ECJ (Judgment) 1 Acts of the institutions – Regulations – Basic regulations and implementing regulations – Scope of power of implementation – Limits – Implementing rules introducing, in relation to inward processing, a condition for recourse to equivalent compensation not laid down in the basic regulation – Lawful (Council Regulations Nos 1999/85, Art. 2(4), and 3677/86, Art. 9)
2 Free movement of goods – Trade with non-member countries – Inward processing arrangements – Equivalent compensation – Conditions – Classification of goods under the same tariff subheading – Breach of the principles of proportionality, protection of legitimate expectations and legal certainty – None
(Council Regulation No 3677/86, Art. 9)
3 In adopting provisions for the implementation of a basic regulation, the Community authority empowered to do so is required not to exceed the powers conferred upon it by that regulation for the implementation of the rules which it contains.
The fact that Article 9 of Regulation No 3677/86, adopted under the Regulatory Committee procedure for implementation of the basic regulation, Regulation No 1999/85 on inward processing relief arrangements, introduced, for recourse to equivalent compensation to be available under those arrangements, the condition that the equivalent goods must fall under the same Common Customs Tariff subheading as the import goods, whereas the basic regulation merely requires that the former should be of the same quality and display the same characteristics as the latter, does not mean that those powers were exceeded.
First, Article 2(4) of the basic regulation provides that the implementing measures to be adopted under the habilitation procedure may be designed to prohibit or limit recourse to the equivalent compensation system, which derogates from the inward processing arrangements. Second, the requirement of classification under the same subheading gives effect to the criterion, which as well as being clear and precise and capable of contributing to the attainment of the objective of precluding abuse of inward processing arrangements expressly referred to by the basic regulation, cannot be regarded as conflicting with the general objective of those arrangements, namely to promote exports by Community undertakings.
4 The condition for recourse to equivalent compensation under the inward processing relief arrangements introduced by Article 9 of Regulation No 3677/86 to the effect that the equivalent goods must fall under the same Common Customs Tariff subheading as the import goods is not manifestly disproportionate in relation to the objective of combating fraud which it pursued and therefore does not constitute a breach of the principle of proportionality. Nor does it breach the principle of the protection of legitimate expectations and legal certainty since, although relying on a criterion deriving from other rules, which are by their nature liable to be periodically amended, it places economic operators in a position such that they are able at any time to determine clearly and precisely whether or not equivalent compensation is available.
Citations:
C-103/96, [1997] EUECJ C-103/96
Links:
European
Updated: 03 June 2022; Ref: scu.161819