1 By an order of 31 March 1995, received at the Court on 21 April 1995, the Hessisches Finanzgericht (Finance Court, Hesse), Kassel, referred to the Court for a preliminary ruling under Article 177 of the EC Treaty four questions concerning the interpretation of Article 244 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1, hereinafter `the Code').
2 The questions have been raised in proceedings between Bernd Giloy and the Hauptzollamt (Principal Customs Office) Frankfurt am Main-Ost concerning a demand for payment of a sum of DM 293 870.76 owed by way of turnover tax on imported goods (hereinafter `the contested demand').
3 The second paragraph of Article 244 of the Code provides that, where a decision taken by the customs authorities relating to the application of customs legislation is appealed against, the customs authorities must suspend the disputed decision in whole or in part `where they have good reason to believe that [it] is inconsistent with customs legislation or that irreparable damage is to be feared for the person concerned'.
4 The third paragraph of Article 244 provides: `Where the disputed decision has the effect of causing import duties or export duties to be charged, suspension of implementation of that decision shall be subject to the existence or lodging of a security. However, such security need not be required where such a requirement would be likely, owing to the debtor's circumstances, to cause serious economic or social difficulties.'
5 In the German version, the last sentence of that provision (`Diese Sicherheitsleistung darf jedoch nicht gefordert werden, wenn ...') has been amended in order to align it with the other language versions. The amended version now reads: `Diese Sicherheitsleistung braucht jedoch nicht gefordert zu werden, wenn ...'. A similar amendment has also been made to the Italian version (OJ 1996 L 97, p. 38, of the German and Italian versions).
6 Article 192(1) of the Code provides that, where customs legislation makes it compulsory for security to be provided, the customs authorities are to fix the amount of such security at a level equal to the precise amount of the customs debt in question or, if this cannot be established with certainty, at a level equal to the maximum amount of the customs debt which has been, or may be, incurred.
7 Article 192(2) provides that, where customs legislation provides that the provision of security is optional and the customs authorities require security to be provided, the amount of the security is to be fixed by those authorities so as not to exceed the level provided for in paragraph (1).
8 Article 9(1) of the Code provides: `A decision favourable to the person concerned shall be revoked or amended where, in cases other than those referred to in Article 8, one or more of the conditions laid down for its issue were not or are no longer fulfilled'.
9 Before the entry into force of the Code, Paragraphs 69(2) and (3) of the Finanzgerichtsordnung (Code of Practice of Fiscal Courts, hereinafter `the FGO') laid down the conditions for stay of execution of demands for payment issued by the tax authorities, including those concerning customs duties. According to German case-law and academic writing, those provisions, which are still in force, must be applied in accordance with Article 244 of the Code in all cases.
10 According to Paragraph 21(2) of the Umsatzsteuergesetz (Turnover Tax Law), the provisions on customs duties are to apply mutatis mutandis to turnover tax charged on imports. It follows that the provisions of Paragraphs 69(2) and (3) of the FGO are applicable to applications for stay of execution of demands for payment of turnover tax on imports.
11 On 28 March 1990, the defendant in the main proceedings issued the contested demand against Mr Giloy. Mr Giloy lodged an objection against the demand with the defendant customs office which dismissed it as unfounded on 17 September 1991. So, on 23 October 1991, Mr Giloy brought an action before the Hessisches Finanzgericht for annulment of the contested demand.
12 By decision of 16 August 1994 the Hauptzollamt Fulda, the principal authority in Hesse competent in matters of execution, took steps to enforce the contested demand by attachment of the applicant's employment earnings. The amount of the arrears of payment, including penalties for late payment, amounted on that date to DM 451 092.76. In view of the size of that debt, Mr Giloy was dismissed by his employer on 16 September 1994 and since then has been receiving social assistance.
13 The applicant has asked the Hessisches Finanzgericht to stay execution of the contested demand, pursuant to the combined provisions of Paragraphs 21(2) of the Umsatzsteuergesetz and 69(3) of the FGO. He contends that there are good reasons for doubting the legality of the demand. He also considers that his application must be upheld on the ground that attachment of his earnings has caused him to lose his employment, thereby inflicting irreparable damage. His former employer has assured him that he will be reinstated if the threat of execution of the contested demand is removed. Relying on the third paragraph of Article 244 of the Code, he also contends that, owing to his personal financial situation, he cannot be required to provide security if he is granted a stay of execution.
14 The Hauptzollamt, on the other hand, contends that there is no good reason to doubt the legality of the contested demand and that Mr Giloy will not suffer any irreparable damage as a result of its execution.
15 Taking the view that in the circumstances it was obliged to apply Article 244 of the Code, the national court decided to stay proceedings and to refer the following questions to the Court for a preliminary ruling: `1. Are the two conditions set out in the second paragraph of Article 244 of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1), namely - good reason to believe that the disputed decision is unlawful or - irreparable damage for the person concerned, completely independent of each other, so that suspension of the implementation of a decision is also to be granted where there is no good reason to believe that the payment order whose implementation is sought to be suspended is unlawful but irreparable damage is to be feared for the person concerned? If Question 1 is answered in the affirmative: 2. Does the presence of the condition mentioned in the second indent inevitably preclude a requirement to lodge security or is this subject to further conditions and, if so, which? 3. Does the danger of losing one's employment - which may possibly already have materialized on account of the claim for duty having become due - constitute "serious economic or social difficulties" even where the necessary minimum for subsistence is secured as a result of domestic legislation, for instance by social welfare? 4. In the event that suspension of implementation of the decision is granted, is security still to be lodged to the extent of the amount of the duty or does the possibility exist of limiting it to a partial amount having regard to the applicant's overall economic situation?' Jurisdiction of the Court
16 The Commission observes that, since the main proceedings concern the levying of turnover tax and not customs duties, the relevant provisions of the Code apply to this case only by virtue of domestic German law. According to its own terms, the Code is not applicable to turnover taxes levied on importation (see Article 4, point (10), of the Code). The Commission is therefore uncertain whether the Court has jurisdiction to rule on the questions submitted to it.
17 Nevertheless, it considers that the Court does have jurisdiction to give a ruling in this case. It relies, in particular, on the judgment in Joined Cases C-297/88 and C-197/89 Dzodzi ([1990] ECR I-3763, paragraph 37) and on the fact that the relevant provisions of the Code are applicable to the case before the national court, albeit only on the basis of domestic law.
18 In reply to certain questions on this point put to them by the Court, the applicant and the defendant in the main proceedings as well as the German Government took the same view as the Commission. It was pointed out by the German Government that German customs authorities are responsible for levying both customs duties and turnover taxes on imports. Furthermore, the two charges are normally determined once only, in a single demand for payment. Consequently, the procedures followed are identical, so that the relevant provisions should be interpreted uniformly. The procedures include those provided for in Article 244 of the Code in so far as domestic rules on the levying of customs duties must be in conformity herewith.
19 Under Article 177 of the Treaty the Court has jurisdiction to give preliminary rulings on the interpretation of the Treaty and of acts of the Community institutions.
20 According to settled case-law, the procedure provided for in Article 177 of the Treaty is a means of cooperation between the Court of Justice and national courts. It follows that it is for the national courts alone which are seised of the case and are responsible for the judgment to be delivered to determine, in view of the special features of each case, both the need for a preliminary ruling in order to enable them to give their judgment and the relevance of the questions which they put to the Court (see, in particular, the judgments in Dzodzi, cited above, paragraphs 33 and 34, and in Case C-231/89 Gmurzynska-Bscher [1990] ECR I-4003, paragraphs 18 and 19).
21 Consequently, where questions submitted by national courts concern the interpretation of a provision of Community law, the Court is, in principle, obliged to give a ruling (see Dzodzi and Gmurzynska-Bscher, cited above, paragraphs 35 and 20 respectively). Neither the wording of Article 177 nor the aim of the procedure established by that article indicates that the Treaty makers intended to exclude from the jurisdiction of the Court requests for a preliminary ruling on a Community provision where the domestic law of a Member State refers to that Community provision in order to determine the rules applicable to a situation which is purely internal to that State (see Dzodzi and Gmurzynska-Bscher, cited above, paragraphs 36 and 25 respectively).
22 A reference by a national court can be rejected only if it appears that the procedure laid down by Article 177 of the Treaty has been misused and a ruling from the Court elicited by means of a contrived dispute, or it is obvious that Community law cannot apply, either directly or indirectly, to the circumstances of the case referred to the Court (see, to this effect, Dzodzi and Gmurzynska-Bscher, cited above, paragraphs 40 and 23).
23 Applying that case-law, the Court has repeatedly held that it has jurisdiction to give preliminary rulings on questions concerning Community provisions in situations where the facts of the cases being considered by the national courts were outside the scope of Community law but where those provisions had been rendered applicable either by domestic law or merely by virtue of terms in a contract (see, as regards the application of Community law by domestic law, Dzodzi and Gmurzynska-Bscher, cited above; Case 166/84 Thomasdünger [1985] ECR 3001; Case C-384/89 Tomatis and Fulchiron [1991] ECR I-127 and, as regards the application of Community law by the effect of contractual provisions, Case C-88/91 Federconsorzi [1992] ECR I-4035 and Case C-73/89 Fournier [1992] ECR I-5621, all those cases being hereinafter referred to as `the Dzodzi line of cases'). In those cases, the provisions of domestic law and the relevant contractual terms, which incorporated Community provisions, clearly did not limit application of the latter.
24 On the other hand, in its judgment in Case C-346/93 Kleinwort Benson [1995] ECR I-615, the Court held that it had no jurisdiction to give a preliminary ruling on the Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters (OJ 1972 L 299, p. 32, hereinafter `the Convention').
25 In Kleinwort Benson, the Court observed, in paragraph 19, that, unlike the situation in the Dzodzi line of cases, the provisions of the Convention which the Court was asked to interpret had not been rendered applicable as such by the law of the contracting State concerned. In paragraph 16 of its judgment in Kleinwort Benson the Court pointed out that the Act of Parliament in question took the Convention only as a model and only partially reproduced its terms. It went on to note, in paragraph 18, that express provision was made in the Act for the authorities of the contracting State concerned to adopt modifications `designed to produce divergence' between provisions of the Act and the corresponding provisions of the Convention. Furthermore, the Act also made an express distinction between the provisions applicable to Community situations and those applicable to domestic situations. In the first case, in interpreting the relevant provisions of the Act, the national courts were bound by the case-law of the Court on the Convention, whereas in the second case they had only to take account of it, so that they could set it aside.
26 In the present case, nothing in the file suggests that the main proceedings will not be settled by application of rules of Community law.
27 Indeed, the file indicates that the provisions of domestic law in question apply without distinction to situations governed by domestic law and to situations governed by Community law, and sometimes to both simultaneously. In German domestic law, those provisions must be interpreted and applied uniformly, whether the applicable law is domestic law or Community law. For the purposes of their application to situations governed by Community law, the provisions in question are to be interpreted and applied in accordance with Article 244 of the Code. Consequently, German law requires that the domestic provisions in question should always be applied in accordance with that article.
28 In those circumstances, where, in regulating internal situations, domestic legislation adopts the same solutions as those adopted in Community law so as to provide for one single procedure in comparable situations, it is clearly in the Community interest that, in order to forestall future differences of interpretation, provisions or concepts taken from Community law should be interpreted uniformly, irrespective of the circumstances in which they are to apply (see, to this effect, the judgment in Dzodzi, cited above, paragraph 37).
29 It follows from all the foregoing that the Court has jurisdiction to rule on the questions submitted to it. The first question
30 In all the language versions of the second paragraph of Article 244 of the Code, the two conditions mentioned in this question are separated by the conjunction `or'. Although the word `or' may sometimes mark a conjunction between two parts of a sentence, it is indisputable in this case that it denotes a disjunction of those two conditions.
31 It therefore follows from the wording of the provision that the Community legislature intended that the two conditions concerned should constitute two quite separate reasons, each one alone justifying suspension of implementation of a disputed decision.
32 That interpretation is also borne out by the legislative history of the Code. In the proposal for a Council regulation establishing a Community Customs Code, submitted by the Commission to the Council on 21 March 1990, it was provided that the sole circumstance justifying suspension of implementation of a disputed decision should be where the customs authorities had good reason to believe that the decision was inconsistent with customs legislation [second paragraph of Article 243 of the proposal for a regulation (OJ 1990 C 128, p. 1)].
33 In its opinion on that proposal, the Economic and Social Committee stated, with regard to the second paragraph of Article 243 of the proposal for a regulation, that `it would also be a good idea to make provision for deferment in cases where undue hardship would otherwise result and where no overriding public interests are involved' (OJ 1991 C 60, p. 5, 11).
34 The Commission not having amended its proposal to that effect (OJ 1991 C 97, p. 11), the Council itself added to the second paragraph of Article 244 of the Code the phrase `... or that irreparable damage is to be feared for the person concerned' (see the second paragraph of Article 244 of the common position adopted by the Council on 14 May 1992 and notified in OJ 1992 C 149, p. 1).
35 As regards interpretation of the term `irreparable damage', guidance is provided by the interpretation of that term as a condition for the grant of an order suspending operation of an act under Article 185 of the Treaty [see, as regards the requirement of irreparable damage, the order of the Court of 19 July 1995 in Case C-149/95 P(R) Commission v Atlantic Container Line and Others [1995] ECR I-2165, paragraph 22].
36 According to the settled case-law of the Court, the condition of `irreparable damage' requires the judge hearing an application for interim measures to examine whether the possible annulment of the contested decision by the Court giving judgment in the main action would make it possible to reverse the situation that would have been brought about by its immediate implementation and conversely whether suspension of operation of that decision would be such as to prevent its being fully effective in the event of the main application being dismissed (see, to this effect, the order in Commission v Atlantic Container Line and Others, cited above, paragraph 50).
37 The Court has held that damage of a financial nature is, in principle, not considered to be serious and irreparable unless, in the event of the applicant's being successful in the main action, it could not be wholly recouped (see the order of the Court of Justice of 26 September 1988 in Case 229/88 R Cargill and Others v Commission [1988] ECR 5183, paragraph 17).
38 However, if immediate implementation of a contested measure may lead to the winding up of a company or require an individual to sell his flat, the condition concerning the existence of irreparable damage must, in those circumstances, be regarded as being satisfied (see the orders of the Court of First Instance of 15 June 1994 in Case T-88/94 R Socité Commericale des Potasses et de l'Azote et Entreprise Minière et Chimique v Commission [1994] ECR II-401, paragraph 33, and of 7 November 1995 in Case T-168/95 R Eridania and Others v Council [1995] ECR II-2817, paragraph 42; and the order of the Court of Justice of 3 July 1984 in Case 141/84 R De Compte v Parliament [1984] ECR 2575, paragraph 5).
39 It is not necessary, in this regard, for it to be established with absolute certainty that harm is imminent. It is sufficient that the harm in question, particularly when it depends on the occurrence of a number of factors, should be foreseeable with a sufficient degree of probability (see, to this effect, the order in Commission v Atlantic Container Line and Others, cited above, paragraph 38).
40 Finally, it should be observed that if, despite suspension of implementation under the second paragraph of Article 244 of the Code, the irreparable damage which justified suspension subsequently occurs for other reasons, the customs authorities may revoke it pursuant to Article 9(1) of the Code.
41 In the present case, the national file indicates that the alleged damage which the applicant would suffer in the event of immediate implementation of the disputed decision is continued unemployment. However, the material on file does not indicate whether, if he were successful in the main proceedings and even if the employer re-engaged him, he would be entitled to recoup his lost earnings from the customs authorities. Moreover, it cannot be excluded that, if the disputed decision were to be implemented immediately, the applicant might suffer other possibly irreparable damage, such as that arising from a procedure for attaching his assets and distributing them amongst his creditors.
42 It is therefore for the national court to determine, in the light of all the relevant circumstances of the case before it, whether irreparable damage, in the sense indicated, might be suffered by the applicant if the disputed decision were to be implemented.
43 In view of the foregoing, the reply to be given to the first question must be that, on a proper construction of the second paragraph of Article 244 of the Code, the customs authorities should suspend implementation of a disputed customs decision in whole or in part where one only of the two conditions mentioned in that provision is fulfilled, so that suspension must be granted where there is a risk of irreparable damage for the person concerned. It is not necessary that there be reason to believe that the disputed decision is inconsistent with customs legislation. The second question
44 By this question, the national court asks whether the fact that irreparable damage may be suffered by the person concerned in the event of immediate implementation of the disputed decision necessarily prevents the customs authorities from making suspension of execution subject to provision of security.
45 Under the second paragraph of Article 244 of the Code, the condition relating to the risk of irreparable damage is a ground justifying suspension of implementation of a disputed decision. However, that condition is not relevant as regards the necessity of providing security.
46 It is clear from the first sentence of the third paragraph of Article 244 of the Code that suspension of implementation of a disputed decision must, as a general rule, be subject to the lodging of security, even where suspension is granted on the ground that irreparable damage may be suffered by the person concerned.
47 The only exception to that rule is the case, mentioned in the second sentence of the third paragraph of Article 244 of the Code, in which the requirement to lodge security would be likely, owing to the debtor's circumstances, to cause serious economic or social difficulties.
48 If such difficulties exist, the customs authorities are free to decide whether it is appropriate to make suspension of implementation subject to the lodging of security. Even though the German version of the second sentence of the third paragraph of Article 244 of the Code that was applicable at the time of the facts in question is the one in force before the 1996 amendment, it is clear from the wording of all the other language versions of the provision then in force - with the exception of the Italian - that, in such circumstances, the customs authorities are always entitled to make suspension of implementation conditional upon the lodging of security.
49 Consequently, the answer to the second question must be that the fact that irreparable damage may be suffered by the person concerned in the event of immediate implementation of a disputed customs decision does not prevent the customs authorities from making suspension of its implementation conditional upon the lodging of security. However, if the requirement to lodge security is likely, owing to the debtor's circumstances, to cause serious economic or social difficulties, the customs authorities are free to decide not to require such security to be lodged. The third question
50 By this question the German court seeks in effect to ascertain whether the making suspension of implementation of a disputed customs decision conditional upon the lodging of security is such as to `cause serious economic or social difficulties' for a debtor who is unemployed and has been receiving social assistance since dismissal from his previous job.
51 In determining whether requiring a debtor to lodge security would be likely to cause him such difficulties, the customs authorities must take account of all the person's circumstances, in particular those concerning his financial situation.
52 It appears from the national file that the applicant is unemployed and that he has been receiving social assistance since the time of his dismissal from his previous job. He was dismissed from his job before he applied for suspension of implementation of the customs decision which he is disputing. It also appears that the applicant told the national court that, owing to his financial situation, he is not in a position to lodge security. However, the national court does not state whether this is indeed the case.
53 It is, however, sufficient to hold that to require a debtor, who does not have sufficient means, to lodge security would cause him `serious economic difficulties'. Under the Code, where the debtor cannot provide security, the customs authorities are entitled not to make suspension of implementation of a disputed decision subject to provision of security.
54 The answer to the third question must therefore be that making suspension of implementation of a disputed customs decision subject to the lodging of security would be likely to `cause serious economic or social difficulties' for a debtor who does not have sufficient means to provide such a security. The fourth question
55 By this question, the national court asks in effect whether, if suspension of implementation of a disputed customs decision is made subject to the lodging of security, the amount of the security must be set at the amount of the debt in question or whether, in taking into account the debtor's financial situation, that amount may be limited to part of the total amount of the debt.
56 It should be borne in mind in this regard that Article 192 of the Code makes a distinction between the amount of a security whose provision is compulsory and the amount of a security whose provision is optional.
57 Paragraph (1) of that article requires the amount of a compulsory security to be equal to the precise amount of a debt or, if that amount cannot be established with certainty, to the maximum amount of the debt which has been, or may be, incurred.
58 However, where provision of security is optional, paragraph (2) of that provision does not prescribe a minimum limit for the amount of the security. On the contrary, it provides only that the amount of such security may not exceed a maximum amount, namely that referred to in paragraph (1) of the article.
59 It follows that, where provision of security is optional, the amount of security may be set at an amount lower than that of the debt or, if that amount cannot be established with certainty, at the maximum amount of the debt which has been, or may be, incurred. In fixing an appropriate amount for such security the customs authorities must take account of all the relevant circumstances, including the debtor's financial situation.
60 As the Court has already pointed out in paragraph 46 above, the third paragraph of Article 244 of the Code requires, as a general rule, compulsory provision of a security. Consequently, the amount of the security must normally be fixed at the precise amount of the debt, or if this cannot be established with certainty, at the maximum amount of the debt which has been, or may be, incurred.
61 However, where the requirement to provide security is likely, owing to the debtor's circumstances, to cause serious economic or social difficulties, the customs authorities may, under the second sentence of that provision, waive the requirement for provision of such a security (see paragraphs 47 and 48 above).
62 In so far as the present case concerns optional provision of security, its amount may be set, taking into account all the relevant circumstances, including the debtor's financial situation, at any amount which does not exceed the total amount of the debt or, if this cannot be established with certainty, at the maximum amount of the debt which has been, or may be, incurred.
63 The answer to the fourth question must therefore be that, where suspension of implementation of a disputed customs decision is subject, under the third paragraph of Article 244 of the Code, to the lodging of security, the amount of that security must be set at the precise amount of the debt or, if this cannot be established with certainty, at the maximum amount of the debt which has been, or may be, incurred, unless the requirement to provide security is likely to cause the debtor serious economic or social difficulties; if that is the case, the amount of security may be set, taking into account the debtor's financial situation, at an amount less than the total amount of the debt concerned.