1 BY ORDER DATED 20 MAY 1983 , WHICH WAS RECEIVED AT THE COURT ON 3 JUNE 1983 , THE COLLEGE VAN BEROEP VOOR HET BEDRIJFSLEVEN ( ADMINISTRATIVE COURT OF LAST INSTANCE IN MATTERS OF TRADE AND INDUSTRY ) REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE INTERPRETATION OF ARTICLE 59 OF REGULATION ( EEC ) NO 542/69 OF THE COUNCIL OF 18 MARCH 1969 ON COMMUNITY TRANSIT ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1969 ( I ), P . 125 ), WITH A VIEW TO OBTAINING CLARIFICATION REGARDING A CONFLICT BETWEEN THE COMMUNITY TRANSIT RULES AND THE BENELUX TRANSIT ARRANGEMENTS , TO WHICH ARTICLE 59 OF REGULATION NO 542/69 REFERS .
2 ACCORDING TO THE ORDER FOR REFERENCE , IN DECEMBER 1976 AND JANUARY 1977 THE PLAINTIFF IN THE MAIN ACTION , PAKVRIES BV , A LIMITED LIABILITY COMPANY WHOSE REGISTERED OFFICE IS AT ROTTERDAM , SUBMITTED , IN ITS CAPACITY AS CUSTOMS AGENT , TO THE COLLECTOR OF CUSTOMS AND EXCISE AT ROTTERDAM T 1 TRANSIT DOCUMENTS , AS PROVIDED FOR BY REGULATION NO 542/69 , COVERING THE TRANSPORT BY ROAD OF SIX CONSIGNMENTS OF BEEF ORIGINATING IN ARGENTINA , WITH ROTTERDAM AS THE OFFICE OF DEPARTURE AND MILAN AS THE OFFICE OF DESTINATION .
3 IT IS ESTABLISHED THAT THE ABOVEMENTIONED GOODS WERE NEVER PRODUCED AT THE OFFICE OF DESTINATION IN MILAN . AN INVESTIGATION CONDUCTED BY THE FISCALE INLICHTINGEN EN OPSPORINGSDIENST ( NETHERLANDS FISCAL INTELLIGENCE AND INVESTIGATION BRANCH ) REVEALED THAT THEY HAD BEEN PUT INTO FREE CIRCULATION IRREGULARLY IN BELGIUM AND THAT THE DOCUMENTS RETURNED TO THE COLLECTOR AT ROTTERDAM BORE FALSE INFORMATION AND FORGED ENDORSEMENTS .
4 THE COLLECTOR OF CUSTOMS AND EXCISE AT ROTTERDAM , APPLYING PROVISIONS OF LAW IN FORCE IN THE BENELUX ECONOMIC UNION , NAMELY THE CONVENTION OF 29 APRIL 1969 ON COOPERATION IN ADMINISTRATIVE AND CRIMINAL MATTERS IN THE CONTEXT OF THE ARRANGEMENTS FOR THE ATTAINMENT OF THE AIMS OF THE BENELUX ECONOMIC UNION AND , MORE PARTICULARLY , ARTICLE 5 ( 2 ) OF THE SUPPLEMENTARY PROTOCOL THERETO , CONTAINING SPECIAL PROVISIONS ON TAXATION ( TRACTATENBLAD VAN HET KONINKRIJK DER NEDERLANDEN ( COLLECTION OF TREATIES AND CONVENTIONS OF THE KINGDOM OF THE NETHERLANDS ) 1969 , NO 124 ), TOOK ACTION TO RECOVER AGRICULTURAL LEVIES FROM PAKVRIES AND SENT IT DEMANDS FOR PAYMENT AMOUNTING IN TOTAL TO HFL 695 945,30 .
5 THE PLAINTIFF CLAIMED THAT THE NETHERLANDS CUSTOMS OFFICE HAD NO AUTHORITY TO RECOVER THE LEVIES , RELYING ON ARTICLE 36 OF REGULATION NO 542/69 , OF WHICH PARAGRAPH ( 1 ) PROVIDES AS FOLLOWS : ' ' WHEN IT IS FOUND THAT , IN THE COURSE OF A COMMUNITY TRANSIT OPERATION , AN OFFENCE OR IRREGULARITY HAS BEEN COMMITTED IN A PARTICULAR MEMBER STATE , THE RECOVERY OF DUTIES OR OTHER CHARGES WHICH MAY BE CHARGEABLE SHALL BE EFFECTED BY THAT MEMBER STATE IN ACCORDANCE WITH ITS PROVISIONS LAID DOWN BY LAW , REGULATION OR ADMINISTRATIVE ACTION , WITHOUT PREJUDICE TO THE INSTITUTION OF CRIMINAL PROCEEDINGS . ' ' SINCE THE GOODS WERE PUT INTO FREE CIRCULATION IN BELGIUM , THE AUTHORITIES COMPETENT TO EFFECT RECOVERY ARE THEREFORE , IN PAKVRIES ' S VIEW , THE BELGIAN CUSTOMS AUTHORITIES .
6 THE NETHERLANDS AUTHORITIES , ON THE OTHER HAND , RELIED ON ARTICLE 59 OF THE REGULATION , WHICH IS WORDED AS FOLLOWS : ' ' IN DEROGATION FROM THIS REGULATION , BELGIUM , LUXEMBOURG AND THE NETHERLANDS MAY APPLY TO THE COMMUNITY TRANSIT DOCUMENTS THE AGREEMENTS CONCLUDED OR TO BE CONCLUDED BETWEEN THEM WITH A VIEW TO REDUCING OR ABOLISHING FRONTIER FORMALITIES AT THE BELGO-LUXEMBOURG AND BELGO-NETHERLANDS FRONTIERS . ' '
7 IN THEIR VIEW , DUTIES AND CHARGES WHICH HAVE BEEN EVADED MUST THEREFORE BE RECOVERED IN ACCORDANCE WITH THE PROVISIONS IN FORCE WITHIN THE BENELUX ECONOMIC UNION . THESE ARE LAID DOWN IN ARTICLE 5 OF THE SUPPLEMENTARY PROTOCOL TO THE BENELUX CONVENTION OF 29 APRIL 1969 . THAT ARTICLE PROVIDES AS FOLLOWS : ( 1 ) WHERE A DOCUMENT ISSUED OR VALIDATED FOR USE IN MORE THAN ONE COUNTRY IS NOT DISCHARGED OR ONLY INCOMPLETELY DISCHARGED , THE GOODS COVERED BY THAT DOCUMENT SHALL BE SUBJECT TO THE DUTIES , EXCISE AND OTHER CHARGES THAT ARE PAYABLE ON ACCOUNT OF THE FAILURE TO DISCHARGE OR COMPLETELY TO DISCHARGE A NATIONAL DOCUMENT OF THAT KIND IN THE COUNTRY FOR WHICH THE BENELUX DOCUMENT WAS ISSUED OR VALIDATED IN WHICH THE TOTAL AMOUNT OF THOSE CHARGES IS THE HIGHEST . ( 2)THE DUTIES , EXCISE AND OTHER CHARGES AS WELL AS ANY FINES DUE ON ACCOUNT OF THE NON-DISCHARGE OR INCOMPLETE DISCHARGE SHALL BE RECOVERED FOR ITS OWN ACCOUNT BY THE COUNTRY IN WHICH THE DOCUMENT WAS ISSUED OR VALIDATED . ( 3)IF IT IS ASCERTAINED IN WHICH COUNTRY THE GOODS HAVE BEEN PLACED IN THE SITUATION OF GOODS IN RESPECT OF WHICH THE RELEVANT DUES HAVE BEEN PAID , THOSE GOODS SHALL , IN DEROGATION FROM PARAGRAPH ( 1 ), BE SUBJECT TO THE DUTIES , EXCISE AND OTHER CHARGES APPLICABLE IN THAT COUNTRY . IF THE DOCUMENT WAS NOT ISSUED OR VALIDATED IN THAT COUNTRY , THE PROCEEDS OF THE UNCONSOLIDATED CHARGES SHALL , IN DEROGATION FROM PARAGRAPH ( 2 ), BE PAID TO THAT COUNTRY . THE NETHERLANDS AUTHORITIES TAKE THE VIEW THAT , ACCORDING TO THAT PROVISION , THEY ARE THEREFORE COMPETENT TO RECOVER THE LEVIES .
8 IN ORDER TO RESOLVE THE DISPUTE , THE COLLEGE VAN BEROEP SUBMITTED THE FOLLOWING QUESTION TO THE COURT FOR A PRELIMINARY RULING : MUST ARTICLE 59 OF REGULATION ( EEC ) NO 542/69 , AS WORDED AND IN FORCE BEFORE 1 JULY 1977 , BE INTERPRETED AS MEANING THAT THE NETHERLANDS MAY APPLY TO A COMMUNITY TRANSIT DOCUMENT A BENELUX AGREEMENT WHICH PROVIDES , IN DEROGATION FROM ARTICLE 36 ( 1 ) OF THAT REGULATION , THAT ACTION TO RECOVER CHARGES MUST BE TAKEN BY THE BENELUX COUNTRY IN WHICH THE DOCUMENT WAS ISSUED , EVEN IF IT IS FOUND THAT AN IRREGULARITY WAS COMMITTED IN THE COURSE OF COMMUNITY TRANSIT IN ANOTHER BENELUX COUNTRY?
9 THE PLAINTIFF IN THE MAIN PROCEEDINGS BELIEVES THAT ARTICLE 59 OF REGULATION NO 542/69 APPLIES ONLY TO INTERNAL BENELUX MATTERS . THE EXCEPTION PROVIDED FOR THEREIN CANNOT THEREFORE EXTEND TO A CASE IN WHICH GOODS ARE IN TRANSIT TO ANOTHER MEMBER STATE , IN THIS CASE ITALY . CONSEQUENTLY , THE RULE IN ARTICLE 36 OF THE REGULATION MUST BE APPLIED . SINCE THE GOODS WERE PUT INTO CIRCULATION IN BELGIUM , ONLY THE AUTHORITIES OF THAT STATE ARE AUTHORIZED TO RECOVER THE DUTIES AND OTHER CHARGES DUE , IN ACCORDANCE WITH THE APPLICABLE PROVISIONS LAID DOWN BY LAW , REGULATION OR ADMINISTRATIVE ACTION IN THAT STATE . IT IS CLEAR IN ANY CASE FROM THE VERY WORDING OF ARTICLE 59 THAT ITS EFFECT IS LIMITED TO ADMINISTRATIVE FORMALITIES AT INTRA-BENELUX FRONTIERS AND CANNOT BE EXTENDED TO SUBSTANTIVE RULES GOVERNING THE POWERS OF THE MEMBER STATES OR TO LEGISLATION APPLICABLE TO RECOVERY .
10 ON THE OTHER HAND , BOTH THE NETHERLANDS GOVERNMENT AND THE COMMISSION TAKE THE VIEW THAT , WHEN READ IN THE LIGHT OF ARTICLE 233 OF THE EEC TREATY , ARTICLE 59 OF REGULATION NO 542/69 MUST BE UNDERSTOOD AS RECOGNIZING THAT THE BENELUX TRANSIT RULES TAKE PRECEDENCE OVER THE COMMUNITY TRANSIT RULES , IRRESPECTIVE OF THE DESTINATION OF THE GOODS . IN THIS REGARD THE NETHERLANDS GOVERNMENT EMPHASIZES IN PARTICULAR TWO FACTS : FIRST , THAT CONTROLS AT INTRA-BENELUX FRONTIERS HAVE BEEN ABOLISHED AND , SECONDLY , THAT FORMALITIES HAVE BEEN SIMPLIFIED , WHICH HAS BEEN MADE POSSIBLE BY THE FACT THAT EACH BENELUX COUNTRY IS AUTHORIZED AND REQUIRED TO CARRY OUT CONTROLS AND RECOVER ANY TAXES FOUND TO BE DUE ON HALF OF THE OTHER BENELUX COUNTRIES . IT WOULD APPEAR ILLOGICAL TO DRAW A DISTINCTION BETWEEN PROVISIONS WHICH ARE , IN THE STRICT SENSE , INTENDED SOLELY TO MAKE ADMINISTRATIVE FORMALITIES AT INTRA-BENELUX FRONTIERS LESS BURDENSOME AND PROVISIONS GOVERNING COMPETENCE AND THE PROCEDURE FOR RECOVERING DUTIES AND CHARGES IN THE EVENT OF IRREGULARITIES .
11 ACCORDING TO ARTICLE 233 OF THE EEC TREATY , THE PROVISIONS OF COMMUNITY LAW ARE NOT TO PRECLUDE THE EXISTENCE OR COMPLETION OF THE UNION BETWEEN BELGIUM , LUXEMBOURG AND THE NETHERLANDS TO THE EXTENT TO WHICH THE OBJECTIVES OF THAT UNION ARE NOT ATTAINED BY APPLICATION OF THE TREATY . THE AIM OF THAT PROVISION IS TO PREVENT THE APPLICATION OF COMMUNITY LAW FROM CAUSING THE DISINTEGRATION OF THE REGIONAL UNION ESTABLISHED BETWEEN THOSE THREE MEMBER STATES OR FROM HINDERING ITS DEVELOPMENT . IT THEREFORE ENABLES THE THREE MEMBER STATES CONCERNED TO APPLY , IN DEROGATION FROM THE COMMUNITY RULES , THE RULES IN FORCE WITHIN THEIR UNION IN SO FAR AS IT IS FURTHER ADVANCED THAN THE COMMON MARKET .
12 THE QUESTION WHETHER IT IS JUSTIFIED TO APPLY THE BENELUX TRANSIT RULES INSTEAD OF THE COMMUNITY RULES MUST BE EXAMINED IN THE LIGHT OF THOSE CONSIDERATIONS .
13 UNDER TITLE II OF REGULATION NO 542/69 ( ARTICLE 12 ET SEQ .), THE COMMUNITY TRANSIT PROCEDURE INVOLVES THE COMPLETION , FOR ALL GOODS IN TRANSIT , OF A T 1 FORM CORRESPONDING TO THE SPECIMEN CONTAINED IN ANNEX A TO THE REGULATION . THAT DOCUMENT ACCOMPANIES THE GOODS TO THEIR DESTINATION AND A COPY IS RETURNED TO THE OFFICE OF DEPARTURE , WHICH ENABLES IT TO VERIFY WHETHER THE TRANSIT OPERATION WAS CARRIED OUT IN THE PROPER MANNER . ARTICLE 21 PROVIDES THAT THE COPIES OF THE T 1 DOCUMENT MUST BE PRODUCED AT EACH OFFICE OF TRANSIT AND ARTICLE 22 THAT THE CARRIER MUST GIVE EACH OFFICE OF TRANSIT A ' ' TRANSIT ADVICE NOTE ' ' CONFORMING TO THE MODEL SHOWN IN ANNEX E . IT SHOULD BE NOTED THAT THE T 1 DOCUMENT IS ALSO USED AS A TRANSIT DOCUMENT WITHIN THE BENELUX ECONOMIC UNION .
14 THE PROVISIONS OF ARTICLE 36 , CONCERNING THE ESTABLISHMENT OF OFFENCES OR IRREGULARITIES AND THE RECOVERY OF DUTIES OR OTHER CHARGES WHICH MAY BE CHARGEABLE IF IRREGULARITIES HAVE OCCURRED DURING TRANSIT , APPLY IN THE CONTEXT OF THAT PROCEDURE . THE ARTICLE CONTAINS A NUMBER OF ALTERNATIVE PROVISIONS DEPENDING ON WHETHER IT IS POSSIBLE TO DETERMINE THE PLACE WHERE THE OFFENCE OR IRREGULARITY WAS COMMITTED . IT IS CLEAR FROM THOSE PROVISIONS , AND IN PARTICULAR THOSE DEALING WITH THE CASE IN WHICH IT IS NOT POSSIBLE TO DETERMINE THE PLACE WHERE THE OFFENCE OR IRREGULARITY WAS COMMITTED , THAT THE DIVISION OF POWERS BETWEEN THE MEMBER STATES IS CLOSELY LINKED TO THE CUSTOMS CONTROLS CARRIED OUT AT THE FRONTIERS OF THOSE STATES AND TO THE COMPLETION OF TRANSIT ADVICE NOTES AT THOSE FRONTIERS .
15 IF THAT PROCEDURE IS EXAMINED , IT IS CLEAR THAT THE SCHEME OF ARTICLE 36 CANNOT FUNCTION IN THAT FORM WITHIN THE BENELUX ECONOMIC UNION , SINCE AS A RESULT OF THE PROVISIONS ADOPTED WITHIN THAT UNION CONTROLS AT THE FRONTIERS BETWEEN BELGIUM , LUXEMBOURG AND THE NETHERLANDS HAVE TO A LARGE EXTENT BEEN ABOLISHED . THEREFORE , THE CHECKS WHICH NEED TO BE MADE IN ORDER FOR THE TRANSIT ARRANGEMENTS LAID DOWN IN THE REGULATION TO OPERATE ARE NO LONGER POSSIBLE WITHIN THE TERRITORY OF THE BENELUX UNION .
16 IN VIEW OF THAT CIRCUMSTANCE ARTICLE ( 3 ) OF REGULATION NO 542/69 PROVIDES THAT THE TERRITORY OF THE BENELUX ECONOMIC UNION IS TO BE CONSIDERED THE TERRITORY OF ONE MEMBER STATE AND ARTICLE 59 ALLOWS THE AGREEMENTS CONCLUDED WITHIN THAT UNION WITH A VIEW TO REDUCING OR ABOLISHING FRONTIER FORMALITIES AT THE BELGO-LUXEMBOURG AND BELGO-NETHERLANDS FRONTIERS TO BE APPLIED TO COMMUNITY TRANSIT DOCUMENTS .
17 ARTICLE 59 OF REGULATION NO 542/69 MUST THEREFORE BE INTERPRETED AS ALLOWING THE RULES OF THE BENELUX UNION TO DEROGATE FROM ARTICLE 36 OF THAT REGULATION AS REGARDS THE DIVISION OF POWERS AND OTHER PROVISIONS CONCERNING THE RECOVERY OF DUTIES AND CHARGES DUE .
18 THE ANSWER TO THE QUESTION SUBMITTED BY THE COLLEGE VAN BEROEP MUST THEREFORE BE THAT ARTICLE 59 OF REGULATION NO 542/69 ON COMMUNITY TRANSIT , AS WORDED AND IN FORCE BEFORE 1 JULY 1977 , MUST BE INTERPRETED AS MEANING THAT THE NETHERLANDS MAY APPLY TO A COMMUNITY TRANSIT DOCUMENT A BENELUX AGREEMENT WHICH PROVIDES , IN DEROGATION FROM ARTICLE 36 ( 1 ) OF THAT REGULATION , THAT ACTION TO RECOVER CHARGES MUST BE TAKEN BY THE BENELUX COUNTRY IN WHICH THE DOCUMENT WAS ISSUED , EVEN IF IT IS FOUND THAT AN IRREGULARITY WAS COMMITTED IN THE COURSE OF COMMUNITY TRANSIT IN ANOTHER BENELUX COUNTRY .