules in order to adapt them to the provisions of the Code and to extend their scope to take into account the comprehensive
      application of the Code and to formulate certain rules more precisely in order to achieve greater legal certainty in their
      application. Those amendments relate mainly to the provisions on customs debt.  
      
         			(6)
         		
      16.  Article 549 of the implementing Regulation defines the principal terms used in relation to the inward processing relief arrangements.
      
      17.  Under Article 549(g):equivalent compensation means: the system which ... allows the compensating products to be obtained from equivalent goods,
      which must fulfil the conditions laid down in Article 569(1).  
      
         			(7)
         		
      18.  Article 589 of the implementing Regulation relates to the payment of compensatory interest. It stipulates as follows: 
      1.  Where a customs debt is incurred in respect of compensating products or goods in the unaltered state,  
      
         			(8)
         		 compensatory interest shall be paid on the import duty applicable.
      
      2.  Paragraph 1 shall not apply:...
      
      
      ─
      where the holder of the authorisation requests release for free circulation  
      
      
      
      9
      According to Article 79 of the Code,  
      [r]elease for free circulation shall confer on non-Community goods the customs status of Community goods. and supplies proof that particular circumstances not arising from any negligence or deception on his part make it impossible
      or uneconomic to carry out the export operation under the conditions he had anticipated and duly substantiated when applying
      for the authorisation.  
      
      
      3.  The request for consideration of a case under the terms of the fifth indent of paragraph 2 shall be submitted to the customs
      authorities indicated by the Member State which issued the authorisation. It shall be admissible only if accompanied by all
      the supporting documents needed for a full examination of the case.
      
      
      19.  Article 589(3) of the implementing Regulation states, in essence, that, above a certain sum, customs authorities which intend
      to grant the request shall forward the request with a complete file to the Commission. The latter shall acknowledge receipt
      thereof within two months. If the Commission has not informed the Member State of any objection within two months from the
      date of acknowledgement of receipt, the Member State shall not charge compensatory interest.
      
      20.  Articles 905, 907 and 908 of the implementing Regulation relate to decisions taken by the Commission pursuant to a request
      for remission of customs duties forwarded by a Member State under Article 239 of the Code.
      
      21.  The first subparagraph of Article 905(1) of the implementing Regulation provides that:[w]here the decision-making customs authority to which an application for ... remission under Article 239(2) of the [Code]
      has been submitted cannot take a decision ... , 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.
      
      22.  Under Article 905(2) of the implementing Regulation, the Commission may ask for additional information to be supplied, where
      it is found that the information supplied by the Member State is not sufficient to enable a decision to be taken on the case
      concerned in full knowledge of the facts.
      
      23.  According to Article 907 of the implementing Regulation, the Commission shall then decide whether or not the special situation
      which has been considered justifies remission.
      
      24.  Article 908(2) of the implementing Regulation provides that, on the basis of the Commission's decision, the decision-making
      authority shall decide whether to grant or refuse the application made to it.
      
      
      
      II ─
       Factual and procedural background
      
      25.  The Netherlands company Cargill BV,  
      
         			(10)
         		 whose business activities consist of the production of starch and glucose syrup, holds authorisation for inward processing.
      That authorisation allows it to import maize from third countries free of duties subject to the maize being processed into
      glucose, the main compensating product,  
      
         			(11)
         		 as well as into a number of secondary compensating products.  
      
         			(12)
         		  Under the terms of that authorisation Cargill must, furthermore, export those products out of the customs territory of the
      Community after the processing operations.
      
      26.  Over the period from 1992 to 1994, Cargill placed 65 000 t of maize under the inward processing customs procedure.
      
      27.  Cargill, by virtue of its inward processing authorisation, is entitled to use, for the production of glucose intended for
      export, Community goods equivalent to the imported maize and to export them before the importation.
      
      28.  In the course of inspections carried out in 1994 and 1995, the inspection department of the Netherlands Ministry of Agriculture,
      Nature Management and Fisheries found that the main compensating product imported by Cargill had not been obtained entirely
      from imported maize, but as to 25% from imported maize and as to 75% from wheat of Community origin. The two products are
      not classified under the same tariff heading in the combined nomenclature code.
      
      29.  As a result of those inspections, the Netherlands authorities enquired of the Commission whether it authorised equivalence
      between the imported maize and wheat of Community origin. On 23 November 1995, the Commission responded that it could not
      allow such equivalence and referred, in particular, to differences in tariff protection between the two products.
      
      30.  On 18 November 1996, the Commission asked the Netherlands authorities to draw up a list of all goods placed under the inward
      processing procedure for the benefit of Cargill during the period 1992 to 1995 and again to report to it on notifications
      of irregularities or fraud.
      
      31.  The competent Netherlands authorities concluded, after making enquiries, that only part of the main compensating products
      exported under the inward processing procedure should be treated as having been manufactured from imported maize. They found,
      therefore, that the party concerned had not failed to comply with its obligations under the inward processing procedure in
      respect of 48 400 t of goods placed under that procedure in the period 1992 to 1994.
      
      32.  On 3 December 1996, the Netherlands authorities accordingly claimed payment from Cargill of a customs debt of NLG 17 491 244.45,
      corresponding to the import duties plus compensatory interest. That sum reflects the customs debt deriving from Cargill's
      erroneous application of the provisions relating to the inward processing procedure over the period 1992 to 1994.
      
      33.  Cargill lodged a complaint against the imposition of the customs debt. It also applied to the competent national authorities
      to suspend recovery of that debt in consideration of it providing a security for the amount owing. That request was granted.
      
      34.  On 2 December 1997, Cargill applied to the competent Netherlands authorities for remission of import duties.
      
      35.  On 22 April 1999, the Netherlands Government forwarded that application to the Commission. Pursuant to the application in
      question, the Commission adopted the contested decision.
       III ─ The contested decision, the action and the arguments of the parties
       A ─The contested decision
      
      36.  By the contested decision, the Commission determined, first, that the application for remission of import duties was inadmissible
      in so far as it related to compensatory interest in the sum of NLG 732 093.78 owing under Article 589 of the implementing
      Regulation. In the view of the Commission, compensatory interest did not form an integral part of the customs debt. It found,
      accordingly, that it was not for it to rule on the matter, but that it fell to the competent national authorities alone to
      take a decision in that regard.
      
      37.  Second, the Commission held that the application in question was inadmissible where it related to duties on imports made before
      3 December 1993. According to the Commission, those duties were time-barred, in accordance with Article 221(3) of the Code,
      and could no longer be claimed from the undertaking concerned. The amount in question in the case under consideration was
      NLG 15 679 301.49.
      
      38.  Third, the Commission found the application for remission of import duties to be unfounded to the extent that it related to
      the duties not forming part of the time-barred customs debt. The Commission held that the practice followed by Cargill complied
      with neither the regulations in force nor the terms themselves of its authorisation for inward processing. Community wheat
      could not be used as equivalent compensation under an authorisation for inward processing relating to the processing of maize
      into glucose.
      
      39.  The Commission conceded that, with the exception of the goods which could be the subject of equivalent compensation under
      the authorisation granted, there had been compliance with the various customs rules involved. It also found that, for several
      years and in relation to considerable quantities of goods, the competent customs authorities had not objected to the practice
      followed by Cargill. The Commission took the view, therefore, that all those circumstances together were such as to give rise
      to a special situation within the meaning of Article 239 of the Code. It pointed out none the less that such a situation could
      only lead to remission of import duties if there was no deception or obvious negligence attributable to the person concerned.
      
      40.  The Commission states that, although Cargill has not committed any deception, it has shown obvious negligence.
      
      
      
      B ─
       The action and the arguments of the parties
      
      41.  The application of the Kingdom of the Netherlands was lodged at the Registry of the Court of Justice on 27 April 2000.
      
      42.  The Kingdom of the Netherlands claims that the Court should:
      
      
      ─
         Annul the contested decision; 
      
      
      
      ─
         Order the Commission to pay the costs. 
      
      
      
      43.  The Commission claims that the Court should:
      
      
      ─
         Dismiss the action; 
      
      
      
      ─
         Order the applicant to pay the costs. 
      
      
       IV ─ The pleas in law raised by the Netherlands Government
      
      44.  The Netherlands Government raises six pleas in law in support of its action, grouped into three heads of claim:
      
      
      ─
         first, the contested decision infringes Article 589 of the implementing Regulation and, in the alternative, the obligation
         to state reasons laid down in Article 253 EC, in so far as the contested decision declared inadmissible that part of the application
         for remission which seeks to recover compensatory interest. 
      
      
      
      ─
         second, the contested decision infringes Article 221 of the Code, in so far as the contested decision declared part of the
         application in question inadmissible on the grounds that it was time-barred. 
      
      
      
      ─
         third, the contested decision infringes Article 239 of the Code and Article 905 of the implementing Regulation, the principle
         of proportionality and, lastly, the duty to state reasons set out in Article 253 EC. 
      
      
       V ─ The first head of claim regarding inadmissibility of the application for remission of compensatory interest
      
      45.  The Netherlands Government submits two pleas in law in support of that head of claim. It contends primarily that, by finding
      its application for remission of compensatory interest to be inadmissible, the Commission infringed Article 589 of the implementing
      Regulation. In the alternative, it alleges that the Commission infringed the duty laid down in Article 253 EC.
       Infringement of the obligation to state reasons
      
      46.  The Netherlands Government charges the Commission with failing to comply with the procedural requirements relating to the
      statement of reasons. According to the Government, the contested decision does not enable it to ascertain the reasons which
      led the Commission to hold that the part of the application for remission of customs duties relating to compensatory interest
      was inadmissible.
      
      47.  The Court of Justice has established the following principles in relation to the statement of reasons required under Article
      253 EC.  
      
         			(13)
         		
      48.  The statement of reasons must be appropriate to the nature of the act and must disclose clearly and unequivocally the reasoning
      followed by the institution in such a way as to enable the persons concerned to ascertain the reasons for the measure taken
      and to enable the competent court to exercise its power of review. The requirement to state reasons must be evaluated according,
      amongst other criteria, to the content of the measure and the interest which the addressees thereof or other parties to whom
      it is of concern may have in obtaining explanations. It is not necessary for the reasoning to specify all the relevant facts
      and points of law, since the question whether the statement of reasons meets the requirements of Article 253 EC must be assessed
      with regard not only to its wording but also to its context and to all the legal rules governing the matter in question. 
      
      49.  In paragraph 14 of the contested decision, the Commission stated as follows: The application for remission, sent by the Netherlands authorities to the Commission by the aforementioned letter of 22 April
      1999, relates to the sum of NLG 17 491 244.45. That sum includes the compensatory interest owed under Article 62 of Regulation
      (EEC) No 2228/91  
       [
         			(14)
         		 ]  and Article 589 of the [implementing] Regulation (NLG 732 093.78).That compensatory interest, as taxation within the ambit of national law, does not form part of the customs debt and the Commission
      cannot, therefore, rule on any remission thereof. It is accordingly for the national authorities to determine that question.
      The application for remission is therefore inadmissible in respect of that compensatory interest.
      
      50.  It is apparent from paragraph 14 of the contested decision that the Commission set out concisely, but clearly, the reasons
      in fact and law which led it to find that the application for the remission of compensatory interest incurred in respect of
      the customs debt was inadmissible.
      
      51.  As regards the facts, the Commission stated that the application for remission related to compensatory interest in the sum
      of NLG 732 093.78, arising from a customs debt in connection with the inward processing relief arrangements.
      
      52.  In relation to points of law, the Commission stated that the compensatory interest at issue should be classified as taxation.
      As such, it is a matter of national law and does not form part of the customs debt. The Commission concluded therefrom that
      it fell to the national authorities to determine whether that application was founded.
      
      53.  The Commission admittedly did not set out formally the legal texts on which it based its arguments. It should be pointed out,
      however, that the decision in question is directed at the national authorities responsible for customs. Given the nature of
      the addressees of the contested decision, the fact that there was no formal reference to the legal texts on which the Commission
      founded its arguments does not seem to me such as to prevent those addressees from understanding the Commission's legal arguments.
      The contested decision is directed, that is, at the national customs authorities, namely, professionals with a full knowledge
      of the subject and who are, moreover, the competent authorities under the general law.
      
      54.  I take the view, accordingly, that the contested decision does satisfy the requirements of Article 253 EC. The plea in law
      alleging infringement of that provision must therefore be dismissed.
       Infringement of Article 589 of the implementing Regulation
      
      55.  The Netherlands Government asserts that it is apparent from the wording of Article 589(1) of the implementing Regulation that
      compensatory interest must be classified as a  
      customs debt, within the meaning of the Code. It points out that, under Article 589(3) of the implementing Regulation, the customs authorities
      must, in certain circumstances, forward the request for remission of compensatory interest to the Commission. According to
      the Netherlands Government, it follows from those provisions that the Commission could not refuse to determine the application
      for remission of compensatory interest.
      
      56.  It should be borne in mind that, according to Article 589(1) of the implementing Regulation, all customs debts give rise to
      the payment of compensatory interest. Article 589(2) of that Regulation sets out the exceptions to the principle that such
      interest is payable. Article 589(3) of the implementing Regulation details the procedure to be followed in order for the provisions
      of Article 589(2) of the implementing Regulation to apply.
      
      57.  It is apparent from the wording of Article 589(1) of the implementing Regulation that the compensatory interest is inseparable
      from the customs debt. Under that provision,  
      [w]here a customs debt is incurred in respect of compensating products ... , compensatory interest  
       shall be paid   on the import duty applicable.  
      
         			(15)
         		 The corresponding French expression  
      donner lieu means  
      to lead to,  
      to cause, implying that the compensatory interest is closely bound up with the customs debt. It is only payable if the customs debt
      is payable. Accordingly, if there is remission of the customs debt, as defined in Article 235(b) of the Code, the compensatory
      interest incurred in respect of that customs debt is not payable.
      
      58.  It follows from the foregoing that, where there is no application in the main proceedings for remission of a customs debt,
      the court cannot examine an application for remission of the compensatory interest arising therefrom.
      
      59.  There are, however, exceptions to that principle. Under Article 589(3) of the implementing Regulation, the Commission can,
      under certain circumstances, determine an application for the remission of compensatory interest.
      
      60.  Article 589(2) of the implementing Regulation establishes that the exceptions to the rule that compensatory interest is paid
      relate in essence to situations where goods or compensating products are  
      released for free circulation.
      
      61.  Under Article 24 EC,  
      [p]roducts coming from a third country shall be considered to be in free circulation in a Member State if the import formalities
      have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that
      Member State and if they have not benefited from a total or partial drawback of such duties or charges. Under the first paragraph of Article 79 of the Code, release for free circulation confers on non-Community goods the customs
      status of Community goods. The second paragraph of Article 79 of the Code establishes that the customs procedure in question
       
       shall entail application of commercial policy measures, [
      
         			(16)
         		] completion of the other formalities laid down in respect of the importation of goods and the charging of any duties legally
      due.
      
      62.  The third subparagraph of Article 589(3) of the implementing Regulation stipulates that the Commission's competence in relation
      to requests for the non-payment of compensatory interest is strictly confined to situations in which, above a certain sum
      established in the aforementioned Article 589(3), the customs authorities intend to grant the request submitted on the basis
      of one of the situations listed in Article 589(2) of the implementing Regulation, that is, where there is release for free
      circulation of goods or compensating products.
      
      63.  In the present case, the documents before the Court show that the maize imported by Cargill is not intended for release for
      free circulation, but comes under the inward processing procedure.
      
      64.  It is common ground that the maize imported by Cargill was re-exported outside the Community after being processed into glucose
      and that no customs duty or any charge having equivalent effect was levied in a Member State when the maize was brought into
      the Community customs territory. Since they were not placed under the procedure for free circulation, the compensating products
      in question did not fall within the scope of the provisions of Article 589 of the implementing Regulation.
      
      65.  Having regard to the foregoing considerations, I am of the view that the Commission could not, on the basis of Article 589(3)
      of the implementing Regulation, rule on the application for non-payment of compensatory interest submitted by Cargill to the
      Netherlands customs authorities. The Commission was therefore fully entitled to declare the application for non-payment of
      compensatory interest under Articles 589(1) and 589(3) of the implementing Regulation to be inadmissible.
      
      66.  For the sake of completeness, it should be pointed out that the national authorities have powers under the general law in
      relation to individual decisions on customs rules. In the present context, the Commission enjoys delegated powers strictly
      defined by the Code and the implementing Regulation.
      
      67.  Article 4(3) of the Code thus provides that the customs authorities  
      
         			(17)
         		 are the authorities competent to apply customs rules. In that capacity, they have general prima facie powers for surveillance
      and monitoring of the correct application of those rules by private natural or legal persons.
      
      68.  Under Article 6 of the Code, requests for individual decisions are addressed to the customs authorities.
      
      69.  In the absence of any legal basis, it is therefore not for the Commission to rule on the application for non-payment of compensatory
      interest.
      
      70.  The plea in law alleging infringement of Article 589 of the implementing Regulation must therefore be dismissed.
       VI ─ The second head of claim alleging infringement of Article 221 of the Code
      
      71.  The Netherlands Government maintains that the Commission reviewed the legality of the communication of the customs debt  
      
         			(18)
         		 by the national authorities. It takes the view that the Commission could not, without infringing Article 221 of the Code
      and the principles governing the matter, substitute its finding for that of the national authorities. The Netherlands Government
      contends that those authorities had, moreover, explicitly informed the Commission that the issue of prescription was the object
      of proceedings between the competent authorities and Cargill.
      
      72.  The Commission accepts that it is not for it to determine whether the debt is time-barred, but justifies its refusal to consider
      the application for remission of the customs debt which arose prior to 3 December 1993 by the fact that it is apparent from
      the documents forwarded by the Netherlands authorities that those debts are clearly time-barred. It claims, further, that,
      in the context of the procedure for remission of a customs debt, submission of the matter to the Commission is conditional
      on the customs debt being  
      effectively recoverable. Since the debt is clearly time-barred, it is no longer effectively recoverable. The application for remission
      is therefore, according to the Commission, inadmissible.
      
      73.  A preliminary point to note is that, in the context of an action for annulment under Article 230 EC, the sole task of the
      Court of Justice is to examine whether the pleas in law raised in support of that application are well-founded. It is not
      for the Court to substitute its own findings for those of the maker of the decision in dispute nor to issue directions to
      the Community institutions.
      
      74.  Further, as has been seen,  
      
         			(19)
         		 the national authorities have powers under the general law in relation to individual decisions on customs rules. In that
      field, the Commission enjoys delegated powers, strictly defined by the Code and the implementing Regulation.
      
      75.  In common with the Netherlands Government, I believe that the Commission did exceed its powers by finding the application
      for remission to be inadmissible in that it was, in part, time-barred.
      
      76.  The last sentence of Article 221(3) of the Code provides expressly that, where the customs authorities have been unable to
      determine the exact amount of duties legally due, as the result of an act that could give rise to criminal court proceedings,
      those authorities may communicate the customs debt to the debtor after expiry of the period laid down in the aforementioned
      Article 221(1) (that is, a period of three years from the date on which the debt arose). It follows from that provision that
      the involvement of the criminal courts may be relevant to the time-barring of the customs debt. Prescription and, in particular,
      the ability to stop time running and the manner it which it may be stopped, are the exclusive preserve of national law and
      the powers of review of the national court. Accordingly, only the national court, hearing an action contesting communication
      of a customs debt, is competent to determine whether the requirements are satisfied to allow the debt to be communicated after
      expiry of the three-year period established in the last sentence of Article 221(3) of the Code.
      
      77.  The Netherlands Government also disputes the premiss on which the Commission bases its arguments. In its view, the Commission
      cannot claim that the customs debt at issue is time-barred since the national authorities expressly informed it that the issue
      of prescription was the object of proceedings between the customs authorities and Cargill.
      
      78.  I likewise take the view that the Commission was not entitled to find the customs debt which arose before 3 December 1993
      to be manifestly time-barred. By ruling thus, the Commission therefore substituted its finding for that of the national authorities
      and exceeded the powers conferred on it by the Code.
      
      79.  Unlike the Commission, I do not believe that submission of the matter to the Commission, in the context of the remission procedure,
      is conditional on proving that the customs debt is  
      effectively recoverable. The Commission's stance amounts to making the right to bring a case before it, in the context of an application
      for the remission of customs duties, subject to a condition not laid down in Article 239 of the Code or Article 905 of the
      implementing Regulation.  
      
         			(20)
         		
      80.  It is apparent from the wording of Article 239 of the Code and Article 905 of the implementing Regulation that only two conditions
      must be satisfied in order for a party to submit to the Commission an application for remission of customs duties by the Member
      State to which the competent national authority belongs. On the one hand, the competent national authority must be unable
      itself to determine the merits of the application. On the other, the application must be 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.
      
      81.  Article 905 of the implementing Regulation does not set a time-limit for submitting the matter to the Commission, any more
      than it defines when that submission must take place. One must conclude that, in the context of Article 905 of the implementing
      Regulation, it is for the Member State to which the competent national authority belongs to decide the appropriate time to
      bring the matter before the Commission. Accordingly, where there is an action relating to the prescription of a customs debt,
      the Member State in question must be able to submit the matter to the Commission before final disposal of that action.
      
      82.  It emerges from the foregoing considerations that the Commission, by finding the part of the application for remission of
      the customs debt relating to the debt arising prior to 3 December 1993 to be inadmissible on the grounds that it was time-barred,
      infringed the provisions of the last sentence of Article 221(3) of the Code. I therefore propose that the Court should annul
      the contested decision in that regard.
       VII ─ Third head of claim relating to the unfounded nature of the application for remission of the customs duties not forming
      part of the time-barred customs debt
      
      83.  The Netherlands Government submits three pleas in law in support of this head of claim. It contends that the Commission infringed
      Article 905 of the implementing Regulation by finding the application for remission of the customs duties not forming part
      of the time-barred customs debt to be unfounded. In the alternative, it asserts that the Commission infringed the principle
      of proportionality. In the further alternative, it submits that the Commission breached the duty under Article 253 EC by failing
      to comply with the procedural requirements relating to the statement of reasons. The plea in law alleging infringement of the duty to state reasons (Article 253 EC) 
      
      84.  The Netherlands Government accuses the Commission of failing to comply with the procedural requirements relating to the statement
      of reasons. In its view, the contested decision does not enable it to ascertain the reasons which led the Commission to hold
      that the part of the application for remission of customs duties relating to the part of the customs debt which was not time-barred
      was unfounded. It charges the Commission in particular with failing to state the grounds on which it determined that the penalty
      complied with the principle of proportionality.
      
      85.  As regards the statement of reasons required by Article 253 EC, the Court of Justice has, as we have seen, established a number
      of principles.
      
      86.  According to the settled case-law of the Court, a decision complies with the requirements of Article 253 EC even if it does
      not specify all the relevant facts and points of law on which the author based its decision. Compliance with the requirements
      of Article 253 EC must also be assessed on the basis of the context and the legal rules governing the matter. 
      
      87.  Admittedly, the contested decision does not mention the grounds on which its author considers the penalty to be proportionate.
      However, paragraphs 24 to 35 of that decision show that the Commission dwelt at length on the reasons which led it to hold
      that Cargill had shown obvious negligence. Thus, in paragraph 26, it set out in what way Cargill revealed itself to have professional
      expertise in the field. Likewise, in paragraph 27, it stated in what respects the customs rule which gave rise to the error
      was not complex. Cargill's lack of diligence was also set out in detail in paragraphs 30 to 35. The Netherlands Government
      was therefore in a position to know the grounds in fact and law on the basis of which the Commission found to be ill-founded
      the application for remission of customs duties in relation to the part of the debt which was not time-barred and drew the
      consequences of that finding laid down by the Code, namely that it should require payment of the customs duties due irrespective
      of the advantage the infringer actually obtained.
      
      88.  The plea in law alleging infringement of Article 253 EC should therefore be dismissed.
       The plea in law alleging infringement of Article 905 of the implementing Regulation
      
      89.  According to the Netherlands Government, the Commission misapplied the concept of  
      obvious negligence referred to in Article 905 of the implementing Regulation. The Government takes the view that Cargill did indeed have extensive
      professional experience in the agricultural products sector, but that it would be wrong to conclude that, as a result of that
      experience, Cargill should have realised that it could not use wheat in place of maize for the manufacture of the exported
      glucose. It submits three arguments seeking to establish that the Commission was wrong to find Cargill had been obviously
      negligent.
      
      90.  First, it contends that the contested decision shows that the Commission imposed more stringent requirements on the party
      concerned than those which the competent authorities were capable of satisfying. As the Commission itself stated, the competent
      customs authorities raised no objection to the transactions of the party concerned, even though they had been carried out
      for many years.
      
      91.  Second, the Netherlands Government submits that Cargill was entitled to take the view that the products used were equivalent
      products, on the basis of the arguments set out by the Commission in a letter of 15 December 1994 sent to the Netherlands
      authorities responsible for issuing inward processing authorisations. It emerges from that letter, the Netherlands Government
      argues, that Waxy maize and standard quality maize could be treated as equivalent:... even if maize of that particular quality [the Waxy maize] is used, that maize, mixed with standard quality maize, may
      be accepted to the extent that the quality benefits, as regards part at least, even if not entirely, have been waived.
      
      92.  According to the Netherlands Government, the Commission accepts that various varieties of maize are equivalent in so far as
      the maize is processed into a number of categories of compensating products. Pursuing that line of argument, the Netherlands
      Government maintains that it was permissible to deem maize and wheat to be interchangeable raw materials for the purposes
      of the manufacture of an identical compensating product, that is, glucose.
      
      93.  Third, the Netherlands Government draws attention to the fact that the practice adopted by the party concerned is a common
      practice in Europe. In view of the circumstances one cannot therefore, it asserts, describe the conduct of the party concerned
      as  
      negligent and even less charge it with obvious negligence.
      
      94.  In the alternative, the Netherlands Government maintains that, in any event, the application of Article 905 of the implementing
      Regulation in the contested decision contravenes the principle of proportionality. The procedure resulted in a total customs
      debt of NLG 17 491 244.45 whilst, for the whole of the period in question, the company made a relatively modest profit estimated
      at NLG 710 700. Under those circumstances, and bearing in mind the facts of the case, the Government argues that it would
      be disproportionate not to remit the customs debt, that debt being higher than the advantage obtained by the party concerned,
      as Cargill stated in its application to the customs authorities.
      
      95.  The Netherlands Government adds that the Commission did not formally rule on the aforementioned claim and that, for that reason
      also, the contested decision cannot stand.
      
      96.  As the Commission quite rightly indicated, the concept of  
      obvious negligence within the meaning of the Code and the implementing Regulation has been addressed in abundant case-law of this Court. That
      case-law delineates the following principles.
      
      97.  First, the concept must be interpreted in such a way that the number of cases of remission remains limited. In  
       Söhl & Söhlke ,  
      
         			(21)
         		 the Court of Justice accordingly held that  
       the repayment or remission of import ... duties, which may be made only under certain conditions and in cases specifically
      provided for, constitutes an exception to the normal import and export procedure and, consequently, the provisions which provide
      for such repayment or remission are to be interpreted strictly. Since a lack of  
      obvious negligence is an essential condition of being able to claim repayment or remission of import or export duties, it follows that that
      term must be interpreted in such a way that the number of cases of repayment or remission remains limited.  
      
         			(22)
         		  It is in the light of the foregoing considerations that one must interpret the concept of obvious negligence.
      
      98.  Second, in order to assess whether there is  
      obvious negligence within the meaning of Article 239 of the Code and Article 905 of the implementing Regulation, regard must be had to the precise
      nature of the error and the professional experience of, and the care taken by, the trader.  
      
         			(23)
         		
      99.  Those three cumulative criteria have likewise been the subject of abundant case-law which can be summarised in outline as
      follows.
      
      100.  As regards the first criterion relating to the precise nature of the error, the Court of Justice has held that this amounts
      in fact to assessing the complexity of the provisions non-compliance with which resulted in the customs debt being incurred.
       
      
         			(24)
         		
      101.  As regards the second criterion relating to the professional experience of the trader, it is necessary to examine whether
      or not he is a trader whose business activities consist mainly in import and export transactions and whether he had already
      gained some experience in the conduct of such transactions.  
      
         			(25)
         		
      102.  Further, in relation to the third criterion of the care taken by the trader, the Court of Justice has held that, wherever
      he has doubts as to the exact application of the provisions non-compliance with which may result in a customs debt being incurred,
      the onus is on the trader to make inquiries and seek all possible clarification to ensure that he does not infringe the provisions
      in question.  
      
         			(26)
         		
      103.  It is for the relevant competent authorities to determine whether there is no obvious negligence on the part of the trader.
      Since the Netherlands Government forwarded the application for remission of customs duties to the Commission, it falls to
      the Commission to determine whether the conditions enabling it to find that there was no obvious negligence are fulfilled.
      
      
      104.  In the context of an action under Article 230 EC, the Court of Justice must examine whether the Commission erred in its assessment
      of the facts, having regard to the evidence produced. In any event, the party alleging it must prove any such erroneous assessment.
      
      105.  The second criterion presents no difficulty. The Netherlands Government acknowledges that Cargill is a major undertaking with
      extensive experience in the field of inward processing. It is common ground that it participates in, or has participated in,
      numerous procedures, including customs procedures, in connection with the common agricultural policy. Cargill was therefore
      adjudged, rightly, to be a trader whose activities consist, mainly, in import and export transactions and which had acquired
      undisputed experience in the conduct of such transactions.
      
      106.  As regards the first criterion relating to the nature of the error, the Commission explained, in paragraph 27 of the contested
      decision, that the rules whose erroneous application gave rise to the customs debt were not at all complex. Under Article
      549(g) and Article 569(1) of the implementing Regulation, compensating products can only be obtained from equivalent goods
      if the latter fall within the same eight-digit subheading of the CN code, are of the same commercial quality and have the
      same technical characteristics as the import goods.
      
      107.  In the case under consideration, Cargill had to ascertain whether the wheat could be treated as goods equivalent to the maize
      intended for processing for which the inward processing authorisation had been granted. To do so, Cargill had only to check
      whether the two products fell within the same eight-digit subheading of the CN code. In fact, that condition is not satisfied,
      since the two products in question are not within the same subheading of the CN code.
      
      108.  It is apparent from the foregoing that the Commission did not commit an error of assessment in finding that the rules which
      Cargill failed to apply, and which gave rise to the customs debt, were not complex. The Code's definition of equivalent goods
      is, in fact, clear and simple.
      
      109.  The Netherlands Government's argument based on the Commission's letter regarding equivalence between Waxy maize and standard
      quality maize does not seem to me such as to justify Cargill's error. In contrast to the terms of that letter, the issue,
      in the present case, is not one of assessing the equivalence between two types of maize, but of ascertaining the equivalence
      between maize and wheat which are, intrinsically, different products. As regards the concept of  
      equivalence, one should note that the equivalence between two products is determined on the basis of the import goods and not of the
      finished product. Article 115(1) of the Code and Article 549(g) of the implementing Regulation leave no room for ambiguity
      on that point. According to those provisions, there can only be equivalent compensation where the compensating products are
      obtained  
      from equivalent goods .   The fact that the products once processed may have the same characteristics and be interchangeable is therefore irrelevant
      for the purposes of their classification as  
      equivalent products. Furthermore, it seems to me surprising, to say the least, given its experience and knowledge of the customs procedure in
      question, that a trader such as Cargill, in doubt as to the interpretation of the concept of  
      equivalent goods in Article 115(1) of the Code and Article 549(g) and 569 of the implementing Regulation, did not see fit to dispel that purported
      ambiguity by making more specific enquiries of the competent authorities. Cargill's failure to do so thus indicates that it
      did not act with the diligence which this Court requires in that regard.
      
      110.  Nor do I consider well-founded the argument that an importer cannot be required to have more extensive knowledge than the
      customs officials. This Court has in fact explicitly rejected such a view on the grounds that to establish any such principle
       
      would have the consequence that it would be practically impossible to effect post-clearance recovery since the error will
      inevitably always have been committed by the official concerned failing to examine all the aspects of a factual or legal situation.  
      
         			(27)
         		  It has accepted none the less that it was necessary to look specifically at all the circumstances of the case in order to
      determine whether or not the error was detectable by the trader in question.  
      
         			(28)
         		  In that regard, the competent authority charged with assessing the circumstances had to take into account the nature of
      the error and the professional experience of, and the care taken by, the trader.  
      
         			(29)
         		
      111.  Having regard to the fact that the applicable rules were not complex and Cargill's experience in the field, I take the view
      that the Commission did not err in finding that such a trader was unjustified in treating maize and wheat as equivalent products.
      
      112.  As regards the third criterion, I have already stated that Cargill's conduct did not seem to me to be the diligent conduct
      required by the case-law of this Court.
      
      113.  It emerges from all the foregoing considerations that the Commission did not, in dismissing the application for the remission
      of duties not forming part of the time-barred debt, infringe the provisions of Article 239 of the Code and Article 905 of
      the implementing Regulation. 
       The plea in law alleging infringement of the principle of proportionality
      
      114.  The Netherlands Government submits, in the alternative, that, by reason of the discrepancy between the amount of the duty
      claimed by the customs authorities and the modest financial advantage which, in its view, Cargill obtained, the contested
      decision infringes the principle of proportionality.
      
      115.  In that regard, the Court of Justice has invariably held that Article 859 of the implementing Regulation establishes an exhaustive
      set of rules on failures to fulfil obligations, within the meaning of Article 204(1)(a) of the Customs Code, which  
      have no significant effect on the correct operation of the ... customs procedure in question.  
      
         			(30)
         		  It is apparent from that case-law that failure to perform one of the obligations laid down by the customs procedure under
      which the goods are placed does not give rise to a customs debt provided the failure in question does not have a significant
      effect on the correct operation of the procedure. That condition is only fulfilled if the failure at issue is contained in
      the list set out in Article 859 of the implementing Regulation.
      
      116.  In this case, Cargill's failures to fulfil its obligations do not appear in the list of those which  
      have no significant effect on the correct operation of the customs procedure in question according to Article 859 of the implementing Regulation. The penalty imposed by the Commission as a result of Cargill's failure
      to comply with the customs requirements cannot, therefore, be adjudged disproportionate.
       VIII ─ Costs
      
      117.  Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs, if they have been
      applied for in the successful party's pleadings. 
      
      118.  Since the Kingdom of the Netherlands has been unsuccessful in the essential aspects of its submissions and the Commission
      has applied for an order for costs against that Member State, I take the view that the Court should make such an order.
        IX ─ Conclusion
      
      119.  In view of the foregoing, I therefore propose that the Court should:
      
      
      ─
         annul Commission Decision C (2000) 485 final of 23 February 2000 determining in a particular case that an application for
         remission of import duties was inadmissible in a specific amount and that there was no justification for remission of import
         duties in another amount, in that it finds the application for remission to be inadmissible in so far as it relates to duties
         in connection with imports made prior to 3 December 1993, in the sum of NLG 15 679 301.49, which duties it found to be time-barred,
         under Article 221(3) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, and
         no longer recoverable from the Netherlands company Cargill BV; 
      
      
      
      ─
         dismiss the action in all other respects, and  
      
      
      
      ─
         order the Kingdom of the Netherlands to pay the costs. 
      
      
      
       1 –
         
           Original language: French.
      
      2 –
         
         Hereinafter  
            the contested decision.
         
      
      3 –
         
         Regulation of the Council of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1, hereinafter  
            the Code).
         
      
      4 –
         
         See the first and second recitals.
      
      5 –
         
         Regulation of the Commission of 2 July 1993 laying down provisions for the implementation of [the Code] (OJ 1993 L 253, p. 1,
            hereinafter  
            the implementing Regulation).
         
      
      6 –
         
         See the second and third recitals.
      
      7 –
         
         That provision requires that  
            where use is to be made of equivalent compensation, the equivalent goods must fall within the same eight-digit subheading
            of the CN code, be of the same commercial quality and have the same technical characteristics as the import goods.
         
      
      8 –
         
         According to Article 84(3) of the Code, goods in the unaltered state are  
            import goods which, under the inward processing procedure ... have undergone no form of processing.
         
      
      9 –
         
         According to Article 79 of the Code,  
            [r]elease for free circulation shall confer on non-Community goods the customs status of Community goods.
         
      
      10 –
         
         Hereinafter  
            Cargill.
         
      
      11 –
         
         Under Article 549(a) of the implementing Regulation,  
            main compensating products shall mean  
            the compensating products for the production of which the use of the inward processing procedure was authorised.
         
      
      12 –
         
         According to Article 549(b) of the implementing Regulation,  
            secondary compensating products [are] compensating products other than the main compensating products which are a necessary
            by-product of the processing operation. They are, in the case under consideration, residues from the starch industry under CN code 2303 10 11 and maize gluten animal
            feed under CN code 2303 10 19.
         
      
      13 –
         
         Joined Cases 296/82 and 318/82  
             Netherlands and Leeuwarder Papierwarenfabriek   v  
             Commission   [1985] ECR 809, paragraph 19; Case C-350/88  
             Delacre and Others   v  
             Commission   [1990] ECR I-395, paragraphs 15 and 16; Case C-367/95 P  
             Commission   v  
             Systraval and Brink's France   [1998] ECR I-1719, paragraph 63 and Case C-265/97 P  
             VBA   v  
             Florimex and Others   [2000] ECR I-2061, paragraph 93.
         
      
      14 –
         
         Regulation of the Commission of 26 June 1991 laying down provisions for the implementation of Regulation (EEC) No 1999/85
            on inward processing relief arrangements (OJ 1991 L 210, p. 1). That instrument was repealed and replaced by Article 589 of
            the implementing Regulation.
         
      
      15 –
         
         Emphasis added.
      
      16 –
         
         Under Article 1(7) of the implementing Regulation,  
            commercial policy measures means non-tariff measures established, as part of the common commercial policy, in the form of Community provisions governing
            the import and export of goods, such as surveillance or safeguard measures, quantitative restrictions or limits and import
            or export prohibitions.
         
      
      17 –
         
         The latter are necessarily national authorities.
      
      18 –
         
         Communication of the customs debt consists, for the competent customs authorities, of notifying the debtor, in accordance
            with the procedures set out in the Code, of the amount of the duties to be paid (Article 221 of the Code).
         
      
      19 –
         
         Paragraphs 58 to 61 of this Opinion.
      
      20 –
         
         Article 239 of the Code states, it should be noted, that the competent customs authority may remit import duties (paragraph
            2) in circumstances in which there is no deception or obvious negligence attributable to the person concerned (paragraph 1,
            second indent). Article 905 of the implementing Regulation stipulates that, where the decision-making customs authority to
            which an application for remission under Article 239(2) of the Code has been submitted cannot take a decision and 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 that authority belongs shall transmit
            the case to the Commission to be settled under a specific procedure.
         
      
      21 –
         
         Case C-48/98  
             Firma Söhl & Söhlke   v  
             Hauptzollamt Bremen   [1999] ECR I-7877.
         
      
      22 –
         
         Ibid. (paragraph 52).
      
      23 –
         
         Ibid. (paragraph 55).
      
      24 –
         
         Ibid. (paragraph 56).
      
      25 –
         
         Ibid. (paragraph 57).
      
      26 –
         
         Ibid. (paragraph 59).
      
      27 –
         
         Case C-64/89  
             Hauptzollamt Gießen  v  
             Deutsche Fernsprecher  [1990] ECR I-2535, paragraph 17.
         
      
      28 –
         
         Ibid. (paragraph 18).
      
      29 –
         
         Ibid. (paragraphs 19 and 23).
      
      30 –
         
         . Söhl & Söhlke , cited above (paragraph 43).