The Customs court in Haarlem (“Customs court”) has recently upheld the applicability of the principle of equal treatment in relation to a Binding Tariff Information (“BTI”) ruling issued in The Netherlands which was conflicting with a BTI-ruling issued in Slovenia for the same product.
The dispute concerned two conflicting BTI-rulings, which have been issued in The Netherlands and Slovenia, in relation to the same product, namely an XX daylight-system. The conflicting BTI-rulings classified the XX daylight-system differently in the Combined Nomenclature (“CN”).
The customs authorities in The Netherlands issued a BTI-ruling concluding that the XX daylight-system was to be classified under CN code 9013 8090. The plaintiff disagreed and argued, in the action brought before the Customs court, that the appropriate CN classification should be CN code 9405 5000 90 by referring to the BTI-ruling issued by the Slovenian customs authorities which classified the XX daylight-system under CN code 9405 5000 90.
During the proceedings before the Customs court, the plaintiff raised pleas on the basis of the principle of protection of legitimate expectations, principle of legal certainty and principle of equal treatment. With regard to the principle of equal treatment, the plaintiff stated that the reasoning behind the initiative to start proceedings before the Customs court was based on the fact that the plaintiff was confronted with importers/customs agents who imported the same product, for which the plaintiff had the exclusive rights, in Member States other than the Benelux, for using the BTI-ruling issued by the Slovenian customs authorities.
This article will not cover all the aspects of the judgment. Instead, we provide a synopsis of the Customs court’s conclusions with regard to the principle of equal treatment.
The judgment of the Customs court
Firstly the Customs court tackled the CN classification of the XX daylight-system. The Customs court determined that, on the basis of the objective characteristics of the XX daylight-system and Commission Regulation (EC) No 457/2008 concerning the classification of certain goods in the CN, the XX daylight-system was to be classified under CN code 9013 8090.
Secondly, the Customs court dismissed plaintiff’s arguments based on the principles of the protection of legitimate expectations and the principle of legal certainty.
However, the Customs court did uphold the applicability of the principle of equal treatment by determining that there was a breach of the principle of non-discrimination, as established in Community law. The non-discrimination principle stipulates that, without prejudice to an objective justification, equal situations are not to be treated differently and different situations are not to be treated equally. In that regard, the Customs court found it plausible that:
“The plaintiff has unequivocally stated that he was told at several meeting occasions of the said importers that, in relation to the releasing of the product in free circulation, the product at issue was to be classified under CN code 9405.5000. The plaintiff has found in the European BTI database (EBTI) the BTI-ruling issued by the Slovenian customs authorities in which the product at issue was classified under CN code 9405.5000.”
Moreover, the Customs court stated that the XX daylight-system was imported during the same period by others than the plaintiff, in Member States other than Benelux, in which cases the XX daylight-system was classified under CN code 9405.5000. In that regard, the Customs court assumed that the BTI-ruling was used by its stated holder.
Consequently, the Customs court referred to Article 9 of Regulation (EEC) No 2454/93 laying down provisions for the implementation of the Community Customs Code (“IPCCC”) which comprises a procedure for uniform application of the CN in regard to conflicting BTI-rulings relating to the same product. With that regard, the Customs court took the view that, considering that this procedure encompasses a time period of one to two months before the item is placed on the agenda of the Committee and another six months before a measure is adopted for uniform application of the CN, this specific procedure cannot prevent that during a certain period of time equal cases can be treated differently in Member States, which is exactly the situation in the case at hand.
In this connection, the Customs court found that in this case there is no objective justification for the different treatment of the equal cases considering that the Slovenian customs authorities have not initiated the procedure laid down in Article 9 of IPCCC. The Slovenian customs authorities could have consulted the EBTI beforehand and concluded that the Dutch customs authorities issued a BTI-ruling for the XX daylight-system under CN code 9013 8090. Accordingly, if the Slovenian customs authorities would have disagreed with the Dutch BTI-ruling, then the Slovenian customs authorities could have suspended the issuance of their own BTI-ruling for the XX daylight-system under CN code 9405 5000 and could have started the procedure under Article 9 of IPCCC. This course of action could have prevented a breach of the rule that equal cases are to be treated equally. Taking this into account, the Customs court concluded that this course of action was not initiated as a result of which there is no objective justification for different treatment in the case at issue.
The judgment of the Customs court is of importance considering that a plea on the basis of the principle of equal treatment can succeed in relation to conflicting BTI-rulings which have been issued in different Member States for the same product.
However, this is to be determined on a case-by-case basis by establishing a breach of the principle of non-discrimination, as provided for in Community law, without having an objective justification.
Such an objective justification can rise if one of the Member States initiated the procedure laid down in Article 9 of IPCCC in relation to conflicting BTI-rulings. This course of action would justify that equal cases be treated differently.
Thus, a plea to the principle of equal treatment, in relation to conflicting BTI-rulings, can succeed if there is, without prejudice to an objective justification, a breach of the principle of non-discrimination as established in Community law.