Recently, the Dutch Supreme Court referred three questions to the European Court of Justice (ECJ) for a preliminary ruling. The case at issue concerns a Binding Tariff Information (BTI) that was issued in 2000 to a UKbased company (Company A) for a game console. In the first instance, the BTI was issued for Combined Nomenclature code (CN-code) 9504 1000, resulting in a customs duty rate of 2.2 percent (2000) and 1.7 percent (2001). Company A did not agree with the classification laid down in the BTI and lodged an objection letter and, subsequently, an appeal with the UK’s VAT & Duties Tribunal.
In June 2001, the UK’s VAT & Duties Tribunal granted Company A’s appeal and issued an amended BTI for the desired classification, i.e. CN-code 8471 4990, resulting in a zero percent customs duty rate for the product. Important aspect of this case is that the validity date of the amended BTI was October 19, 2000, the date on which the “first” BTI entered into force.
Company B is related to Company A. An agreement was in place between the two companies specifying that Company B was responsible for marketing, selling, and distributing the product throughout Europe. Company B lodged import declarations in The Netherlands for the same product as listed in the BTI. Although Company B itself was not in possession of a BTI for the product in question, Company B followed the classification laid down in the BTI issued to Company A. Company B lodged objections against the resulting customs assessments, inter alia referring to the appeal that was pending before the UK Tribunal.
Company B’s objections in the Netherlands were denied, after which an appeal was lodged with the Dutch customs court (the Court). First, the Court decided that the amended BTI could be applied in all EU Member States, including for imports during the period between issuance of the “first” BTI (i.e. October 19, 2000) and the amended BTI (i.e., June 12, 2001). In addition, the Court decided that Company B could not (formally) rely on the BTI as Company B was not the title-holder, nor did it serve as direct or indirect representative of Company A. However, the Court did rule that Company B could “indirectly” derive rights from the BTI, following a passage in the Dutch customs’ handbook. This passage states that if an importer refers to a valid BTI of which he is not the titleholder but lodges a customs declaration for exactly the same goods as described in the BTI, the classification should match the classification laid down in that BTI.
Both the Dutch State Secretary of Finance and Company B lodged an appeal with the Supreme Court. As the case involves interpretation of Community law, the Supreme Court decided to stay proceedings and referred the case to the ECJ for a preliminary ruling. The first question seeks clarification on whether an interested party can successfully challenge customs duties imposed by producing a BTI that was issued in another Member State and, at the time, was still subject to court proceedings but was ultimately revised. If the answer to this question is affirmative, the Supreme Court then wishes to learn whether the declarant — acting in its own name and for its own account — can successfully rely on-/derive rights from a BTI of which it is not the titleholder.
If the answer to the second question is negative, the third question seeks clarification on whether a declarant can successfully rely on national policy, i.e., written policy where national customs authorities confirm that, for classification purposes, economic operators can rely on/derive rights from a valid BTI issued to a third party for exactly the same product.
It will be quite interesting to see the outcome of this case. BTI’s have been introduced to create a level playing field for product classification. So, if a UK BTI confirms a 8471 4990 classification, it should be applicable all over Europe. This is the case for company A, per article 12 of the Community Customs Code. It would, however, be a strange situation if Company A can declare a zero percent customs duty rate for the game console if this company were to import into The Netherlands — as titleholder of the BTI — whereas the related company in the Netherlands — Company B — would have to pay customs duty upon importation of exactly the same (i.e., identical) product. Even though the BTI is not directly applicable to Company B, the BTI does provide specific guidance on the classification of the product at hand. The fact that it concerns related companies further strengthens this position.