Wuensche Handelsgesellschaft International GmbH & Co. KG v Hauptzollamt Hamburg-Jonas. (Common Customs Tariff) [1992] EUECJ C-21/91 (4 June 1992)

Judgment 1 By order of 26 October 1990, which was received at the Court on 23 January 1991, the Finanzgericht (Finance Court) Hamburg referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two questions on the interpretation of Article 3 of Commission Regulation (EEC) No 1495/80 of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes, in its original version (OJ 1980 L 154, p. 14) and as amended by Commission Regulation (EEC) No 220/85 of 29 January 1985 (OJ 1985 L 25, p. 7). 2 Those questions were raised in the course of proceedings between Wuensche Handelsgesellschaft International GmbH & Co. ("Wuensche") and the Hauptzollamt (Principal Customs Office) Hamburg-Jonas relating to the calculation of the customs value of various consignments of goods which Wuensche imported and put into free circulation within the Community between 1983 and 1985. 3 The purchase contracts for the consignments of goods allowed Wuensche 180 days from the date of loading of the goods on board a ship, in which to pay. Some contracts contained a clause specifying that an additional 4% of the FOB purchase price was payable in respect of such deferred payment. The invoices from the suppliers indicated the purchase price and a separate item, described as "financing costs", corresponding to 4% of the invoice price. 4 Wuensche declared the customs value of the imported goods on the basis of the suppliers' invoices. However, it did not include the "financing costs" in its declarations, on the ground that those costs were "interest payable under a financing arrangement" within the meaning of Article 3 of Regulation No 1495/80. 5 Article 3(c) of the original version of Regulation No 1495/80 laid down that "interest payable under a financing arrangement relating to the purchase of the imported goods" was not to be included in the customs value provided that it was distinguished from the price actually paid or payable. Following its amendment by Regulation No 220/85, Article 3(2) of Regulation No 1495/80 provides: "Charges for interest under a financing arrangement entered into by the buyer and relating to the purchase of imported goods shall not be included in the customs value determined under Regulation (EEC) No 1224/80 provided that: (a) the charges are distinguished from the price actually paid or payable for the goods; (b) the financing arrangement has been made in writing; (c) where required, the buyer can demonstrate that: ° such goods are actually sold at the price declared as the price actually paid or payable, and ° the claimed rate of interest does not exceed the level for such transactions prevailing in the country where, and at the time when, the finance was provided." 6 By virtue of Article 2(2) of Regulation No 220/85, the provisions of Article 3(c) of the original version of Regulation No 1495/80 continue to apply to goods for which the material time for valuation for customs purposes is prior to 1 March 1985. In the present case, the material time for valuation for customs purposes of the goods imported by Wuensche is prior to that date for part of the goods only. 7 The Hauptzollamt Hamburg-Jonas considered that the interest paid by Wuensche in respect of the concession of deferred payment was not "interest payable under a financing arrangement" within the meaning of Article 3 of Regulation No 1495/80, in its original version or as amended, and it requested payment of customs duty on that interest. 8 Wuensche appealed to the Finanzgericht Hamburg against the decision of Hauptzollamt Hamburg-Jonas. The Finanzgericht Hamburg had doubts as to the correct interpretation of Article 3 of Regulation No 1495/80, in its original version and as amended, and decided to stay the proceedings pending a preliminary ruling by the Court on the following questions: "Must Article 3 of Regulation (EEC) No 1495/80 be interpreted as meaning that there is a 'financing arrangement relating to the purchase of the imported goods' if the seller allows the buyer time for payment for which a purchase price increased by interest is agreed? In that respect is Article 3(2) of Regulation (EEC) No 1495/80 as amended by Regulation (EEC) No 220/85 to be interpreted in the same manner as Article 3(c) of Regulation (EEC) No 1495/80 in its original version?" 9 Reference is made to the Report for the Hearing for a fuller account of the facts of the case in the main proceedings, the relevant legislation, the procedure and the written observations submitted to the Court, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court. The second question 10 Since the reply to the first question may depend on the reply to the second question, the second question should be considered first. 11 By the second question, the national court wishes to ascertain, in substance, whether the expression "financing arrangement" used in Article 3(2) of Regulation No 1495/80 as amended by Regulation No 220/85 is to be interpreted in the same manner as the expression "financing arrangement" used in Article 3(c) of the original version of Regulation No 1495/80. 12 In that connection, it should be noted that both Article 3(c) of the original version of Regulation No 1495/80 and Article 3(2) of Regulation No 1495/80 as amended by Regulation No 220/85 provide that interest payable under a financing arrangement relating to the purchase of imported goods is not to be included in the customs value of goods. 13 The changes made by Regulation No 220/85 to the provisions of Article 3 of Regulation No 1495/80 relate to the formal conditions governing the exclusion of interest from customs value, and to the evidence which the buyer may be required to produce in order to preclude any possibility of fraud in the declaration of the customs value of imported goods. Such changes cannot affect the interpretation to be given to the expression "financing arrangement" as it appears in both the original and amended versions of Article 3 of Regulation No 1495/80. 14 Accordingly, the reply to the national court' s second question should be that the expression "financing arrangement" used in Article 3(2) of Commission Regulation (EEC) No 1495/80 of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes, as amended by Commission Regulation (EEC) No 220/85 of 29 January 1985 is to be interpreted in the same manner as the expression "financing arrangement" in the original version of Article 3(c) of Regulation No 1495/80. The first question 15 It should be noted that, under Article 3(1) of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes (OJ 1980 L 134, p. 1), the customs value of imported goods is, in principle, "the transaction value, that is, the price actually paid or payable for the goods when sold for export to the customs territory of the Community, adjusted in accordance with Article 8". 16 It follows from that definition that, subject to the adjustments provided for in Article 8 of Regulation No 1224/80, payment for services provided to the buyer on the purchase of imported goods is not included in the customs value of the goods. Article 3 of Regulation No 1495/80 confirms that principle and specifies how it is to be implemented with regard to financing services. 17 In that connection, it should be noted that Article 3 of Regulation No 1495/80 refers, in a general way, to interest payable under a financing arrangement for the purchase of imported goods. The deferred payment allowed by the seller of the imported goods to the buyer constitutes, in principle, a "financing arrangement" within the meaning of that article. 18 Furthermore, Article 3(4) of Regulation No 1495/80 as amended by Regulation No 220/85 specifies that charges for interest under a financing arrangement relating to the purchase of imported goods are not to be included in the customs value even where the finance is provided by the seller himself. Finance provided by a seller of goods for the purchase of those goods generally consists of allowing the buyer time to pay for the goods in question. Accordingly, in the absence of any provision to the contrary, it must be considered that where a seller of goods allows the buyer time to pay, that constitutes a "financing arrangement" within the meaning of Article 3 of Regulation No 1495/80 as soon as the buyer accepts the deferred payment. 19 In that connection, it is not necessary for the deferred payment to be the subject of a specific agreement between the seller and the buyer, separate from the agreement relating to the sale of the imported goods. Article 3 of Regulation No 1495/80, both in its original version and as amended by Regulation No 220/85, requires the charges for interest under a financing arrangement to be distinguished from the price actually paid or payable for the imported goods. Where charges for interest payable as consideration for the deferred payment agreed by the seller are a separate item on the invoice sent to the buyer, it must be considered that, where there is no objection on the part of the buyer, he has in effect agreed to the charges for interest relating to the deferred payment. 20 Lastly, it should be noted that the changes made by Regulation No 220/85 to the provisions of Article 3 of Regulation No 1495/80 ensure that the customs value of goods cannot be artificially reduced by means of a fictional increase in the amount of interest payable to the seller under a financing arrangement relating to the purchase of goods. It is true that, under Article 2(2) of Regulation No 220/85, Article 3(c) of the original version of Regulation No 1495/80 continues to apply to goods for which the material time for valuation for customs purposes is prior to 1 March 1985. However, in order to determine the customs value of those goods, the customs authorities of the Member States may, under Article 10(1) of Regulation No 1224/80, require the buyer to supply information similar to that referred to in Article 3(2)(c) of Regulation No 1495/80 as amended by Regulation No 220/85. 21 It is for the national court, if it considers it necessary, to verify whether the conditions laid down in Article 3(2)(c) of Regulation No 1495/80, as amended, are fulfilled. 22 The reply to the national court' s first question should therefore be that Article 3 of Commission Regulation (EEC) No 1495/80 of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes is to be interpreted as meaning that the words "interest payable under a financing arrangement" refer also to the interest payable as a result of time allowed by the seller and accepted by the buyer, for payment for imported goods. Costs 23 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Sixth Chamber), in answer to the questions referred to it by the Finanzgericht Hamburg, by order of 26 October 1990, hereby rules: 1. The expression "financing arrangement" used in Article 3(2) of Commission Regulation (EEC) No 1495/80 of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purposes, as amended by Commission Regulation (EEC) No 220/85 of 29 January 1985 is to be interpreted in the same manner as the expression "financing arrangement" in the original version of Article 3(c) of Regulation No 1495/80. 2. Article 3 of Commission Regulation (EEC) No 1495/80 of 11 June 1980 implementing certain provisions of Articles 1, 3 and 8 of Council Regulation (EEC) No 1224/80 on the valuation of goods for customs purpose is to be interpreted as meaning that the words "interest payable under a financing arrangement" refer also to the interest payable as a result of time allowed by the seller and accepted by the buyer for payment for imported goods. © European Communities, 2001 All rights reserved BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII