Customs Duties

Question 1

Diamond Workers

Answer 1

Definition of customs duties:

“Any pecuniary charge imposed on goods by reason of the fact that they cross a frontier”

Question 2

Art 110 TFEU

Answer 2

Discriminatory internal taxation:

Discriminatory taxation is prohibited

Question 3

For a charge to escape Art 30, the service must be of 1) direct benefit to the importer (or exporter) AND
2) the charge must be proportionate to the value of the service

Answer 3

Commission v Belgium (Customs Warehouses)

Question 4

Commission v Belgium (Customs Warehouses)

Answer 4

For a charge to escape Art 30, the service must be of 1) direct benefit to the importer (or exporter) AND
2) the charge must be proportionate to the value of the service

Question 5

Direct and indirect discrimination concerning taxation

Answer 5

Direct: openly tax imported and domestic goods at different rates
Indirect: has a discriminatory EFFECT(Humblot)

Question 6

Humblot

Answer 6

Example of indirectly discriminatory taxation:
French system of annual vehicle taxation subjected lower power-rated cars to a lower tax than higher power-rated cars

HELD: such a system of domestic taxation is compatible with Art 110 only so far as it is free from any discriminatory effect

Question 7

Example of indirectly discriminatory taxation:

French system of annual vehicle taxation subjected lower power-rated cars to a lower tax than higher power-rated cars

Answer 7

Humblot
HELD: such a system of domestic taxation is compatible with Art 110 only so far as it is free from any discriminatory effect

Question 8

Example of indirectly discriminatory taxation

Answer 8

Humblot:
French system of annual vehicle taxation subjected lower power-rated cars to a lower tax than higher power-rated cars

HELD: such a system of domestic taxation is compatible with Art 110 only so far as it is free from any discriminatory effect

Question 9

Breach of article 110(2) if

• a degree of substitution between the products
• the two products are in competition

1) where one product is an acceptable substitute, it must not be subject to discriminatory tax treatment
2) just because 2 products aren’t presently in competition with another doesn’t mean they will never be

Answer 9

Commission v UK (Excise Duties on Wine)

Question 10

Commission v UK (Excise Duties on Wine)

Answer 10

Breach of article 110(2) if

• a degree of substitution between the products
• the two products are in competition

1) where one product is an acceptable substitute, it must not be subject to discriminatory tax treatment
2) just because 2 products aren’t presently in competition with another doesn’t mean they will never be

Question 11

Consequences of breaching 110(1) and 110(2)

Answer 11

110(1): equalising taxation

110(2): removal of protective element

Question 12

Definition of ‘goods’

Answer 12

Commission v Italy (Italian Art):

Anything that is capable of monetary valuation, and can be used for commercial transactions

Question 13

Article that prohibits custom duties on imports

Answer 13

Art 30 TFEU

Question 14

Art 30 TFEU

Answer 14

Prohibits custom duties on imports

Question 15

Chemial Farmateutici

Answer 15

Indirectly discriminatory taxation can be objectively justified

Question 16

Indirectly discriminatory taxation can be objectively justified

Answer 16

Chemial Farmateutici

Question 17

Commission v Italy (Italian Art)

Answer 17

Italy imposed tax on exports of artistic, historical and archeological items.

1) definition of ‘goods’: valued in money, commercial transactions
2) purpose of the restriction is irrelevant

NOTE DIFFERENCE WITH ART 34/36 - protection of culture a valid defence under Cinéthèque

Question 18

Definition of CEEs

Answer 18

Diamond Workers:
Any pecuniary charge imposed on goods by reason of the fact that they cross a frontier and which is not a customs duty in a strict sense

Question 19

Commission v Italy (Statistical Levy)

Answer 19

Definition of CEE:
a) any pecuniary charge, however small
b) whatever its designation and mode of application
c) imposed unilaterally on domestic or foreign goods
d) by reason of the fact that they crossed a frontier
e) NOT a customs duty in the strict sense
= CHARGE HAVING EQUIVALENT EFFECT

EVEN IF…

1) it is not imposed for the benefit of the State
2) it is not discriminatory in effect
3) it is not protective in effect
4) the product on which the charge is imposed is not in competition with any domestic product

Question 20

Bresciani

Answer 20

Italian inspection charge on imports of raw cowhides

HELD: even if the inspections were in general interest, treatment of imports must be equal
-> fee was invalid

Question 21

Italian inspection charge on imports of raw cowhides

HELD: even if the inspections were in general interest, treatment of imports must be equal
-> fee was invalid

Answer 21

Bresciani

Question 22

Bauhuis v Netherlands (1977)

Answer 22

A fee for health inspections is acceptable if EU law requires so, provided it covers the actual cost incurred only

Question 23

A fee for health inspections is acceptable if EU law requires so, provided it covers the actual cost incurred only

Answer 23

Bauhuis v Netherlands (1977)

Question 24

A charge on imports will not be a CEE if it is :

1) part of a general system of non-discriminatory internal charges = TAX UNDER ARTICLE 110
2) a payment for service
OR
3) designed to fulfil EU law obligations

Answer 24

Commission v Germany (Live Animal Vet Charge)

Question 25

Commission v Germany (Live Animal Vet Charge)

Answer 25

Firstly,
A charge will not be a CEE if it is

1) a part of general system of non-discriminatory internal charges
2) a payment for service OR
3) designed to fulfill EU obligations

Secondly,
Where inspections are made pursuant to EU measure, they are not CEEs if

• they do not exceed actual costs of inspection
• the inspections are obligatory and uniform
• they’ve been prescribed by EU law in the general interests of the community
• they promote the free movement of goods

Question 25

Where inspections are made pursuant to EU measure, they are not CEEs if

• they do not exceed actual costs of inspection
• the inspections are obligatory and uniform
• they’ve been prescribed by EU law in the general interests of the community
• they promote the free movement of goods

Answer 25

Commission v Germany (Live Animal Vet Charge)

Question 26

If inspections are prescribed by EU law, what are the conditions for the fee not to be a CEE?
Which case?

Answer 26

Commission v Germany (Live Animal Vet Charge): Where inspections are made pursuant to EU measure, they are not CEEs if

• they do not exceed actual costs of inspection
• the inspections are obligatory and uniform
• they’ve been prescribed by EU law in the general interests of the community
• they promote the free movement of goods

Question 27

Commission v Italy (Regenerated Oil)

Answer 27

EXAMPLE OF DIRECT TAX DISCRIMINATION
Italian government had a policy of charging lower taxes on regenerated oil than on normal oil. This was only available to DOMESTIC oil producers.
-> Italian government argued that it wouldn’t be able to find out if imported oil was regenerated or not
-> defence failed.

The tax was held to be directly discriminatory against foreign regenerated oil, and was therefore a breach of Article 110 (1)

Question 28

Example of direct tax discrimination

Answer 28

Commission v Italy (Regenerated Oil)

Italian government had a policy of charging lower taxes on regenerated oil than on normal oil. This was only available to DOMESTIC oil producers.

• > Italian government argued that it wouldn’t be able to find out if imported oil was regenerated or not
• > defence failed.

The tax was held to be directly discriminatory against foreign regenerated oil, and was therefore a breach of Article 110 (1)

Question 29

Commission v Ireland (Excise Duty on Spirits)

Answer 29

Domestic producers allowed to defer payment until sale whereas importers had to pay upon import

Ireland argued:

• rate was the same
• Ireland already at competitive disadvantage owing to the pegging of Irish Pound to GBP

HELD: such deferral was prohibited
Article 110 prohibits not only discriminatory tax rates but also favourable terms on how payment is made

Question 30

Article 110 prohibits not only discriminatory tax rates but also favourable terms on how payment is made

Answer 30

Commission v Ireland (Excise Duty on Spirits)

Question 31

Commission v France (Higher Duty on Grain Spirits)

Answer 31

Higher tax on Grain Spirits than those based on wine or fruit (France produces very little of grain spirits but lots of wine and fruit based)

HELD: discriminating in favour of French products

1) similarity test: do the products have similar characteristics and meet the same needs from a customer’s point of view?
- if yes, discrimination is prohibited

2) competition test: even if the goods are not similar within the meaning of Art 110(1), if they are in competition with each other, even “partial, indirect or potential” with domestic products, discriminatory taxation is prohibited where it has a protective effect

Question 32

Competition test

Answer 32

Commission v France (Higher Duty on Grain Spirits):
Even if the goods are not similar within the meaning of Art 110(1), if they are in competition with each other, even “partial, indirect or potential” with domestic products, discriminatory taxation is prohibited where it has a protective effect

Question 33

Similarity test

Answer 33

Commission v France (Higher Duty on Grain Spirits):
do the products have similar characteristics and meet the same needs from a customer’s point of view?
- if yes, discrimination is prohibited

Question 34

Commission v Greece (Car Tax)

Answer 34

Greek car tax bands:
A) below 1200cc
B) 1201cc-1800cc
C) 1801cc+
-> Commission argues that it is discriminatory as no Greek cars breach 1800cc.

HELD: the Commission didn’t show how the regime favoured domestic cars

DISTINCT FROM HUMBLOT on the basis of objective criteria!

Somewhat comparable to mandatory requirements

Question 35

Commission v Denmark (Car Registration Duty)

Answer 35

Where a used car is imported, value is deemed to be:

• 100% of the new value if less than 6m old
• 90% of the new value if greater than 6m old

HELD
Discriminatory as there was no infringement for new cars and because the duty was calculated on the basis of artificially high valuations for used cars