Report for the Hearing delivered in Case 340/87

I — Facts

1. Article 11 of Decree No 43 of the President of the Italian Republic of 23 January 1973 consolidating the legislative provisions in customs matters (ordinary supplement to the Gazzetta ufficiale della Repubblica italiana 80, of 28 March 1973), as amended by Article 1(2) of Decree No 254 of the President of the Italian Republic of 8 May 1985 {Gazzetta ufficiale della Repubblica italiana 138, of 13 June 1985, p. 4165), which was intended to transpose into Italian law Council Directive 83/643 of 1 December 1983 on the facilitation of physical inspections and administrative formalities in respect of the carriage of goods between Member States (Official Journal L 359, p. 8), as amended by Council Directive 87/53/EEC of 15 December 1986 (Official Journal L 24, p. 33), provides that:

‘where the volume of traffic so warrants the hours of customs offices and their various departments at border crossings, ports and airports must be such ... as to permit:

a) ...

b) inspections and formalities relating to the movement of means of transport and of goods which are not being carried under a customs transit procedure to be performed from Monday to Friday during an uninterrupted period of at least 10 hours, and on Saturday during an uninterrupted period of at least six hours, unless those days are public holidays; a charge corresponding to the cost of the service shall be levied for customs transactions carried out during business hours but outside the normal working hours of the civil service’.

2. Article 15 of Decree No 254 of the President of the Italian Republic provides more generally that:

‘inspections and administrative formalities referred to in the present decree carried out during the business hours of offices outside normal civil service hours... shall be charged for at the cost of the service’.

3. In Italy normal civil service working hours are six hours per day.

4. Article 5(l)(a) of Directive 83/643, as amended by Directive 87/53, provides that: Article 5(4) further provides that:

‘Member States shall see to it that:

a) where the volume of traffic so warrants, frontier posts are open, except when traffic is prohibited, so that:

i) frontiers can be crossed 24 hours a day, with the corresponding inspections and formalities, in the case of goods placed under a customs transit procedure, their means of transport and vehicles travelling unladen, save where frontier inspection is necessary to prevent the spread of disease,

ii) inspections and formalities relating to the movement of means of transport and goods which are not being carried under a customs transit procedure may be performed from Monday to Friday during an uninterrupted period of at least 10 hours, and on Saturday during an uninterrupted period of at least six hours, unless those days are public holidays’.

‘for the frontier posts and customs services referred to in paragraph 1, and under the conditions laid down by Member States, the competent authorities of the Member States shall provide, if specifically requested during business hours and for sound reasons, for inspections and formalities to be carried out, as an exception, outside business hours, on condition that, where relevant, payment be made for services so rendered’.

5. The Commission took the view that in so far as the aforementioned national provisions provide for operators who satisfy the conditions referred to in the second indent of Article 5(1)(a) of Directive 83/643 to be charged the cost of the services of customs staff from Monday to Friday for four of the normal daily business hours of frontier customs offices, they introduce a tax having an effect equivalent to a customs duty prohibited in trade between Member States by Articles 9 and 12 of the EEC Treaty and by Article 5 of Directive 83/643 and in trade with nonmember countries by the EEC regulations on the common organization of the agricultural markets and by preferential agreements made by the Community with certain nonmember countries. The Commission therefore, by letter of 28 April 1986 pursuant to Article 169 of the EEC Treaty, requested the Government of the Italian Republic to submit its observations on the alleged failure to fulfil its obligations.

6. Since there was no reply to that letter, on 31 October 1986 the Commission delivered a reasoned opinion pursuant to the first paragraph of Article 169 of the EEC Treaty to the effect that by charging operators the cost of inspections and administrative formalities carried out during part of the normal business hours of the offices at frontier crossing points the Italian Republic has failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty, the provisions of the EEC regulations on the common organization of the markets under the common agricultural policy which prohibit charges having an effect equivalent to customs duties, the provisions of the preferential agreements concluded by the Community with certain nonmember countries which prohibit charges having an effect equivalent to customs duties, and Article 5 of Directive 83/643. Pursuant to the second paragraph of Article 169 of the EEC Treaty the Commission requested the Italian Republic to adopt the measures necessary to comply with the opinion within 30 days.

7. On 21 May 1987 the Italian Republic informed the Commission that interministerial meetings were taking place to consider the problem thoroughly and that the Commission would immediately be informed of the results.

8. The Commission has received no information on the matter.

II — Written procedure and conclusions of the parties

1. By application lodged at the Court Registry on 2 November 1987 the Commission brought an action before the Court pursuant to the second paragraph of Article 169 of the EEC Treaty for a declaration that the Italian Republic had failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty, the provisions of the EEC regulations on the common organization of agricultural markets and the preferential agreements concluded by the Community with certain nonmember countries which prohibit charges having an effect equivalent to customs duties, and Article 5 of Directive 83/643.

2. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General the Court decided to open the oral procedure without any preparatory inquiry. The Commission and the Government of the Italian Republic were requested to answer certain questions in writing, which they did within the stipulated period.

3. The Commission, the applicant, claims that the Court should: (i) declare that by charging operators the cost of inspections and administrative formalities carried out during part of the normal business hours of customs offices at frontier crossing points the Italian Republic has failed to fulfil its obligations under Articles 9 and 12 of the EEC Treaty, the provisions of the EEC regulations on the common organization of the markets under the common agricultural policy which prohibit charges having an effect equivalent to customs duties in trade with nonmember countries, the provisions of the preferential agreements concluded by the Community with certain nonmember countries which prohibit charges having an effect equivalent to customs duties, and Article 5 of Directive 83/643; (ii) order the Italian Republic to pay the costs.

4. The Government of the Italian Republic, the defendant, contends that the Court should: (i) dismiss the action by the Commission; (ii) order the Commission to pay the costs.

III — Submissions and arguments of the parties

1. The Commission submits that the contested national provisions are incompatible with Article 5(1) and (4) of Directive 83/643 in so far as they require payment of the cost of the service for customs transactions carried out during business hours outside the six-hour period which is the normal working day for civil servants in Italy. The directive does not allow a Member State to charge traders the cost of inspections and administrative formalities carried out during part (in the present case 4 hours) of the normal opening hours of frontier crossing points provided for by the directive, namely a minimum of 10 hours per day from Monday to Friday. In the Commission's view the charge of the cost of the service between the seventh and 10th business hours of the offices is also a tax having an effect equivalent to a customs duty, prohibited by Articles 9 and 12 of the EEC Treaty. The Commission also considers that the contested national provisions infringe Community law relating to trade with nonmember countries, in particular the prohibition on the levying of taxes having an effect equivalent to customs duties contained in the EEC regulations on the common organization of the agricultural markets (e.g. Article 20(2) of Council Regulation (EEC) No 425/77 of 14 February 1977 amending Regulation (EEC) No 805/68 on the common organization of the market in beef and veal and adapting Regulation (EEC) No 827/68, and Regulation (EEC) No 950/68 on the common customs tariff (Official Journal 1977, L 61, p. 1)) and in preferential agreements concluded between the Community and certain nonmember countries (e.g. Article 6 of the agreement annexed to Council Regulation (EEC) No 1691/73 of 25 June 1973 concluding an Agreement between the European Economic Community and the Kingdom of Norway and adopting provisions for its implementation, Official Journal 1973, L 171, p. 1). The Commission disputes the arguments put forward by the Government of the Italian Republic in its defence. With regard to the contention that its complaints are confined to frontier customs offices and therefore the only relevant national rule is Article 11 and not Article 15 the Commission observes that it has never referred to ‘inland’ customs offices or offices ‘of destination’ and that therefore the present proceedings are concerned only with ‘frontier crossing points’. However, that term covers not only points which are directly on the frontier but also those which are adjacent to it; thus it covers both the first customs point which carriers encounter after crossing the frontier on entering and the last point before crossing the frontier on exit. The Italian legislation has provisions in accordance with that interpretation. The Commission submits that there is no substance in the argument that Directive 83/643 is concerned only with the facilitation of formalities relating to the movement of means of transport and of goods and not with actual customs clearance so that Article 11 of the national legislation in issue is not contrary to Community law. In the first place, if Italy's contentions were true, Directive 83/643 would be only of insignificant scope. In the Commission's view it is difficult to imagine that the directive should have been intended to be confined to aspects of the movement of goods which cause no problem while excluding those which affect traffic flow. That view is fully confirmed by a perusal of Directive 83/643 as amended by Directive 87/53. As is already clear from their preambles the scope of the directives goes far beyond the simple movement of goods and means of transport. Moreover, Article 5(1)(a) of Directive 83/643 as amended by Directive 87/53 draws a clear distinction between ‘goods placed under a customs transit procedure’ (first indent) and those ‘which are not being carried under a customs transit procedure’ (second indent). In the Commission's view the first case concerns the movement of goods and means of transport while the second covers all other cases including customs clearance in every respect. It is significant that in its defence the Government of the Italian Republic, when citing the second indent, omitted the abovementioned phrase, which is crucial in the present case. That fundamental distinction reflects the difference between the methods intended to ensure traffic flow, namely, in the first case, the requirement that frontiers may be crossed 24 hours a day and, in the second case, the requirement that frontier posts should be open from Monday to Friday for an uninterrupted period of at least 10 hours and on Saturday for an uninterrupted period of at least six hours. Article 11 of the contested national legislation adopts almost word for word the aforementioned provision of the directive, save that the second case is subject to the obligation to pay the costs which is the subject of the present proceedings. The Commission considers that its view is confirmed by the words ‘clear goods and vehicles effectively’ in Article 5(3) of Directive 83/643, which provides for possible derogation from the provisions of Article 5(1) where several frontier posts are situated in the same port or airport zone and the other posts in that zone are able to clear goods and vehicles effectively. The Commission submits that Article 5(4) of the directive provides an additional argument against the restrictive view of the directive's scope for which the defendant pleads. The phrase ‘outside business hours’ necessarily refers to the case in the second indent since the first indent provides for opening of frontier posts 24 hours a day. The directive itself provides in certain exceptional cases for the possibility of making customs transactions subject to a charge for services, but only where the transactions take place outside the normal 10 business hours. The Commission could agree with the Italian Republic's contention that the charge of the cost of the service for customs transactions carried out outside normal working hours cannot be regarded as a tax having an effect equivalent to a customs duty since it is genuine consideration for services provided in the interests of the importer if the phrase ‘outside normal working hours’ meant ‘outside the 10 normal working hours provided by the directive’ and not ‘outside the six normal working hours of civil servants’ as the contested national provision provides.

2. The Government of the Italian Republic contends that the Commission's application is unfounded. With regard to the scope of the proceedings the Italian Government submits that the Commission's complaints are concerned solely with frontier customs offices, so that inland customs offices are not affected by the present proceedings. It follows first of all that Article 11 of the national law is the only one that should be considered in the present case; Article 15 of Decree No 254, cited by the Commission, is irrelevant, for it is not especially concerned with frontier customs offices. Secondly, the Commission's view amounts to regarding it as lawful for inland customs offices or offices of destination to make a charge for the cost of customs transactions outside the six normal working hours of civil servants whereas for frontier offices to do so would infringe Community law. In the view of the Government of the Italian Republic that solution would lead to unacceptable results. It would encourage customs clearance at frontiers rather than at inland offices, thereby increasing the work of frontier posts and obstructing the flow of traffic, which would be completely contrary to the objective of Directives 83/643 and 87/53. Moreover, the Commission's interpretation would lead to unacceptable discrimination between Community goods cleared in inland offices and those cleared at frontiers since in the case of the first there would be free customs clearance only during six hours a day whereas in the case of the second there would be free customs clearance for 10 hours a day. The Italian Government observes finally that it is clear from Article 2(2) of Directive 83/643, as amended by Directive 87/53, that the intention was to favour customs clearance at inland offices and that intention would be frustrated if the Commission's view were adopted. As regards the scope of Directive 83/643 the Government of the Italian Republic submits that both the wording of Article 5 of the directive and the directive's objective show that the facilities provided for by the directive are restricted to aspects relating to the movement of means of transport and goods and in no way concern actual customs clearance. Article 11 of the Italian law accordingly draws a clear distinction between the two cases; inspections and formalities relating to the movement of means of transport and of goods may be carried out without charge for the service whereas in the case of customs transactions the cost of the service is charged to operators when they are carried out during business hours but outside the normal working hours of civil servants. In the view of the Italian Government ‘customs transactions’ within the meaning of the contested national law must be understood as covering the actual clearance of goods which by reason of its complexity entails not only additional work for the customs authorities but also the stoppage of the goods. The Government of the Italian Republic concludes that if Article 11 of its national law is correctly interpreted it is fully compatible with Article 5 of Directive 83/643. For the same reason the contested national law does not introduce any tax having an effect equivalent to a customs duty, so that there is no foundation to the Commission's complaints based on Articles 9 and 12 of the EEC Treaty and, as regards trade with nonmember countries, on the regulations concerning the common organization of the agricultural markets and on the preferential agreements concluded between the Community and certain nonmember States. In any event, the charge for customs transactions carried out during business hours outside normal working hours cannot be regarded as a tax having an effect equivalent to a customs duty since it constitutes genuine consideration for a service rendered in the interest of the importer and is proportionate to the value of that service. In answer to the arguments put forward by the Commission in its reply the Government of the Italian Republic submits that the substantive distinction referred to by the Commission between the first and second indents of Article 5(1)(a) of Directive 83/643 in no way follows from the Community provision at issue. On the contrary, both indents relate to the movement of goods and means of transport and the only difference is that the first indent refers to goods already subject to a transit procedure whereas the second relates to goods which are not being carried under a customs transit procedure. In the defendant's view, the second indent in no way concerns actual customs clearance, and since the expression ‘goods which are not being carried under a customs transit procedure’ has no relevance to the question at issue it was properly omitted from the reference to the second indent in the defence. The Government of the Italian Republic argues that its case is not refuted by the fact that Article 5(3) of Directive 83/643 uses the words ‘clear goods and vehicles effectively’. First of all, it is not possible to determine the scope of the directive on the basis of those words alone; secondly, it is difficult to give the words the significance which the Commission suggests because the directive was prepared by the Working Party on Transport Questions and not by the Working Party on Economic and Customs Questions, which has more specific competence in relation to the correct use of customs terminology. Finally, Article 5(4) of the directive does not support the Commission's case either since the only conclusion to be drawn from that provision is that Member States are authorized to make a charge for the cost of the service even in relation to inspections and formalities connected with the movement of means of transport and of goods where the inspections and formalities are carried out outside business hours.

IV — Answers to questions put by the Court

1. The Court requested the Commission to answer in writing the following question: The Commission agrees that if customs transactions were carried out at inland customs offices located near the place of destination of the goods it would facilitate frontier crossing. That it why it has always encouraged customs transactions at inland offices, as is shown by Council Regulation (EEC) No 222/76 of 13 December 1976 on Community transit and Commission Regulation (EEC) No 223/76 of 22 December 1976 on provisions for the implementation of the Community transit procedure and for certain simplifications of that procedure (Official Journal 1977, L 38, pp. 1 and 20). The Commission adds that experience shows, however, that a large proportion of customs clearance continues to be carried out at frontier posts because health inspections must be made at the frontier, frontier posts are provided with complete infrastructure and hauliers avoid extending their journey in order to go to an inland office which may not necessarily be at the place of destination of the goods. It was that situation that led the Community institutions to adopt measures, such as Directives 83/643 and 87/53 in question in the present case, to facilitate frontier crossing and to simplify the inspections and formalities to be carried out at frontier posts by providing for extended business hours for frontier offices and for free inspections and formalities during those business hours. The Commission concludes that the requirements of frontier posts are different from those of inland customs offices, so that it is not anomalous that inspections at frontiers should be treated more favourably than those carried out at inland offices.

‘Does the Commission not consider that it would be in the interest of speedy passage across frontiers and in accordance with the objective of abolishing internal frontiers if customs transactions were to be carried out in inland customs offices close to the place of destination? If so, is it not anomalous if inspections at frontier posts should be treated more favourably than those carried out at an inland office?’

2. Asked to specify what it means by ‘actual customs clearance’ in the case of goods imported from another Member State, where in its defence it alleged that Directive 83/643 is not applicable to ‘customs transactions’ consisting in the ‘actual customs clearance of goods’, the Government of the Italian Republic replies that that phrase concerns goods coming from both nonmember countries and other Member States. It covers customs transactions which because of their complexity involve the customs authority in extra work and stoppage of the goods for possible physical inspection, the provision of guarantees or the payment of customs duties. The Government of the Italian Republic adds that there is ‘actual customs clearance of goods’ where the person concerned presents a customs declaration giving the goods a status for customs purposes (for example final importation, temporary importation, storage), since in such cases the goods in question are stopped at the frontier customs post for the purposes of the customs declaration and completion of formalities appropriate to their status for customs purposes. The Government of the Italian Republic states that that situation may also arise in the case of goods (originating in and) coming from other Member States, since in that case customs duties, although levied at customs posts, are part of a general system of internal taxation (for example value-added tax on importation, manufacturing duties and additional frontier charges).

F. A. Schockweiler

Judge-Rapporteur

1 Language of the case: Italian.