Recently, the ECJ ruled in a case involving a Binding Tariff Information (BTI) that was applied by an economic operator, not being the title holder. A BTI is a tariff classification ‘ruling’, issued by the customs authorities of one of the 27 European Union (EU) Member States. A BTI is issued upon request and is legally binding on the customs authorities in all EU Member States for a period of six years. A BTI promotes the uniform application of customs policy and also helps ensure that a correct duty (rate) is levied upon importation.
The case: Sony Computer Entertainment Europe Ltd. (SCEE), based in the UK, was in possession of a BTI for one of their game consoles. Sony Supply Chain Solutions (SLE), part of the same group of companies, performed logistic services on behalf of SCEE, including lodging customs declarations for said products in The Netherlands. SLE lodged the customs declarations in its own name and on its own behalf. SLE applied a BTI2 that was issued to SCEE.
It is worth mentioning that the Dutch customs handbook contained a passage on BTI applicability, even for nontitle holders, if the exact same goods are imported as described in the BTI. SLE initially declared the classification code that was laid down in the first BTI issued to SCEE, i.e., CN-code 9504 1000. This classification resulted in payment of customs duty. SLE objected (and subsequently appealed) against the additional assessment raised by Dutch customs and referred to the SCEE proceedings before the English court. Pursuant to an amended BTI issued to SCEE for CN-code 8471 4990 (customs duty: zero percent), the Dutch customs court ruled that SLE could rely on the amended BTI issued to SCEE, also for customs declarations submitted in the period between issuance of the ‘first’ BTI and issuance of the amended BTI.
Pursuant to the Dutch court’s decision, the Dutch State Secretary brought an appeal in cassation before the Dutch Supreme Court. As the Supreme Court had doubts regarding inter alia the value of the amended BTI in the period between issuance of the first BTI and the amended BTI, the Supreme Court decided to stay proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘1. Must Community law, and in particular Article 12(2) and (5) and Article 217(1) of the [Customs Code] and Article 11 of the [implementing regulation], in conjunction with Article 243 of the [Customs Code], be interpreted to mean that a person involved in proceedings concerning customs duties which have been imposed may challenge their imposition by producing binding tariff information issued in another Member State for the same goods, which information was still the subject of a legal dispute at that time, but was eventually revised?
2. If the answer to Question 1 is in the affirmative, can the person declaring the goods to customs in his own name and for his own account successfully rely in a case such as this, when making customs declarations for release for free circulation, on binding tariff information whose holder is not that person, but an associated firm on whose instructions that person made the customs declarations?
3. If the answer to Question 2 is in the negative, does Community law preclude a person in a case such as this from successfully relying on a national policy decision in which the national authorities raise the expectation that, in respect of the tariff classification of the goods declared, it can rely on tariff information issued to a third party for the same goods?’
In its decision, the ECJ first considered the second question. After an assessment of the relevant legal provisions, the ECJ concluded that a person who makes customs declarations in his own name and on his behalf cannot rely on a BTI of which he is not the title holder, even when this person acted on the instructions of the holder. According to the ECJ, SLE did not act as representative within the meaning of article 5 of Regulation (EEC) 2913/92. Hence, SLE could not rely on the BTI issued to SCEE.
On the first question, the ECJ ruled that even though a BTI can only be applied by a title holder (or its representative) vis-à-vis the EU customs authorities, a BTI may be relied on as evidence by a person other than the holder of that BTI. In addition, the national courts should take particular care in its assessment when determining the correct application of the CN. In sum, a BTI issued in respect of the same goods in another Member State may be submitted as evidence by a non-title holder, although the BTI itself can provide no legal ‘protection’. It is up to the national courts to determine whether or not the relevant procedural rules of the Member State concerned allow for the possibility of producing such type of evidence.
As to relying on national policy (question 3), the ECJ concluded that the Dutch customs authorities acted in a manner inconsistent with EU law. In view of the ECJ, the Dutch customs authorities attributed the same legal value to a BTI, issued for exactly the same goods, for both title holders and — indirectly — non-title holders. Per the ECJ decision, this approach could not give rise to a legitimate expectation, on part of the traders, that they could rely on that policy.
Especially the answers to questions 2 and 3 should be carefully considered by companies importing goods into the EU. If your company appointed a customs agent to fulfill the import formalities and no form of representation is in place, the customs agent can — at the moment of import — not apply BTIs issued to your company. However, if the classification is challenged by local customs authorities, the BTIs can — subject to conditions — be submitted as evidence in subsequent legal proceedings. As discussed in previous editions of this newsletter, a BTI has proven to be a useful means whereby economic operators can obtain certainty on the tariff classification of their goods before decisions on imports are taken. It promotes uniform tariff classification throughout the EU, thus creating a level playing field. Given the recent ECJ decision, it is recommendable to analyze the current import procedures and make sure that BTIs can be rightfully invoked.