JUDGMENT OF 17. 5. 1983 — CASE 133/82 COMMISSION v LUXEMBOURG

In Case 133/82

THE COURT composed of: J. Mertens de Wilmars, President, P. Pescatore and U. Everling (Presidents of Chambers), Lord Mackenzie Stuart, O. Due, K. Bahlmann and Y. Galmot, Judges, Advocate General: G. F. Mancini Registrar: P. Heim

gives the following

JUDGMENT

Facts and Issues

The facts of the case, the course of the procedure and the conclusions, submissions and arguments of the parties may be summarized as follows :

I — Facts and procedure

Customs formalities for goods which originate in a Member State or which are in free circulation and which are imported into Luxembourg are completed either at the frontier or within the country.

In the first case, no financial charge is payable; in the second, when goods are presented for customs clearance at the special store of a public warehouse, a fee, which is fixed and levied by the municipal authorities, is payable in consideration of the use by the importers of the premises which are made available to them.

The Ministerial Regulations of 21 April 1978 (Mémorial [Luxembourg Official Gazette] 1978, p. 508) and of 2 July 1979 (Mémorial 1979, p. 1189) publish in Luxembourg the Belgian Law of 20 February 1978 and the Belgian Royal Decree of 29 January 1979 respectively, on customs warehouses and temporary storage.

Pursuant to Article 25 of the Belgian Law of 20 February 1978, on customs warehouses and temporary storage, the only part played by the State is to fix the maximum rate of storage charges and to lay down rules for the method of the collection thereof.

The Royal Decree of 29 January 1979 on customs warehouses and temporary storage provides that storage charges may not exceed 5.50 francs per package or per 100 kg gross weight of goods unloaded in the store, 3.50 francs per package or per 100 kg gross weight of goods unloaded outside the store (loading bay or yard) and 13 francs per 1000 kg gross weight when (with the authorization of the customs authorities) the goods are not unloaded, subject to a maximum of 130 francs per truck, lorry or trailer.

The Commission took the view that such storage charges constituted charges having an effect equivalent to customs duties, the imposition of which is prohibited under Article 9 et seq. of the Treaty. Therefore, by letter of 16 February 1981, it initiated against Luxembourg the procedure provided for in Article 169 of the Treaty. In that letter, the Commission stated that according to the established case-law of the Court, in particular the judgments of 1 July 1969, Case 24/68 Commission v Italian Republic [1969] ECR 193, and Joined Cases 2 and 3/69 Sociaal Fonds voor de Diamantarbeiders [1969] ECR 211, the disputed charges could not be regarded as the consideration for services, actually and individually rendered, from which importers might be said to obtain a specific advantage. The Commission requested the Luxembourg Government to provide it with its observations within a period of two months.

By letter dated 17 June 1981, the Permanent Representation of the Grand Duchy of Luxembourg stated that the Luxembourg Government wished to associate itself with the view advanced by the Belgian Government in the identical proceedings instituted against the Kingdom of Belgium, to the effect that the opportunity of using special stores represented an actual and individual benefit for the importer as is confirmed by the fact that the interested party may choose between a customs clearance procedure at the frontier, which is free of charge, and - the completion of customs formalities within the country, in which case special storage charges are payable.

On 8 December 1981, the Commission issued the reasoned opinion provided for in the first paragraph of Article 169 of the Treaty. That opinion, which was drawn up in terms similar to those employed in the reasoned opinion addressed on 12 March 1981 to the Belgian Government, declares that, by levying storage charges on goods which originate in a Member State or are in free circulation and which are imported into Luxembourg and submitted for the completion of customs formalities at a special store, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Article 9 of the EEC Treaty.

The reasoned opinion was communicated to the Government of the Grand Duchy of Luxembourg on 14 December 1981. It requested the Government to comply with its provisions within a period of one month.

As the Government of the Grand Duchy of Luxembourg did not reply to the Commission's reasoned opinion, on 23 April 1982 the Commission brought this action, which was registered at the Court on 26 April 1982.

Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, in accordance with Article 21 of the Protocol on the Statute of the Court of Justice of the EEC and Article 45 of the Rules of Procedure, the Court decided to conduct a preparatory inquiry.

By letter dated 26 January 1983, the Registrar of the Court requested the Luxembourg Government to reply, before 19 February 1983, to the following question: “In what circumstances, in the light of the provisions of Articles 16 and 34 of the Royal Decree of 29 January 1979, is an importer exempted from paying storage charges?”

In a letter of the same date, the Registrar requested the Commission to provide information before 1 March 1983 as to the situation regarding such charges in other Member States.

The replies of the Luxembourg Government and the Commission were lodged at the Court Registry on 22 February and 1 March 1983 respectively.

II — Conclusions of the parties

The Commission claims that the Court should:

1) Declare that, by levying storage charges on goods which originate in a Member State or are in free circulation, and which are imported into Luxembourg and presented for the completion of customs formalities at a special store, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Articles 9 and 12 of the Treaty establishing the European Economic Community;

2) Order the Grand Duchy of Luxembourg to pay the costs.

The Grand Duchy of Luxembourg contends that the Court should:

1) Declare the Commission's application unfounded;

2) Order the Commission to pay the costs.

III — Submissions and arguments of the parties

According to the Commission, it may be seen from the established case-law of the Court, in particular the judgment of 25 January 1977 (Case 46/76 Baubtas [1977] ECR 5) that: “Any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the Treaty, even if it is not imposed for the benefit of the State.” That position would be different only if the charge in question were the consideration for a service actually rendered to the exporter representing an amount proportionate to the said service or if it related to a general system of internal dues applied systematically in accordance with the same objective criteria to domestic products and imported or exported products alike (similarly, judgment of 14 December 1962, Joined Cases 2 and 3/62 Commission v Belgium and Luxembourg [1962] ECR 425; judgment of 8 November 1979, Case 251/78 Denkavit [1979] ECR 3369; judgment of 28 January 1981, Case 23/80 Kortmann [1981] ECR 251; judgment of 3 February 1981, Case 90/79 Commission v France [1981] ECR 283).

In the Commission's view, the storage charges levied by the Luxembourg authorities pursuant to the Ministerial Regulation of 21 April 1978 and the Grand-Ducal Regulation of 31 March 1978 are not related to a general system of internal dues inasmuch as the charges are imposed on the goods solely by reason of their crossing the frontier. Neither can the storage charges in question be regarded as the consideration for a service individually rendered to the importer. Within the terms of Article 30 of the Royal Decree of 29 January 1979 on customs warehouses and temporary storage “storage charges are payable on goods arriving at the store whether they are unloaded or not”. According to the Commission, that provision clearly establishes that it is not the actual use of the facilities of the store which serves to justify the payment of the fee, but the sole fact of crossing the frontier or, more precisely, the fact of presenting imported goods for the completion of customs formalities at the special store.

The Commission remarks, on the basis of the judgment of 16 June 1966 (Joined Cases 52 and 55/65 Federal Republic of Germany v Commission [1966] ECR 159) that the levying of a storage charge cannot be justified when the only benefit which the importer obtains from the use of the special store is the possibility of marketing the imported goods in the Grand Duchy; the imported products themselves enjoy no direct or indirect advantage.

In the Commission's view, to “penalize” the importer who makes use of such procedures by requiring him to pay storage charges is contrary to the objectives of the Community, according to which customs clearance formalities should be completed near the places for use or consumption. Such objectives have been given specific expression in Council Regulation (EEC) No 222/77 of 13 December 1976 on Community transit (Official Journal 1977, L 38, p. 1).

The Luxembourg Government takes the view that the charge levied in the special stores of public warehouses cannot be assimilated to a charge having an effect equivalent to a customs duty inasmuch as, in the first place, the charge is not imposed by reason of the fact that the goods have crossed the frontier and, secondly, it represents the consideration for a service actually rendered to the importers.

The Luxembourg Government emphasizes that for the completion of customs formalities within the country use of the special store is optional. Customs formalities may also be carried out either in the premises of a score of undertakings which under certain conditions are recognized as authorized consignees within the framework of measures adopted for the simplification of Community transit, or in the premises of major undertakings where a fixed customs post is established, or again in the stores or temporary storage sites of private undertakings, of Luxembourg Airport, or the river port on the Moselle, or finally in the special store of the public warehouses of Ettelbriick, Luxembourg and Esch-sur-Alzette.

The Luxembourg Government states that it is only when the customs formalities are completed on the importer's own premises, when the importer has been recognized as an authorized consignee, that no storage charge is levied. However, even in that case, the undertaking will bear certain costs relating to the installation of the appropriate facilities. When, on the other hand, the importer conveys the imported goods to a private undertaking where there is a customs service, the undertaking will require payment for the use of its facilities.

In the opinion of the Luxembourg Government, for the same reasons, the service provided by the municipal authorities justifies the payment of storage charges in consideration of the costs involved in the upkeep of the stores.

The Luxembourg Government considers that, in law, the fact which gives rise to the disputed charge is not the crossing of the frontier but the use of an infrastructure, which is provided and financed by a third party, the municipality.

The Luxembourg Government emphasizes that the special storage charge is fixed and imposed by the municipal authorities exclusively for their benefit. The maximum rate of the charge is determined at government level under the rules of the Belgo-Luxembourg Economic Union.

According to the Luxembourg Government, the fact that a special store is made available to importers corresponds entirely to the concept of a service actually and individually rendered, as it was defined by the Court, in particular in the judgments of 1 July 1969 (Case 24/68 Commission v Italian Republic); in Joined Cases 2 and 3/69 (Sociaal Fonds voor de Diamantarbeiders) of 26 February 1975 (Case 63/74 W. Cadsky SpA [1975] ECR 281) and of 25 January 1977 (Case 46/76 Bauhuis) all cited above. The opportunity of using the special store of a public warehouse enables importers who either do not have sufficient facilities to qualify as authorized consignees within the framework of measures adopted for the simplification of the system of Community transit or who do not wish to make use of the sites or temporary storage depots of other private undertakings, to complete the customs formalities near the place where the goods are used.

The Luxembourg Government considers unacceptable the Commission's view that the fee represents a charge having equivalent effect inasmuch as it does not depend on the length of time for which stores are used and remains payable even if the goods are not unloaded. The Luxembourg Government states that the fees are not calculated at a flat rate. The amount varies according to the weight and the place where the goods are unloaded. Indeed the fee may be compared to a rent or a parking charge.

The Luxembourg Government maintains that the goods generally stay in the store longer than is strictly necessary for the completion of the customs formalities, if only, for example, as a result of delays caused by the simultaneous arrival of several importers. In those circumstances, clearly the importer who parks his lorry on the public highway is not required to pay a storage charge, but in practice, that solution would not be any real help in view of the difficulties in parking and the security problems which might result from the lack of surveillance of the goods.

In the opinion of the Luxembourg Government, if the Court were to accept the Commission's argument, the municipal authorities would be obliged to alter the rules relating to the collection of storage charges so that the charges would be levied on the basis of the duration of parking before and after the completion of customs formalities, the waiting periods and the like. Such rules would not facilitate the free movement of goods inasmuch as they would entail additional administrative costs which would be borne by importers and, in certain cases, the fees charged would be higher than the present inclusive amounts.

IV — Written observations submitted in reply to the questions put by the Court

In reply to a question as to the circumstances in which, in the light of the provisions of Articles 16 and 34 of the Royal Decree of 29 January 1979, the importer is exempted from paying storage charges, the Luxembourg Government states that the Royal Decree makes no provision for the possibility of an exemption from storage charges.

Under Article 16 of the Royal Decree, an importer who has declared the goods for presentation at a public warehouse but who wishes to subject them to one of the other authorized procedures, may obtain an exemption from storage from the collector. According to the Luxembourg Government, storage charges are payable in the situation envisaged in Article 16.

Article 34 of the Royal Decree of 29 January 1979 distinguishes two possibilities. In accordance with that provision, the special regulations may stipulate that the storage charge laid down for goods destined for the special store is equally applicable:

1) To goods declared for presentation at a public warehouse and for which the collector grants an exemption from storage on their arrival;

2) To goods imported from abroad which are presented at the public warehouse for the purpose of their withdrawal from transit.

Paragraph (1) refers to the possibility provided for in Article 16, in which case storage charges are payable. They are also payable in the case referred to in Article 34 (2), in which the importer, equally, makes use of the special store of the public warehouse.

The Luxembourg Government states that all the possibilities envisaged by the provisions of the Royal Decree are expressly listed in the special regulations of the public warehouse of each municipality.

In reply to the que'stion as to the situation in this respect in other Member States, the Commission declares that according to an investigation conducted in 1976 and 1977, storage charges for fictitious operations, such as are levied in Luxembourg, are not levied in other Member States. The Commission considers that there is no reason for supposing that the situation has changed in the meantime.

The Commission expresses its regret at being unable to inform the Court of the situation in Greece. It hopes to be able to do so during the oral procedure.

V — Oral procedure

The Commission of the European Communities and the Luxembourg Government presented oral argument at the sitting on 8 March 1983.

The Advocate General delivered his opinion at the sitting on 20 April 1983.

Decision

1. By application lodged at the Court Registry on 23 April 1982, the Commission of the European Communities brought an action under Article 169 of the EEC Treaty for a declaration that, by levying storage charges on goods which originate in a Member State or are in free circulation, and which are imported into the Grand Duchy of Luxembourg, and presented for the completion of customs formalities at a special store, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Articles 9 and 12 of the Treaty.

2. The Ministerial Regulations of 21 April 1978 (Mémorial 1978, p. 505) and of 2 July 1979 (Mémorial 1979, p. 1189), in accordance with the provisions in force within the framework of the Belgo-Luxembourg Economic Union, publish in Luxembourg the Belgian Law of 20 February 1978 and the Belgian Royal Decree of 29 January 1979 respectively, on customs warehouses and temporary storage.

3. The Law of 20 February 1978 defines customs warehouses as premises where goods may be deposited without payment of any entry duties or taxes for the period during which they are stored. The Law lays down the principle that goods deposited in public warehouses are liable for payment of “storage charges”, the net income from which is paid to the municipalities which provide the premises. In accordance with Article 25 of the same Law, the Royal Decree of 29 January 1979 listed the public warehouses, fixed the maximum rate for storage charges and laid down rules for the collection thereof.

4. That legislation conforms in principle with the guidelines set out in Council Directive No 68/312/EEC of 30 July 1968 (Official Journal, English Special Edition 1968 (II), p. 416). That directive laid down the rules which must be adopted in national laws concerning the temporaiy storage of goods which importers do not wish to place immediately under a specific customs procedure. Such goods must be stored in public or private warehouses designated by the national authorities, in accordance with the requirements fixed by them, for a period of not more than 15 days, which may, in certain circumstances, be extended.

5. The development of Community transit, a concept defined and promoted by Council Regulation (EEC) No 222/77 of 13 September 1976 (Official Journal 1977, L 38, p. 1) which consolidated the provisions of Regulation (EEC) No 542/69 of the Council of 18 March 1969 and the amendments thereto, thus enabled importers to convey their goods from the frontier to public warehouses situated in the interior of the country without paying duties and taxes. In those warehouses, importers may have customs clearance operations carried out and they also have the opportunity to place the goods in temporary storage there, in particular when they do not wish to assign the goods immediately to a specific customs procedure.

6. This case concerns the levying of storage charges on goods deposited in such public warehouses situated in the interior of the countiy.

7. The Commission considers that the storage charges levied by the Luxembourg authorities represent charges having an effect equivalent to customs duties within the meaning of Articles 9 and 12 of the Treaty, inasmuch as the payment of the charges does not represent the consideration for a service rendered to the importer but is connected solely with the completion of the customs formalities.

8. The Luxembourg Government considers that the charges in question cannot be described as charges having an effect equivalent to customs duties because the event giving rise to the disputed charges is in law neither the crossing of the frontier nor the completion of customs formalities, but the use by importers of the public warehouses made available to them by the municipal authorities. Such a use amounts to a service rendered to the importers and is capable of justifying the levying of charges.

9. It is appropriate to recall, in the first place, that according to the established case-law of the Court, any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on the goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the meaning of Articles 9, 12, 13 and 16 of the Treaty, even if it is not levied by the State. The position is different only if the charge in question is the consideration for a service actually rendered to the importer and is of an amount commensurate with that service, when the charge concerned, as in this case, is payable exclusively on imported products.

10. The prohibition of charges having an effect equivalent to customs duties, laid down in the provisions of the Treaty, is justified on the ground that pecuniary charges imposed by reason or on the occasion of the crossing of the frontier represent an obstacle to the free movement of goods.

11. It is in the light of those principles that the question whether the disputed storage charges may be classified as charges having an effect equivalent to customs duties must be assessed. It should therefore be noted, in the first place, that the placing of imported goods in temporary storage in the special stores of public warehouses clearly represents a service rendered to traders. A decision to deposit the goods there can indeed be taken only at the request of the trader concerned and then ensures their storage without payment of duties, until the trader has decided how they are to be dealt with. Moreover the Commission does not dispute that the placing of goods in temporary storage may legally give rise to the payment of charges commensurate with the service thus rendered.

12. However, it appears both from the combined provisions of Articles 16, 30 and 34 of the Belgian Royal Decree of 29 January 1979 and from the arguments advanced before the Court, that the storage charges are payable equally when the goods are presented at the public warehouse solely for the completion of customs formalities, even though they have been exempted from storage and the importer has not requested that they be put in temporary storage.

13. Admittedly the Luxembourg Government claims that even in that case, a service is rendered to the importer. It is always open to the latter to avoid payment of the disputed charges by choosing to have his goods cleared through customs at the frontier, where such a procedure is free. Moreover, by using a public warehouse, the importer is enabled to have the goods cleared through customs near the places for which his products are bound and he is therefore relieved of the necessity of himself either having at his disposal premises suitable for their clearance, or having recourse to private premises, the use of which is more expensive than that of the public warehouses. It is therefore legitimate, in the Luxembourg Government's view, to impose a charge commensurate with that service.

14. That argument cannot however be accepted. Whilst it is true that the use of a public warehouse in the interior of the country offers certain advantages to importers, it seems clear first of all that such advantages are linked solely with the completion of customs formalities which, whatever the place, is always compulsory. It should moreover be noted that such advantages result from the scheme of Community transit, introduced by Regulations Nos 542/69 and 222/77, not in the interests of individual traders, but, as the fourth and sixth recitals in the preamble to Regulation No 222/77 clearly indicate, in order to increase the fluidity of movement of goods and to facilitate transport within the Community. There can therefore be no question of levying any charges for customs clearance facilities accorded in the interest of the common market.

15. It follows from the foregoing, that when payment of storage charges is demanded solely in connection with the completion of customs formalities, it cannot be regarded as the consideration for a service actually rendered to the importer.

16. Consequently, it must be declared that, by levying storage charges on goods which originate in a Member State or are in free circulation, and which are imported into the Grand Duchy of Luxembourg, and presented merely for the completion of customs formalities at a special store, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Articles 9 and 12 of the Treaty.

Costs

17. Under Article 69 (2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been asked for in the successful party's pleading. Since the Grand Duchy of Luxembourg has been unsuccessful, it must be ordered to pay the costs.

On those grounds, THE COURT hereby:

1 Declares that, by levying storage charges on goods which originate in a Member State or are in free circulation, and which are imported into the Grand Duchy of Luxembourg, and presented merely for the completion of customs formalities at a special store, the Grand Duchy of Luxembourg has failed to fulfil its obligations under Articles 9 and 12 of the Treaty;

2 Orders the Grand Duchy óf Luxembourg to pay the costs.