1 This request for a preliminary ruling concerns the interpretation of Article 30(2)(b) and (c) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code ( OJ 1992 L 302, p. 1 ), as amended by Regulation (EC) No 82/97 of the European Parliament and of the Council of 19 December 1996 ( OJ 1997 L 17, p. 1 ) (‘the Customs Code’), and of Article 151(4) and Article 152(1)(b) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92 ( OJ 1993 L 253, p. 1 ; ‘the Implementing Regulation’).
2 The request has been made in proceedings between ‘Oribalt Rīga’ SIA, formerly ‘Oriola Rīga’ SIA, and the Valsts ieņēmumu dienests (Latvian revenue authority) regarding a decision of the Director-General of that authority which required that company to make payment to the State Treasury of additional value added tax (VAT), interest on late payment and a fine. Legal context The Customs Code
3 Under Article 29(1) of the Customs Code: ‘The customs value of imported goods shall be the transaction value, that is, the price actually paid or payable for the goods when sold for export to the customs territory of the Community, adjusted, where necessary, in accordance with Articles 32 and 33 …’
4 Article 30 of that code provides: ‘1. Where the customs value cannot be determined under Article 29, it is to be determined by proceeding sequentially through subparagraphs (a), (b), (c) and (d) of paragraph 2 to the first subparagraph under which it can be determined, subject to the proviso that the order of application of subparagraphs (c) and (d) shall be reversed if the declarant so requests; it is only when such value cannot be determined under a particular subparagraph that the provisions of the next subparagraph in a sequence established by virtue of this paragraph can be applied. 2. The customs value as determined under this Article shall be: (a) the transaction value of identical goods sold for export to the Community and exported at or about the same time as the goods being valued; (b) the transaction value of similar goods sold for export to the Community and exported at or about the same time as the goods being valued; (c) the value based on the unit price at which the imported goods [or] identical or similar imported goods are sold within the Community in the greatest aggregate quantity to persons not related to the sellers; (d) the computed value, consisting of the sum of: - the cost or value of materials and fabrication or other processing employed in producing the imported goods, - an amount for profit and general expenses equal to that usually reflected in sales of goods of the same class or kind as the goods being valued which are made by producers in the country of exportation for export to the Community, - the cost or value of the items referred to in Article 32(1)(e). …’
5 Article 31 of that code provides: ‘1. Where the customs value of imported goods cannot be determined under Articles 29 or 30, it shall be determined, on the basis of data available in the Community, using reasonable means consistent with the principles and general provisions of: - the agreement on implementation of Article VII of the General Agreement on Tariffs and Trade of 1994, - Article VII of the General Agreement on Tariffs and Trade of 1994, - the provisions of this chapter. …’ The Implementing Regulation
6 Article 142(1) of the Implementing Regulation provides: ‘For the purposes of this title: … (d) “similar goods” means goods produced in the same country which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable; the quality of the goods, their reputation and the existence of a trademark are among the factors to be considered in determining whether goods are similar; …’
7 Under Article 151 of that regulation: ‘1. In applying Article 30(2)(b) of the [Customs] Code (the transaction value of similar goods), the customs value shall be determined by reference to the transaction value of similar goods in a sale at the same commercial level and in substantially the same quantity as the goods being valued. Where no such sale is found, the transaction value of similar goods sold at a different commercial level and/or in different quantities, adjusted to take account of differences attributable to commercial level and/or to quantity, shall be used, provided that such adjustments can be made on the basis of demonstrated evidence which clearly establishes the reasonableness and accuracy of the adjustment, whether the adjustment leads to an increase or a decrease in the value. … 4. In applying this Article, a transaction value for goods produced by a different person shall be taken into account only when no transaction value can be found under paragraph 1 for similar goods produced by the same person as the goods being valued. …’
8 Article 152 of that regulation provides: ‘1. (a) If the imported goods or identical or similar imported goods are sold in the Community in the condition as imported, the customs value of imported goods, determined in accordance with Article 30(2)(c) of the [Customs] Code, shall be based on the unit price at which the imported goods or identical or similar imported goods are so sold in the greatest aggregate quantity, at or about the time of the importation of the goods being valued, to persons who are not related to the persons from whom they buy such goods, subject to deductions for the following: (i) either the commissions usually paid or agreed to be paid or the additions usually made for profit and general expenses (including the direct and indirect costs of marketing the goods in question) in connection with sales in the Community of imported goods of the same class or kind; (ii) the usual costs of transport and insurance and associated costs incurred within the Community; (iii) the import duties and other charges payable in the Community by reason of the importation or sale of the goods. (b) If neither the imported goods nor identical nor similar imported goods are sold at or about the time of importation of the goods being valued, the customs value of imported goods determined under this Article shall, subject otherwise to the provisions of paragraph 1(a), be based on the unit price at which the imported goods or identical or similar imported goods are sold in the Community in the condition as imported at the earliest date after the importation of the goods being valued but before the expiration of 90 days after such importation. … 5. For the purposes of paragraph 1(b), the “earliest date” shall be the date by which sales of the imported goods or of identical or similar imported goods are made in sufficient quantity to establish the unit price.’
9 Annex 23 to the Implementing Regulation, headed ‘Interpretative Notes on Customs Value’, provides, with regard to the interpretation of Article 31(1) of the Customs Code, that ‘the methods of valuation to be employed under [that provision] should be those laid down in Articles 29 and 30(2) [of that code], but a reasonable flexibility in the application of such methods would be in conformity with the aims and provisions of Article 31(1) [of that code]’. To that effect, that annex provides some examples of ‘reasonable flexibility’. Thus, with regard to the application of the deductive method, that annex indicates that ‘the “90 days” requirement [laid down in Article 152(1)(b) of the Implementing Regulation] could be administered flexibly’. The dispute in the main proceedings and the questions referred for a preliminary ruling
10 In 2005, the applicant in the main proceedings, Oribalt Rīga, and the Indian company Ranbaxy Laboratories Ltd concluded a consignment contract under which Ranbaxy Laboratories appointed Oribalt Rīga as the exclusive supplier of consignment storage services in Latvia, Lithuania and Estonia for the generic medicines imported by Ranbaxy Laboratories (‘the medicinal products at issue’) and made it responsible for declaring those products for release for free circulation. Oribalt Rīga undertook to provide sufficient warehousing space and handling services to fulfil the orders of Ranbaxy Laboratories’ customers but did not acquire ownership of the medicinal products at issue.
11 When Oribalt Rīga placed the medicinal products at issue under the customs procedure, it made customs declarations in terms of which it designated itself as both the recipient of those medicinal products and the declarant.
12 The customs value of the medicinal products at issue was calculated by Oribalt Rīga using the ‘transaction value’ method, laid down in Article 29(1) of the Customs Code. That transaction value was determined by means of pro forma invoices prepared by Ranbaxy Laboratories, submitted to the customs office, containing information on the type of goods imported, the unit market price at the time of that invoicing and the total price.
13 Ranbaxy Laboratories determined to whom the medicinal products at issue would be sold, the terms of sale, the sale price and the price discounts applicable. When it processed orders, Oribalt Rīga issued invoices at the sale price set by Ranbaxy Laboratories.
14 Oribalt Rīga, which stored the medicinal products at issue in its warehouse, was required to prioritise the sale of the medicinal products at issue with the shortest expiry dates. Thus, several months could pass between the importation of those medicinal products and their sale to end customers, so that their value at the time of sale could differ from their market value at the time of their importation. The sale price of the medicinal products at issue could also be affected by the discounts granted by Ranbaxy Laboratories to its customers. After the sale of the medicinal products at issue, Ranbaxy Laboratories therefore issued new invoices to Oribalt Rīga, on the basis of which Oribalt Rīga paid Ranbaxy Laboratories for the imported goods, intended to be released for free circulation in the territory of the European Union. Oribalt Rīga received commission for its role as intermediary.
15 From 20 October 2010 to 10 January 2011, the Muitas audita pārvalde (Customs Inspection Service, Latvia) carried out an inspection of the calculation, payment and accounting records of the customs duties and other taxes administered by the customs services due by Oribalt Rīga for the period from 1 February 2008 to 31 August 2010.
16 By decision of 20 May 2011, the Latvian revenue authority rejected the customs value of the medicinal products at issue imported during that period, as determined by Oribalt Rīga using the transaction value method. According to that decision, the value of the imported goods should have been determined by applying the deductive method, laid down in Article 30(2)(c) of the Customs Code, taking as a starting point the price of the medicinal products at issue appearing on the invoices sent to Ranbaxy Laboratories’ customers, but not taking account of the discounts applied. The Director-General of the Latvian revenue authority thus imposed additional VAT, interest on late payment and a fine on Oribalt Rīga.
17 Following the dismissal of its action against the decision of the Latvian revenue authority by the Administratīvā rajona tiesa (District Administrative Court, Latvia), Oribalt Rīga brought an appeal before the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia) maintaining that that authority should and could obtain the information necessary to be able to determine the customs value of the goods using the first available methods of determination and that, if that authority applied the deductive method set out in Article 30(2)(c) of the Customs Code, it should have used information relating to the resale of those goods or identical goods at a date as close as possible to the date of the importation of those goods, but not exceeding the time limit of 90 days laid down in Article 152(1)(b) of the Implementing Regulation. Finally, it argued that the basis for the calculation of the customs value was the actual sale price of the medicinal products at issue, so that account should be taken of the discount granted to Ranbaxy Laboratories’ customers.
18 The Administratīvā apgabaltiesa (Regional Administrative Court) having upheld the decision of the Latvian revenue authority, Oribalt Rīga brought an appeal on a point of law before the referring court, the Augstākā tiesa (Supreme Court, Latvia).
19 That court takes the view that the solution to the case before it depends on the interpretation by the Court of Article 30 of the Customs Code and Articles 151 and 152 of the Implementing Regulation. In those circumstances, the Augstākā tiesa (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling: ‘(1) Where the imported goods are medicines, when the customs value of the imported goods is determined in accordance with Article 30(2)(b) of [the Customs Code] and Article 151(4) of [the Implementing Regulation], must it be considered that “similar goods” are those medicines whose active ingredient and the quantity thereof are the same (or similar) or, rather, in order to identify similar goods, must account be taken of market position as well, that is to say the popularity and demand, of the imported medicine in question and of its producer? (2) When the customs value of the imported goods is determined in accordance with Article 30(2)(c) of [the Customs Code], may the period of 90 days fixed in Article 152(1)(b) of [the Implementing Regulation] be applied flexibly? (3) If that period may be applied flexibly, to which data must priority be given in the present case? Should it be to data on transactions effected closer to the time when the goods to be valued were imported and involving identical or similar goods that are sold in sufficient quantities to enable the unit price to be determined or, on the contrary, to transactions less close in time but actually involving the imported goods? (4) When the customs value of the imported goods is determined in accordance with Article 30(2)(c) of [the Customs Code], should the discounts granted, which determined the price at which the goods were in fact sold, be applied?’ Consideration of the questions referred First question
20 By its first question, the referring court asks, in essence, which factors are to be taken into account in order to identify ‘similar goods’ when the customs value of the imported goods, such as the medicinal products at issue, is calculated by applying the deductive method laid down in Article 30(2)(b) of the Customs Code.
21 The referring court asks that question in order to establish whether, to identify such goods, account should be taken only of the composition of the medicinal products to be compared or also of circumstances related to the position of those medicinal products and their producers in the pharmaceutical market concerned.
22 First, it should be recalled that the objective of EU law on customs valuation is to introduce a fair, uniform and neutral system excluding the use of arbitrary or fictitious customs values. The customs value must thus reflect the real economic value of an imported good and take into account all of the elements of that good that have economic value (judgment of 20 December 2017, Hamamatsu Photonics Deutschland, C‑529/16 , EU:C:2017:984 , paragraph
23 Next, whilst, as a general rule, the price actually paid or payable for the goods forms the basis for calculating the customs value, that price is a factor that potentially must be adjusted where necessary in order to avoid the setting of an arbitrary or fictitious customs value (judgment of 20 December 2017, Hamamatsu Photonics Deutschland, C‑529/16 , EU:C:2017:984 , paragraph
24 However, where the customs value cannot be determined by the transaction value of the imported goods in accordance with Article 29 of the Customs Code, the customs valuation is to be carried out in accordance with the provisions of Article 30 of that code by applying sequentially the methods laid down in subparagraphs (a) to (d) of paragraph 2 of that article (judgment of 16 June 2016, EURO 2004. Hungary, C‑291/15 , EU:C:2016:455 , paragraph
25 As regards the application of the abovementioned Article 30, it follows from point 1 of the notes to Article 30(2)(b) of the Customs Code, set out in Annex 23 to the Implementing Regulation, that the customs authorities are, where possible, to use a sale of similar goods, at the same commercial level and in substantially the same quantity as the goods being valued (see, to that effect, judgment of 16 June 2016, EURO 2004. Hungary, C‑291/15 , EU:C:2016:455 , paragraph
26 Finally, the concept of ‘similar goods’, which appears in Article 30(2)(b), is defined in Article 142(1)(d) of the Implementing Regulation as being goods produced in the same country which, although not alike in all respects, have like characteristics and like component materials which enable them to perform the same functions and to be commercially interchangeable. That provision adds that the quality of the goods, their reputation and the existence of a trademark are among the factors to be considered in determining whether goods are similar.
27 In view of the broad definition of the concept of ‘similar goods’, which, as the Advocate General pointed out in point 40 of his Opinion, is based on a detailed assessment of the goods on the basis of a series of factors presented by way of example, it must be found that such a concept is applicable to all types of goods, including medicinal products, such as the medicinal products at issue. Thus, in order to identify similar goods, the competent national customs authority must be in a position to use all of the information available to it in order to establish the customs value in the most precise and realistic as possible manner.
28 In the case of generic medicines, it is necessary, as the Advocate General emphasised in points 50 and 51 of his Opinion, to take into account any relevant factor, such as the composition of those medicinal products, their substitutability in the light of their effects and their commercial interchangeability. Thus, the competent national customs authority must conduct a factual assessment, taking into account any factor that may have an impact on the real economic value of those medicinal products, including the market position of the imported medicinal product and of its manufacturer.
29 In the light of the foregoing, the answer to the first question is that Article 30(2)(b) of the Customs Code must be interpreted as meaning that when the customs value of goods, such as the medicinal products at issue, is calculated by applying the deductive method laid down in that provision, the competent national customs authority must, in order to identify ‘similar goods’, take into consideration any relevant factor, such as the composition of those goods, their substitutability in the light of their effects and their commercial interchangeability, thus conducting a factual assessment which takes into account any factor that may have an impact on the real economic value of those goods, including the market position of the imported goods and of their manufacturer. Second and third questions
30 By its second and third questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 152(1)(b) of the Implementing Regulation must be interpreted as meaning that, in order to determine the unit price of imported goods using the method laid down in Article 30(2)(c) of the Customs Code, the time limit of 90 days within which the imported goods must be sold in the European Union, laid down in Article 152(1)(b), is a mandatory time limit and, if it is not, which data are to be given priority in order to determine the unit price of the imported goods.
31 It should be recalled that Article 152(1)(a) of the Implementing Regulation sets down the principle that, in order to determine the unit price of imported goods or of identical or similar imported goods, sold in the European Union in the condition in which they were imported, with a view to determining the customs value of the imported goods referred to in Article 30(2)(c) of the Customs Code, reliance must be placed on the unit price at which the imported goods or identical or similar imported goods are so sold in the greatest aggregate quantity, at or about the time of the importation of the goods being valued, to persons who are not related to the persons from whom they buy such goods, subject to deductions for the factors referred to in Article 152(1)(a)(i) to (iii) of that regulation.
32 By way of exception to that principle, Article 152(1)(b) of that regulation provides that, in cases where neither the imported goods nor identical nor similar imported goods are sold at or about the time of importation of the goods being valued, the customs value of the imported goods shall be based on the unit price at which those goods or identical or similar imported goods are sold in the European Union in the condition in which they were imported at the earliest date after the importation of the goods being valued but before the expiration of 90 days after such importation.
33 Thus, in order to determine the most precise and realistic customs value, in accordance with the method laid down in Article 30(2)(c) of the Customs Code, the customs value of the goods must be determined at the time closest to their importation. The time limit of 90 days laid down in Article 152(1)(b) of the Implementing Regulation therefore constitutes an exception to the principle set down in Article 152(1)(a) of that regulation and must, on that basis, be interpreted strictly.
34 The wording of that provision supports that interpretation. According to that wording, the unit price which must be relied on is that at which the goods are sold at the earliest date after the importation of the goods being valued but before the expiration of 90 days after such importation, that is at a date which does not exceed that time limit.
35 In addition, it is apparent from the overall scheme of Article 30 of the Customs Code that there is a hierarchy of methods for determining the customs value. Thus, if the customs value of imported goods cannot be determined by applying the method referred to in Article 30(2)(c) of that code, that is to say if it is not possible to determine the price of identical or similar imported goods sold in the European Union within a time limit of 90 days following such importation, it is necessary, in accordance with that hierarchy, to apply the valuation method laid down in Article 30(2)(d) of that code.
36 Moreover, as the Advocate General pointed out in point 54 of his Opinion, whilst the referring court makes reference to the interpretative notes appearing in Annex 23 to the Implementing Regulation, which indicate that the time limit of 90 days referred to in Article 152(1)(b) of that regulation could be applied flexibly, it should be noted that such adaptability is envisaged only where Article 31(1) of the Customs Code is being applied.
37 However, the method for determining the customs value referred to in Article 31 of the Customs Code appears in last place in the hierarchy of valuation methods laid down by that code, by way of a residual method. As such, that method may be used only where it has not been possible to determine the customs value of the imported goods on the basis of Articles 29 or 30 of that code.
38 Thus, it is only where it is not possible to assess the customs value of imported goods by applying Articles 29 or 30 of the Customs Code that some of the rules relating to the methods for assessing the customs value laid down in Articles 29 or 30 of the Customs Code may be applied flexibly under Article 31 of that code.
39 Consequently, Article 152(1)(b) of the Implementing Regulation must be interpreted as meaning that, in order to determine the unit price of imported goods using the method laid down in Article 30(2)(c) of the Customs Code, the time limit of 90 days within which the imported goods must be sold in the European Union, referred to in Article 152(1)(b) of the Implementing Regulation, is a mandatory time limit. Fourth question
40 By its fourth question, the referring court asks, in essence, whether Article 30(2)(c) of the Customs Code must be interpreted as meaning that reductions in the sale price of imported goods must be taken into account in order to determine the customs value of those goods pursuant to that provision.
41 That provision provides that the customs value of imported goods shall be determined on the basis of the unit price at which the imported goods or identical or similar imported goods are sold within the European Union in the greatest aggregate quantity to persons not related to the sellers.
42 In addition, Article 152(1)(a)(i) to (iii) of the Implementing Regulation provides that certain deductions shall be taken into account, including certain commissions, the usual costs of transport and insurance and import duties. Trade discounts granted by the seller are not mentioned in that article. However, it is apparent from the wording of that provision that that list of deductions is exhaustive.
43 Moreover, by taking into account the unit price of the greatest quantity of imported goods, Article 30(2)(c) of the Customs Code already provides that certain quantity-related reductions shall be taken into account.
44 Finally, taking into account trade discounts in determining the customs value could result in a customs value which is even further from the real economic value of the imported goods subject to such a valuation.
45 It follows from those considerations that the answer to the fourth question is that Article 30(2)(c) of the Customs Code must be interpreted as meaning that reductions in the sale price of imported goods cannot be taken into account in determining the customs value of those goods pursuant to that provision. Costs
46 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 (Fifth Chamber) hereby rules: 1. Article 30(2)(b) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code, as amended by Regulation (EC) No 82/97 of the European Parliament and of the Council of 19 December 1996, must be interpreted as meaning that when the customs value of goods, such as the medicinal products at issue in the main proceedings, is calculated by applying the deductive method laid down in that provision, the competent national customs authority must, in order to identify ‘similar goods’, take into consideration any relevant factor, such as the respective compositions of those goods, their substitutability in the light of their effects and their commercial interchangeability, thus conducting a factual assessment which takes into account any factor that may have an impact on the real economic value of those goods, including the market position of the imported goods and of their manufacturer. 2. Article 152(1)(b) of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementation of Regulation No 2913/92 must be interpreted as meaning that, in order to determine the unit price of imported goods using the method laid down in Article 30(2)(c) of Regulation No 2913/92, as amended by Regulation No 82/97, the time limit of 90 days within which the imported goods must be sold in the European Union, referred to in Article 152(1)(b) of Regulation No 2454/93, is a mandatory time limit. 3. Article 30(2)(c) of Regulation No 2913/92, as amended by Regulation No 82/97, must be interpreted as meaning that reductions in the sale price of imported goods cannot be taken into account in determining the customs value of those goods pursuant to that provision. [Signatures] ( *1 )\tLanguage of the case: Latvian.