Recent Trends Following Entry into Force of Union Customs Code (UCC)

Under EU customs law, economic operators can obtain reimbursement or remission of customs duties, broadly speaking, in three different situations:

  • Where the customs authorities committed an error which could not be detected by the importer acting in good faith.
  • Where the customs duties were not legally owed, or to use the Union Customs Code’s approach, where customs duties have been paid in excess.
  • Where it would be unjust that the importer bears the burden of customs duties. In such cases, based on equity, the importer must be in a so-called “special situation.”

The above conditions, albeit with a different wording, were already present in the previously applicable Community Customs Code. They have been widened by the administrative practice of the European Commission deciding such cases, as well as by the case law of the Court of Justice of the European Union (CJEU). The latter took the view that importers could use such provisions to obtain before the national customs authorities of the EU member states reimbursement of antidumping duties that were not legally due by arguing before customs and the judicial authorities that the underlying antidumping regulation at issue was defective.

Reimbursements have also been granted as a consequence of a review of the tariff classification of the product, as well as in cases where incorrect certificates of preferential origin were issued by third countries’ authorities or accepted by the EU customs authorities. The provisions on reimbursement add to the ones related to appeals and litigation with customs, thereby establishing a so-called “double avenue approach”: on the one hand companies can use all available appellate procedures against customs while, on the other hand, and at the same time, they can file a request for repayment and remission of duties.

The Union Customs Code has streamlined the above procedures by establishing a three-year deadline from importation (or from the further initiation of audit action by customs) to file reimbursement or remission requests.

The ruling of the CJEU on 18 January 2017 in Case C-365/15, Wortmann KG Internationale Schuhproduktionen, is of particular importance in this context. The ruling provides that where customs duties, including antidumping duties, are collected by the customs authorities of the EU member states in breach of EU law, there is an obligation on such authorities not only to reimburse such duties, but also to reimburse them with interest running from the date of payment of duties to customs by the parties involved.

Although a strict literal interpretation of both the former provisions in force and of those of the UCC would call for an outcome opposite to the above-mentioned judgment concerning interest, the CJEU’s reasoning based on general principles of EU law allowed for importers fully to recover interest.

The above demonstrates that EU customs law must be read and interpreted in light of general EU law. It also evidences that there are great opportunities for companies under the UCC provisions on repayment and remission of duties. Unfortunately, companies do not yet rely upon these provisions as they should.

For more information, contact: Jeff Snyder, John Brew, Charles De Jager

Prepared as part of our occasional collaboration with Laura Beretta and Davide Rovetta, Grayston & Co., Brussels.