C-210/91 Commission v Greece

Judgment of the Court of 16 December 1992. - Commission of the European Communities v Hellenic Republic. - Failure to fulfil obligations - Temporary importation arrangements for travellers' personal effects. - Case C-210/91. European Court reports 1992 Page I-06735

Summary Parties Grounds Decision on costs Operative part

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1. Actions against Member States for failure to fulfil obligations ° Reasoned opinion ° Application originating proceedings ° Same arguments and pleas in law

(EEC Treaty, Art. 169)

2. Common Customs Tariff ° Temporary importation with relief from duties ° Travellers' personal effects ° Competence of the Member States to impose penalties for offences ° Limits ° Compliance with the principle of proportionality

(Council Regulation No 3599/82, Arts 2(2) and 19)

3. Actions against Member States for failure to fulfil obligations ° Evidence of the infringement ° Burden on the Commission

(EEC Treaty, Art. 169)

1. An application brought under Article 169 of the Treaty can be based only on the arguments and pleas in law already set out in the reasoned opinion.

2. In the absence of harmonization of Community legislation in the field of offences committed in the context of the Community temporary importation arrangements for travellers' personal effects, the Member States are competent to adopt such penalties as appear to them to be appropriate. When making use of that competence they are, however, required to comply with Community law and its general principles, and consequently, the principle of proportionality. In that respect, the administrative measures or penalties must not go beyond what is strictly necessary for the objectives pursued and the control procedures must not be accompanied by a penalty which is so disproportionate to the gravity of the infringement that it becomes an obstacle to the freedoms enshrined in the Treaty.

3. Where, in proceedings based on Article 169 of the Treaty, the Commission requests the Court to declare that a Member State has failed to fulfil its obligations under the Treaty, it is for the Commission itself to adduce evidence of the alleged infringement.

In Case C-210/91,

Commission of the European Communities, represented by Maria Patakia and Maria Blanca Rodriguez Galindo, of its Legal Service, with an address for service in Luxembourg at the office of R. Hayder, of its Legal Service, Wagner Centre, Kirchberg,

applicant,

v

Hellenic Republic, represented by Fokion Georgakopoulos, Assistant Legal Adviser to the Council of State, with an address for service in Luxembourg at the Greek Embassy, 117 Val Sainte-Croix,

defendant,

APPLICATION for a declaration that, by imposing on a tourist entitled to benefit from the Community temporary importation arrangements in respect of the personal effects which he was carrying in his car a fine calculated on the basis of the taxes and duties applicable to an item which he had failed to declare, even though the false declaration of which he was guilty could not have deprived the State of any taxes and duties in view of the fact that the video camera in question was part of his personal effects, the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty,

THE COURT,

composed of: O. Due, President, C.N. Kakouris, M. Zuleeg and J.L. Murray (Presidents of Chambers), G.F. Mancini, J.C. Moitinho de Almeida, F. Grévisse, M. Diez de Velasco and P.J.G. Kapteyn, Judges,

Advocate General: C. Gulmann,

Registrar: L. Hewlett, Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the parties at the hearing on 24 June 1992, at which the Commission was represented by D. Gouloussis, of its Legal Service, acting as Agent, and the Hellenic Republic by F. Georgakopoulos, acting as Agent,

after hearing the Opinion of the Advocate General at the sitting on 15 September 1992,

gives the following

Judgment

Grounds

1By application lodged at the Court Registry on 7 August 1991, the Commission of the European Communities brought an action pursuant to Article 169 of the EEC Treaty for a declaration that, by imposing on a tourist entitled to benefit from the Community temporary importation arrangements in respect of the personal effects which he was carrying in his car a fine calculated on the basis of the duties and taxes applicable to an article which he had failed to declare, even though the false declaration of which he was guilty could not have deprived the State of any taxes and duties in view of the fact that the video camera in question was part of his personal effects, the Hellenic Republic had failed to fulfil its obligations under the Treaty.

2Under Article 19 of Council Regulation (EEC) No 3599/82 of 21 December 1982 on temporary importation arrangements (OJ 1982 L 376, p. 1), the benefit of temporary importation arrangements with total relief from import duties is to be granted in respect of the personal effects which travellers are carrying on their person for the duration of their stay in the customs territory of the Community. Article 2(2) of that regulation states that the competent authorities "shall take all measures which they consider necessary to ensure that the goods can be identified and that the use to which they are put can be verified". In addition, under Article 12 of Commission Regulation (EEC) No 1751/84 of 13 June 1984 laying down certain provisions for the application of Council Regulation (EEC) No 3599/82 on temporary importation arrangements (OJ 1984 L 171, p. 1), personal effects are to be allowed the benefit of temporary importation, without a written declaration, under the conditions laid down by the competent authorities.

3That provision thus does not exclude the possibility of the said authorities requiring an oral declaration.

4It is apparent from the documents before the Court that on 22 March 1989 a German citizen crossed the frontier between Yugoslavia and Greece in his car, at the Evzoni border post. As he entered Greece, a customs official asked him in English and German whether he had anything to declare, in particular electronic or video equipment or cameras. The traveller answered in the negative. The official nevertheless proceeded to examine the vehicle and the objects in it. In so doing he found a video camera whose customs status could not be established. The German tourist claimed that the camera was placed visibly in the back of the car, whereas the customs official considered that it had been "carefully concealed".

5The Greek customs authorities considered that the tourist' s behaviour constituted a customs offence (false declaration) and fined him DR 404 800, that being twice the amount of the customs duties and taxes chargeable on lawful importation of the goods in question. Doubling the applicable duties and taxes is the minimum penalty laid down by Greek law for making a false declaration.

6The Commission considered that the penalty imposed was disproportionate to the offence committed and consequently was liable to jeopardize the application of the Community temporary importation arrangements on a total relief basis for travellers' personal effects, and brought the present action for failure to fulfil obligations.

7Reference is made to the Report for the Hearing for a fuller account of the facts of the case, the procedure and the pleas and arguments of the parties, which are mentioned or discussed hereinafter only in so far as is necessary for the reasoning of the Court.

8In its application, the Commission argues firstly that it initiated the procedure for failure to fulfil obligations on the grounds that the penalty imposed by the Greek customs authorities in this case was part of an administrative practice and the case of the German tourist was therefore not an isolated one.

9The Hellenic Republic contends that that complaint does not appear in the letter of formal notice or the reasoned opinion, and that it must consequently be declared inadmissible.

10In this respect, it should first be noted that, as the Court has consistently held (see, inter alia, Case C-347/88 Commission v Greece [1990] ECR I-4747, paragraph 16), an application brought under Article 169 of the EEC Treaty may be based only on the arguments and pleas in law already set out in the reasoned opinion.

11It should next be observed that both at the stage of the letter of formal notice and at the stage of the reasoned opinion the Commission' s intention was to base its contention that there had been a breach of Community law by the Hellenic Republic on the particular case of the fine imposed on the German tourist in question. There was no allusion to any administrative practice or any direct or indirect reference to other similar situations; nor were the provisions of national law relating to the offence challenged, even implicitly.

12The complaint concerning an administrative practice must consequently be declared inadmissible. The merits of the present application must therefore be examined solely with respect to the fine imposed in the particular case by the Greek customs authorities.

13The Commission submits, secondly, that the amount of the fine imposed on the German tourist by the Greek authorities was disproportionate to the seriousness of the offence, and that the fine therefore constitutes a breach of the principle of proportionality as defined in the Court' s case-law.

14The Commission argues in this respect that the facts of the case allow the conclusion that the conduct of the German tourist was merely a technical breach of a customs rule, which could not be punished by a fine exceeding the value of the goods in question.

15The Hellenic Republic disputes the Commission' s analysis, maintaining that it is based essentially on the Commission' s subjective interpretation of the German tourist' s attitude and in particular on its assessment of the degree of his guilt, the seriousness of his offence and the intent demonstrated by his attitude; the Commission' s conclusions in this respect have in no way been established, however.

16In any event, the Hellenic Republic contends that the assessment of the facts is a matter exclusively for the competent national authorities of each Member State, subject to review by the national courts.

17In that respect, it states that the competent national authorities regarded the tourist' s behaviour not as a mere case of "non-declaration" as a result of a misunderstanding but rather as a deliberate attempt to import illegally a high-value article on which a high amount of duty was payable. The fine was imposed on that basis; its amount was calculated in accordance with the national legislation in force, in view of the lack of Community harmonization in the field of customs offences.

18The Hellenic Republic maintains, finally, that the penalty in question was appropriate to the gravity of the offence which had been established, and consequently did not constitute a breach of the principle of proportionality.

19It should be noted firstly that in the absence of harmonization of Community legislation in the field of customs offences, the Member States are competent to adopt such penalties as appear to them to be appropriate (see, inter alia, Case 50/76 Amsterdam Bulb v Produktschap voor Siergewassen [1977] ECR 137, paragraph 33, and Case 240/81 Einberger v Hauptzollamt Freiburg [1982] ECR 3699, paragraph 17). When making use of that competence they are, however, required to comply with Community law and its general principles, and consequently, with the principle of proportionality.

20As the Court has repeatedly held, the administrative measures or penalties must not go beyond what is strictly necessary for the objectives pursued and the control procedures must not be accompanied by a penalty which is so disproportionate to the gravity of the infringement that it becomes an obstacle to the freedoms enshrined in the Treaty (see, inter alia, Case 203/80 Casati [1981] ECR 2595, paragraph 27; Joined Cases 286/82 and 26/83 Luisi and Carbone v Ministero del Tesoro [1984] ECR 377; and Case 68/88 Commission v Greece [1989] ECR 2965).

21It must next be examined whether, as the Commission maintains, the fine imposed on the German tourist by the Greek authorities was so disproportionate to the gravity of the offence that it was such as to jeopardize the system of temporary importation arrangements for travellers' personal effects.

22It should be recalled in that respect that when the Commission requests the Court to declare that a State has failed to fulfil its obligations under the Treaty, it is for the Commission itself to adduce evidence of the alleged infringement (judgment in Case C-249/88 Commission v Belgium [1991] ECR I-1275, paragraph 6).

23The Commission asserts that the tourist in question was guilty only of a technical infringement of a customs rule, that the Greek customs authorities did not make a correct assessment of his intentions and that consequently the fine which they imposed on him was disproportionate. The Court finds, however, that those assertions are not supported by any evidence whatever. Consequently, the Commission' s arguments are based entirely on suppositions, which cannot be taken into account in considering the application.

24The application must consequently be dismissed.

Costs

Costs

25Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs. Since the Commission has been unsuccessful, it must be ordered to pay the costs.

Operative part

On those grounds,

THE COURT

hereby:

1. Dismisses the application;

2. Orders the Commission to pay the costs.

OPINION OF ADVOCATE GENERAL

GULMANN

delivered on 15 September 1992 ( *1 )

Mr President,

Members of the Court,

1The Commission has brought this case against the Hellenic Republic pursuant to Article 169 of the EEC Treaty.

2The Community rules necessary for an understanding of the legal background to this action for infringement of the Treaty are to be found in Council Regulation (EEC) No 3599/82 of 21 December 1982 on temporary importation arrangements ¹ and in the Council's Seventeenth VAT Directive of 16 July 1985. ² The relevant rules are set out in the Report for the Hearing. It is clear that

persons can import personal effects temporarily without having to pay tax and other duties when the person in question intends to re-export those effects;

the national authorities are not entitled to demand a written statement of effects but they may question the traveller for the purpose of checking that the conditions for tax exemption are satisfied.

3In its application the Commission set out the facts giving rise to the case as follows:

‘As a result of a petition addressed to the European Parliament the Commission's attention was drawn to the following facts:

On 22 March 1988 a German citizen crossed in his motor vehicle the frontier between Yugoslavia and Greece at the Evzoni checkpoint. When he entered Greece a customs officer asked him in English and German (according to the officer's statement) whether he had anything to declare, mentioning in particular electronic or video material and binoculars. The traveller replied in the negative. The officer nevertheless proceeded to search the car and its contents. He then discovered a video camera, the customs status of which (non-member country or Community product) it was not possible to establish. The German tourist claims that the camera was quite visible, lying in the back of the car, whereas the customs officer believes that it was “carefully disguised”.

The Greek customs regarded this conduct by the tourist to be a customs offence (a false declaration). On the basis of the camera's value it assessed customs duty and tax applicable at DRS 197070. Accordingly it fined the tourist double that amount. The doubling of the taxes and duties applicable constitutes the minimum penalty under Greek law for a false declaration. The German tourist was obliged to pay the fine which, after stamp duty was added, amounted to DR 404800. He appealed to the European Parliament because he considers the fine imposed on him to be unwarranted.’

4On that basis the Commission claims that the Court should

‘declare that by imposing on a tourist entitled to benefit from the Community temporary import arrangements in respect of the personal effects which he was carrying in his car a fine calculated on the basis of the taxes and duties applicable to an item which he had failed to declare, even though the false declaration of which he was guilty could not have deprived the State of any taxes and duties in view of the fact that the video camera was among the personal effects of the person in question, the Hellenic Republic has failed to fulfil its obligations under the EEC Treaty.’

5The Commission has claimed that the case in question is the result of an administrative practice. That submission should, however, be rejected. The submission was first made in the application and according to the Court's settled case-law no submission can be taken into account which was not made in the preceding administrative procedure. ³ Furthermore, the Commission's claim clearly concerns the legality under Community law of a specific legal act and the Commission does not otherwise seek to substantiate it.

6Accordingly the question for the Court to decide is solely whether the Greek authorities' conduct in the specific case constitutes a failure on the part of Greece to fulfil its obligations under Community law.

The Commission founds its claim on the fact that the video camera formed part of the tourist's personal effects and could therefore be imported without payment of any taxes or duties; hence the incorrect declaration was not intended to avoid payment of those taxes. Accordingly in the Commission's opinion the declaration was ‘a purely technical infringement’ of the Greek rules in force. On that basis the Commission claims that the fine imposed constitutes a breach of the principle of proportionality which, under Community law, applies when national authorities exercise the powers of control and sanction which they enjoy in connection with the administration of the applicable Community rules.

At first sight it appears correct that the Greek customs authorities were in breach of the principle of proportionality if they conducted themselves in the way the Commission describes in the application. ⁴

The question is, however, whether the Commission has shown that the offence committed was solely ‘a purely technical infringement’ of the tourist's duty to provide information.

7The Greek Government claims that the Commission's argument is based on a misconception of the actual facts of the case, because the Greek authorities imposed the fine on the basis that the tourist in question intended to avoid payment of taxes and duties.

8In my opinion the Commission's argument must be accepted in that the national authorities' opinion as to whether the traveller satisfies the conditions for temporary tax exempt importation of personal effects must be fair so as not to lose sight of the objective of the system.

However, I must agree with the Greek Government that the Commission has not shown that the Greek customs authorities misjudged the intentions of the tourist in question in the case in point.

The Commission argued on the basis of some general comments concerning the unlikelihood of the tourist in question intending to avoid the payment of customs and duties.

That is not a sufficient basis for stating that the Greek customs authorities' assessment was incorrect. ⁵ Such a finding would require a far stronger evidential basis than that which the Commission has been able to adduce. Certain evidence which could be important in the assessment of the subjective state of the person in question is disputed and other relevant information is completely missing.

Consideration might be given to the question of whether it is appropriate at all to accept an action under Article 169 of the Treaty where a decision on whether the Treaty has been infringed requires a prior assessment of the evidence relating to a person's subjective state. I do not, however, think that the present case in a suitable basis for deciding that question of principle. It need merely be stated that the Commission has not discharged its burden of proof as it is required to do in cases where it alleges infringement of the Treaty.

9It may accordingly be concluded that the evidence required to prove that there was only ‘a purely technical infringement’ of the relevant Greek rules has not been produced and therefore there is no conclusive basis for upholding the Commission's claim.

Conclusion

10For that reason I suggest that the Court should dismiss the case against the Hellenic Republic and order the Commission to pay the costs.

( *1 ) Original language: Danish.

¹ OJ 1982 L 376, p. 1.

² Directive 85/362/EEC on the harmonization of the laws of the Member Sttes relating to turnover taxes —Exemption from value added tax on the temporary importation of goods other than means of transport (OJ 1985 L 192, p. 20).

³ See, for example, the judgment of the Court in Case C-52/90 Commission v Denmark [1992] ECR I-2187, paragraph 23.

⁴ The fine imposed, which was approximately ECU 2000 and higher than the camera's value, would thus indeed appear to be disproportionate to the gravity of the offence. That view would find strong support in the case-law of the Court, see for example the judgment in Case C-203/80 Casati [1981] ECR 2595, in which it stated in paragraph 27: ‘... administrative measures or penalties must not go beyond what is strictly necessary, the control procedures must not be conceived in such a way as to restrict the freedom required by the Treaty and they must not be accompanied by a penalty winch is so disproportionate to the gravity of the infringement that it becomes an obstacle to the exercise of that freedom.’ See also the judgment in Joined Cases 286/82 and 26/83 Luisi and Carbone [1984] ECR 377.

⁵ The assessment may in fact have been wrong and the person in question must, of course, have the possibility of having that question reviewed by the competent authorities in the Member State concerned; it is their task, on the basis of the information available, including if need be the testimony of those involved, to decide whether that assessment was correct. From the information available it would seem that the person in question did not avail himself of that possibility.