Report for the Hearing delivered in Case C-189/88

I — Facts and procedure

1. Council Regulation (EEC) No 551/83 of 8 March 1983 imposing a definitive antidumping duty on kraftliner paper and board originating in the United States of America and accepting undertakings given in connection with the review of the antidumping proceeding on kraftliner paper and board originating in Austria, Canada, Finland, Portugal, the Soviet Union and Sweden (Official Journal 1983, L 64, p. 25) imposed a definitive antidumping duty on kraftliner paper and board, ‘unbleached kraftliner’, originating in the United States of America. Article 2(1) of that regulation provides that the amount of the antidumping duty is to correspond to the difference between the normal value in the United States of America and the ‘free-at-frontier Community price, duty-unpaid, per tonne net to the first purchaser in the customs territory of the Community’. The normal value in the United States, calculated in accordance with Article 2(2) of the regulation, is expressed in United States dollars.

2. Cartorobica SpA (hereinafter referred to as ‘Cartorobica’) of Milan is active in the paper industry. In September 1985 and April 1986 it imported kraftliner paper and board from the United States of America without paying the antidumping duty imposed by Regulation No 551/83. On 9 June 1987 the Italian Ministry of Finance, acting through the Customs Office at Savona, served on it a demand for payment of a total of LIT 13481060, namely LIT 11276500 by way of antidumping duties and LIT 2204560 by way of interest. Cartorobica challenged the demand for payment in proceedings in the tribunale di Genova (District Court, Genoa). It claimed in particular that the Community regulation at issue was invalid because it linked the antidumping duty to the value of the dollar; since the dollar had strengthened considerably against the Italian lira at the time when the goods in question were imported, Cartorobica had had to bear additional costs and was placed at a disadvantage compared with its competitors in Member States with strong currencies.

3. In those circumstances, the tribunale di Genova (First Civil Section), by an order of 23 June 1988, stayed the proceedings and referred the following questions to the Court of Justice for a preliminary ruling:

‘(1) Is Council Regulation No 551/83 valid in view of the fact that it does not permit the customs authorities of the Member States to determine antidumping duties directly, by means of an automatic calculation unaffected by currency fluctuations, but refers instead to a single, definitive threshold price which is not envisaged as a method of calculation either by Council Regulation No 3017/79 (Official Journal 1979, L 339, see in particular Article 2(9) under Heading D and Article 2(13) under Heading F) or by the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) (Official Journal 1980, L 71, see Article 2(6))?

2) Is Council Regulation No 551/83 valid inasmuch as it states the threshold price, by reference to which the antidumping duty is determined, in United States dollars rather than in European currency units, thereby introducing as a point of reference a currency whose fluctuations could not be controlled by the Community institutions?

3) If the answer to the first two questions is in the affirmative — and Regulation No 551/83 is accordingly held to be valid — is that regulation to be interpreted as meaning that the value, expressed in the various national currencies, of the threshold price of USD 333 to which reference must be made for determining the antidumping duty must not, as a result of currency fluctuations, vary from the level (expressed in a national currency) as ascertained at the time when that threshold price was introduced?’

4. The order of the tribunale di Genova was received at the Court Registry on 11 July 1988.

5. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by Cartorobica, represented by Fausto Capelli, of the Milan Bar; by the Government of the Kingdom of the Netherlands, represented by E. F. Jacobs, Secretary-General of the Ministry of Foreign Affairs; by the Commission of the European Communities, represented by Eugenio de March, a member of its Legal Department, acting as Agent; and by the Council of the European Communities, represented by Erik Stein, Legal Adviser to its Legal Department.

6. Upon hearing the repon of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure. It also put a question to the Council and the Commission.

7. By decision of 4 October 1989, the Court assigned the case to the Third Chamber.

II — Written observations submitted to the Court

The first two questions

1. Cartorobica has submitted the following observations to the Court: (a) With regard to the first question, Cartorobica states that under the Community antidumping rules the Community authorities are to fix the antidumping duty by means of a specific comparison of two objectively determined items of data. That duty is to be imposed and collected uniformly in all the Member States of the Community. Accordingly, Council Regulation (EEC) No 3017/79 of 20 December 1979 on protection against dumped or subsidized imports from countries not members of the European Economic Community (Official Journal 1979, L 339, p. 1), upon which Regulation No 551/83 is based, provides that the antidumping duty is to be fixed by reference to the normal value of the product in question in the exporting country and to the export price to the Community. Cartorobica claims that the normal method of imposing antidumping duty is to make a precise determination of the amount of the duty by fixing it in ecus. By this means the customs authorities of all the Member States can apply the duty on the basis of the same criteria and without discrimination, regardless of the monetary situation of the various Member States; in particular, any currency fluctuations are neutralized by the offsetting of exchange rates between the ecu and the various national currencies. Cartorobica argues that that normal method was not used in this case, since the antidumping duty was not fixed precisely but by reference to a threshold price. In Cartorobica's view: (i) there are few precedents for that method in standard Community practice, and they are justified by special circumstances; (ii) that method is not expressly authorized either by the basic general legislation, namely Regulation No 3017/79, cited above, or by the legislation which came before and after that regulation. Since, the antidumping rules are in the nature of derogations, they must be interpreted strictly; (iii) that method confers on the customs authorities of the Member States an exceptional power to fix themselves the amount of the duty to be levied on all imports. When the normal method of fixing antidumping duty is used the customs authorities of all the Member States merely convert the amount of the levy fixed by the Community authorities into their own national currencies; however, when a threshold price is used to fix a duty, as in the present case, the customs authorities themselves determine the amount of the duty by calculating the difference between an amount which is fixed and known (the threshold price) and a variable amount which must be constructed on a case-by-case basis. The definition of this second amount given in Article 2 of Regulation No 551/83, namely ‘the free-at-frontier Community price, duty-unpaid, per tonne net’, is technically vague and allows the customs authorities a discretionary power to fix the import price, with the result that it is impossible to ensure that the antidumping duty is applied uniformly in the Community. In that regard, Cartorobica effects a comparison with the provisions of Council Regulation (EEC) No 1224/80 of 28 May 1980 on the valuation of goods for customs purposes (Official Journal 1980, L 134, p. 1), which uses in order to define the customs value of goods terms which are precise and comprehensive so as to minimize the national customs authorities' discretion (see for example Article 3(1) and (3)(a) and (b) and Articles 4, 5 and 8 of Regulation No 1224/80). Consequently, it is unlawful to fix antidumping duties by reference to threshold prices because the vagueness of the definition of the import price allows the customs authorities excessive discretion, which is increased even further by the fact that the customs authorities must perform the calculations in a foreign currency, namely the dollar, the value of which has fluctuated very sharply and unpredictably in the material period. Cartorobica argues that the Community rules give the task of fixing antidumping duties, not to the Member States, but to the Community institutions. Consequently, the Community institutions must determine those duties precisely and the customs authorities of each Member State must be able to convert the amount of the antidumping duty into national currency by means of a straightforward mathematical calculation. It is only possible to grant customs authorities the power to determine the antidumping duty themselves by reference to a threshold price which is to be used as a parameter if this is expressly provided for in the basic rules and if the regulation establishing the duty in question lays down detailed rules for the exercise of that power both from the technical point of view and as regards its duration. If such a power had been granted, the period of validity of Regulation No 551/83 would not have been so long (five years) and it would not have merely laid down a vague and incomplete rule which took no account at all of the rules for determining the customs value of goods. Cartorobica adds that, in the United States of America, whenever antidumping duties are fixed on the basis of a threshold price, the importer is required to pay only a certain amount to the customs authorities on account and the definitive duty is levied subsequently on the basis of a very thorough and detailed examination of each transaction. Moreover, the period of validity of the provisions under which the customs authorities operate is shorter than that of Regulation No 551/83, which limits any errors due to currency movements. Furthermore, experts working for the Commission of the European Communities believe that a system of that kind pays more heed to the rights of economic operators; however, the reason why they do not advocate the introduction of such a system in the Community is simply because they consider that it would be too burdensome and too difficult to implement. Cartorobica concludes that the reply to the first question ought to be that Regulation No 551/83 is invalid in so far as it confers on the customs authorities of the Member States powers which ought to be exercised by the Community institutions themselves. (b) With regard to the second question, Cartorobica states that, to its knowledge, Regulation No 551/83 is the only instance in Community legislation of reference to a threshold price expressed in a currency other than ecus. It also points out that the proposal for a regulation intended to replace Regulation No 551/83 made provision for threshold prices expressed in ecus and abandoned the reference to the dollar (in fact, the new regulation was not adopted, with the result that the antidumping measures applicable to kraftliner paper and board expired on 10 March 1988 —see Commission Notice 88/C72/05, Official Journal 1988, C 72, p. 6). Cartorobica emphasizes that the ecu, which is defined in terms of a ‘basket’ of European currencies, has the advantage of being stable in relation both to the various European currencies and to the currencies of nonmember countries, in particular the dollar. The stability of the ecu obviates distortions of competition, resulting from fluctuating exchange rates, between European undertakings to the detriment in particular of those based in countries with higher inflation, such as Italy. The Community authorities are fully aware of the damage caused by currency fluctuations which is why the Commission has tried for some time to make systematic use of the ecu (as is shown by Cartorobica's example of the directive on insurance). Moreover, according to Cartorobica, the practice adopted by European importers in the kraftliner paper and board sector shows that it is now essential to use a stable currency for import transactions. In the present case, owing to the fact that the threshold price was fixed in dollars, Italian importers were exposed simultaneously to the fluctuations of the dollar and to the depreciation of the lira. Consequently the cost of their imports from the United States underwent an increase of the order of 35%. The increase would have been much less if the threshold price had been fixed in ecus. Furthermore, Italian importers were affected markedly more than all other European traders in the sector in question and therefore suffered unacceptable discrimination. For example, the strength of the German mark against the dollar meant that German importers suffered much smaller increases in their costs. Cartorobica considers as a result that the Community, which has its own reference currency, is not entitled to fix an antidumping duty, applicable to all European undertakings, which is linked to a single foreign currency whose fluctuations are outside the control of the Community institutions. Giving a worked example in support of its argument, Cartorobica claims that notwithstanding the rise in the dollar it would have been pointless for it to ask for a reduction in the — dollar-dominated — supply price, of kraftliner paper and board, because then it would have had to pay antidumping duty; however, if the duty had been fixed by reference to the ecu Cartorobica would have been able to ask for such a reduction and, if successful, would not have had to pay antidumping duty. In Cartorobica's view, the imposition of additional, discriminatory charges on Italian traders importing kraftliner paper and board from the United States is unlawful since it is due to a massive error (fixing of the threshold price not in ecus but in dollars) and to an erroneous economic policy (imposition of a Community duty based on a foreign currency, the dollar, which is completely outside the control of the Community authorities). The applicant in the main proceedings claims therefore that the reply to the second question should be that Regulation No 551/83 is invalid having regard to the general prohibition of discrimination enshrined in Article 7 of the Treaty and in the basic regulation, Regulation No 3017/79, in so far as it fixed the threshold price not in ecus but in dollars. That conclusion is borne out both by academic writers and the case-law. Academic writers consider that variations in the exchange rates of the various currencies must be taken into account by making appropriate adjustments whenever necessary in order to avoid antidumping duties being levied in an arbitrary or discriminatory manner. The case-law also inclines to the view that currency fluctuations must be taken into account for all kinds of transactions (see the judgments of 3 February 1982 in Case 248/80 Glunz v Hauptzollamt Hamburg-Waltershof [1982] ECR 197, and of 3 June 1980 in Case 135/79 Gedelfi v Hauptzollamt Hamburg-Jonas [1980] ECR 1713). Those fluctuations must be taken into account a fortiori when actually fixing antidumping duties, as is evident from the judgments of 24 October 1985 in Case 239/84 Gerlach v Minister for Economic Affairs [1985] ECR 3507 and of 7 May 1987 in Case 255/84 Machi Fujikoshi v Council [1987] ECR 1861.

2. The Kingdom of the Netherlands states that the distortion of competition between undertakings operating in the Community, referred to by Cartorobica, does not result from fluctuations in the exchange rate of the dollar, but from exchange-rate movements of the currencies of the Member States as against each other. As long as the exchange rate of each of these currencies remains constant in relation to all the rest, they will all be affected in the same way by fluctuations in the exchange rate of the dollar. In the present state of Community law, exchange-rate policy is primarily a matter for the Member States, it being understood that each Member State is to treat its policy with regard to rates of exchange as a matter of common concern (Article 107 of the Treaty). Nevertheless, occasional adjustments to the exchange rates are unavoidable and do not infringe the Treaty. The Netherlands Government adds that it is seeking to bring about a Community policy which would reduce such adjustments to a minimum and that in the long term a European monetary unit must be introduced. Finally, the Kingdom of the Netherlands concludes that the distortion of competition alleged by Cartorobica, and consequently the fact that the antidumping duties are expressed in dollars, is not incompatible with the Treaty.

3. The Council and the Commission point out that Regulation No 551/83 is based on Regulation No 3017/79, as amended by Council Regulation (EEC) No 1580/82 of 14 June 1982 (Official Journal 1982, L 178, p. 9), and that those general rules were adopted by the Community pursuant to the ‘Anti-Dumping Code’ contained in the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, approved on behalf of the European Economic Community by Council Decision 80/271 /EEC of 10 December 1979 concerning the conclusion of the Multilateral Agreements resulting from the 1973-79 trade negotiations (Official Journal 1980, L 71, p. 1). However, the national court's reference to the provisions of Article 2(9) and (13) of Regulation No 3017/79 and to Article 2(6) of the Anti-Dumping Code is of no assistance, because those provisions relate to making a fair comparison between the export price and the normal value, on the one hand, and the dumping margin, on the other, and do not deal with the type of measure to be applied in order to counteract dumping. (a) With regard to the latter point, Article 13(2) of Regulation No 3017/79 provides merely that regulations imposing antidumping duties ‘shall indicate in particular the amount and type of duty imposed’, thereby leaving to the institutions the power to assess what type of duty they consider most appropriate to counteract dumping causing injury. In practice the institutions have a choice between three types of duty: (i) ad valorem duties, expressed as a percentage of the price of the goods, (ii) specific duties, expressed as a fixed amount per unit imported, (iii) variable duties, expressed as the difference between the import price and a fixed amount or a minimum price, and in all those cases the amount of the duty may not exceed the dumping margin or such amount as is sufficient to remove the injury to Community industry in accordance with Article 13(3) of Regulation No 3017/79. The Council and the Commission both claim that the advantages of the first two types of duty are that they are easy to apply and difficult or impossible to evade. On the other hand, they lack flexibility in the event of a change in circumstances. The third type of duty can easily be evaded. However, it offers several advantages: it is often the most appropriate for removing the injury suffered by Community industry, it encourages exporters to align their prices on normal values and it reduces price competition between the various exporters in question. The Commission observes that the — relatively frequent — practice of opting for variable duties is consistent with Article VI of GATT and with the Anti-Dumping Code, since variable duties are fixed in the same way as the basic price system as provided for in Article 8(3) of the Code. The Council, for its part, states that in this case the variable-duties method was chosen ‘in order to ensure fair treatment of imports at different prices’, as is stated in one of the recitals in the preamble to Council Regulation (EEC) No 2133/78 of 8 September 1978 imposing a definitive antidumping duty on kraftliner paper and board originating in the United States of America (Official Journal 1978, L 247, p. 22), which was replaced by Regulation No 551/83. (b) With regard to the choice of the dollar as the reference currency in preference to the ecu, the Council and the Commission claim that the Community institutions have a discretionary power in this sphere. There is no requirement in Community law, and in particular in Council Regulation (EEC) No 2779/78 of 23 November 1978 on the procedure for applying the European unit of account (EUA) to legal acts adopted in the customs sphere (Official Journal 1978, L 333, p. 5) to use the ecu to establish the minimum price for determining antidumping duties. Although the ecu is frequently used, other currencies have been used, in particular, as in this case, the United States dollar. Consequently, the Community institutions select the currency which is most appropriate for expressing the minimum price, having regard to the special circumstances of each case. In this case, the dollar was selected because all the production costs of the US producers were in that currency and in many transactions the export price was also expressed in dollars; moreover, since the amount of the duty was fixed in the light of the normal value of the product on the US market, it seemed natural to express that value in US dollars. (c) As far as currency fluctuations are concerned, the Council and the Commission observe that although it is true that the Community institutions cannot control fluctuations of the dollar, they are also unable to control the exchange rate of the ecu. For the rest, the Council refers to the reply which it and the Commission gave to the second question asked by the Court in Cases 240/84, 255/84, 258/84 and 260/84 (judgments of 7 May 1987 in Toyo v Council [1987] ECR 1809, Nacbi Fujikosbi v Council [1987] ECR 1861, Nippon Seiko v Council [1987] ECR 1923 and Minebea v Council [1987] ECR 1975). In that reply, the institutions expressed the view that in general it was inappropriate to take exchange-rate fluctuations into account. The Commission, for its part, states that it is aware that currency fluctuations affect the calculation of antidumping duties such as those provided for in Regulation No 551/83. However, it observes that those fluctuations also influence ad valorem duties and specific duties and that they would also have had an effect on the variable duty imposed in this case even if the minimum price had been fixed in ecus. Finally, in the Commission's view, Italian importers were not placed at a disadvantage in comparison with German importers because minimum prices were expressed in dollars rather than in ecus. The fact that the minimum price was expressed in dollars in the regulation at issue does not therefore make the regulation discriminatory. Finally, the Commission and the Council consider that consideration of the questions referred to the Court have disclosed no factor of such a kind as to affect the validity of Regulation No 551/83.

The third question

1. Cartorobica claims that in the absence of injury to Community industry by dumped products from nonmember countries the antidumping regulations are not applicable. To apply them would be to infringe not only the basic regulation, Regulation No 3017/79, but also the GATT rules. According to the case-law of the Court (judgment of 23 May 1985 in Case 53/83 Allied Corporation v Council [1985] ECR 1621), antidumping duties must be maintained to the extent necessary to enable those duties to counteract the harmful effects of the dumping operations. However, the Council failed to fulfil its obligations in so far as it entrusted the national customs authorities with the task of actually determining the amount of the antidumping duties and inasmuch as, since the threshold price was fixed in dollars, it allowed the enormous variations in the value of that currency to have different and discriminatory effects on undertakings in the various Member States. The Commission, for its part, bears even greater responsibility since in February 1985 the Italian Association of Manufacturers of Corrugated Board informed it that the rise in the dollar was having very serious effects and the Commission merely replied that differences in exchange rates did not necessarily alter the dumping margins obtained by comparing prices expressed in the currency of the exporting country. Cartorobica considers that such a reply is meaningless in the case of an antidumping duty determined by the customs authorities of the Member States by reference to a threshold price expressed in dollars. Moreover, other requests to the Commission for a review of the situation were simply turned down. Cartorobica adds that the antidumping duty provided for by Regulation No 551/83 cannot be applied in the present case, because in September 1985 the price of the kraftliner paper and board which it imported was much higher than the threshold price fixed, both in ecus and in lire, on the date on which the regulation entered into force, and that therefore the price which it paid could in no way injure the interests of the Community. It is all the more absurd to require it to pay antidumping duties, since under Article 15 of Regulation No 3017/79 ‘where an importer can show that the duty collected exceeds the actual dumping margin... the excess amount shall be reimbursed’. Cartorobica therefore suggests that the following reply should be given to the third preliminary question:

‘The value of the antidumping duty expressed in the national currency used by the national customs authorities for imports during the period of validity of Regulation No 551/83 must be equal to the value of that duty at the time when it was imposed, using as the initial reference data the ratio between the US dollar and the national currency given by the rate of exchange ruling on 10 March 1983, the date on which Regulation No 551/83 entered into force’.

2. The Commission states, in observations to which the Council refers, that in the absence of specific provisions the rate used to convert the antidumping duty into the national currency must be the rate applying at the time when the goods entered into free circulation and not at the time when the regulation imposing the levy entered into force. If the latter interpretation were to be accepted, in the event of substantial depreciation of the currencies of the Member States, the antidumping duty might not be sufficient to offset the injury caused by imports of dumped products. The Commission recognizes that exchange-rate fluctuations may give rise to changes which work to the advantage or to the detriment of the exporter or importer or, conversely, of Community industry. However, the Commission points out that under Article 14 of Regulation No 3017/79 the regulations imposing antidumping duties will, where necessary, be reviewed. The Commission claims that it has never received a request to review Regulation No 551/83 on the ground that exchange rates have substantially changed. The Commission adds that in the present case the exchange-rate fluctuations have not given rise to any significant distortion of competition between undertakings in the various Member States, as is borne out by a comparison of the situation of Cartorobica with that of an importer in a Member State with a stronger currency, for example the Federal Republic of Germany. The Commission therefore proposes that the following reply should be given to the third preliminary question:

‘Regulation No 551/83 must be interpreted as meaning that the minimum prices expressed in US dollars provided for in Article 2 of that regulation must be converted into the currency of the importing Member State at the exchange rate applicable at the time when the goods enter into free circulation.’

III — Reply to the question put by the Court

The Court asked the Council and the Commission to answer the following question:

‘The last recital in the preamble to Commission Regulation (EEC) No 511/78 of 7 March 1978 imposing a provisional antidumping duty on kraftliner paper and board originating in the United States of America (Official Journal 1978, L 69, p. 9) states that the amount of the duty was fixed in the light of “the declared value of the goods” and Article 1(2) provides that “the value declared ... in accordance with Commission Regulation (EEC) No 375/69 of 27 February 1969 on the declaration of particulars relating to the value of goods for customs purposes” should be used. The last recital in the preamble to Council Regulation (EEC) No 2133/78 of 8 September 1978 imposing a definitive antidumping duty on kraftliner paper and board originating in the United States of America (Official Journal 1978, L 247, p. 22) contains the same statement as the last recital in the preamble to Regulation No 511/78: however, there is no reference in the main body of the regulation to the declared value of the goods. For its part Council Regulation (EEC) No 551/83 of 8 March 1983, which is at issue in the present case, does not contain any such reference in its preamble or in the operative part. The Commission and the Council are asked to inform the Court, within one month, of the legal conditions in which “the free-at-frontier Community price, duty-unpaid, per tonne net to the first purchaser in the customs territory of the Community” referred to in Article 2(1) of Regulation No 551/83 is to be determined, and of the exchange rate to be applied, where appropriate, to that price in order to convert it into the currency of the importing Member State.’

The Council and the Commission gave the following reply.

The determination of the ‘free-at-frontier Community price, duty-unpaid, per tonne net to the first purchaser in the customs territory of the Community’

The Council and the Commission point out that until 30 June 1980 the Community applied for the purposes of customs valuation Regulation (EEC) No 803/68 of the Council of 27 June 1968 on the valuation of goods for customs purposes (Official Journal, English Special Edition 1968 (I), p. 170), which was heavily influenced by the ‘Brussels definition’ negotiated in the Customs Cooperation Council and based on the concept of normal price.

Subsequently, Council Regulation (EEC) No 1224/80, cited above, was adopted which mirrors the customs valuation code negotiated within the framework of the General Agreement on Tariffs and Trade (GATT) and which is based essentially on the concept of the transaction value (or the price actually paid or payable by the purchaser). Thus in its antidumping regulations the Community has gradually stopped referring to customs value and now refers only to the concept of the free-at-frontier Community price, duty-unpaid, per tonne net. This change came about mainly for the following reasons.

1) Under Article 13(3) of the basic regulation, Council Regulation No 3017/79, the amount of antidumping duties may not exceed the dumping margin and should be less if such lesser duty would be adequate to remove the injury. The Council and the Commission explain that, in view of the fact that antidumping duties are calculated by expressing the dumping margin and the injury threshold as a percentage of the free-at-frontier Community price, it appears more appropriate to refer to that concept for the purpose of the application of antidumping duties. In particular in the regulation at issue in this case, the antidumping duties were determined in relation to the free-at-frontier Community price, since the minimum prices themselves were expressed by reference to the normal values on the United States market, brought up to a cif Community frontier basis (Article 2(2)).

2) The free-at-frontier Community price does not, by definition, cover the cost of transport after importation into the customs territory of the Community, whilst under Article 15 of Regulation No 1224/80 such cost is taken into consideration for calculating the customs value only if it is distinguished from the price actually paid or payable.

3) In order to prevent any price manipulation by means of financial agreements between the exporter and importer, it was thought advisable to adopt, in the context of antidumping measures, a concept of a ‘net’ price, in other words the price if payment is made within 30 days of the receipt of the goods by the first purchaser in the customs territory of the Community (see Article 2(2) of Regulation No 551/83).

Using such a provision the net price can be increased or reduced by a percentage depending on the terms of payment.

However, for the purposes of determining the customs value of goods in regard to which the price has not actually been paid at the material time for valuation, the price payable for settlement at the said time is as a general rule to be taken as the basis for customs value (see Article 2 of Commission Regulation (EEC) No 1495/80 of 11 June 1980, Official Journal L 154, p. 14). Moreover, interest payable under a financing arrangement concluded by the purchaser is not to be included in the customs value (see Article 3(c) of Regulation No 1495/80).

Determination of the exchange rate

The Council and the Commission state that, since Regulation No 551/83 contains no specific provision, the provisions in force for the application of customs duties are to apply (see the second paragraph of Article 1 of Regulation No 551/83).

Where it is necessary to convert a currency in order to determine the value for customs purposes, the rate of exchange to be used is determined by the method laid down in Article 9 of Regulation No 1224/80.

The provisions of Article 9 of Regulation No 1224/80 have been further defined by Commission Regulation (EEC) No 1766/85 of 27 June 1985 on the rates of exchange to be used in the determination of customs value (Official Journal 1985, L 168, p. 21).

The material time for valuation for customs purposes for goods declared for direct entry into free circulation is generally the date of acceptance by the customs authorities of the declarant's statement of his intention that the goods should enter into free circulation (Article l(l)(g) of Regulation No 1224/80).

F. Grévisse

Judge-Rapporteur

1 Language of the case: Italian.