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Cite as: [2010] EUECJ C-442/8, [2010] EUECJ C-442/08

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JUDGMENT OF THE COURT (Fourth Chamber) 1 July 2010 (*)

(Failure of a State to fulfil its obligations – EEC-Hungary Association Agreement – Subsequent verification – Failure to comply with rules on origin – Decision of the authorities of the exporting State – Appeal – Commission inspection mission – Customs duties – Post-clearance recovery – Own resources – Making available – Default interest)

In Case C-442/08,

ACTION under Article 226 EC for failure to fulfil obligations, brought on 6 October 2008,

European Commission, represented by A. Caeiros and B. Conte, acting as Agents, with an address for service in Luxembourg,

applicant,

Federal Republic of Germany, represented by M. Lumma and B. Klein, acting as Agents, with an address for service in Luxembourg,

defendant,

THE COURT (Fourth Chamber),

composed of: J.'C. Bonichot, President of the Chamber, C. Toader (Rapporteur), K. Schiemann, P. K�«ris and L. Bay Larsen, Judges,

Advocate General: V. Trstenjak,

Registrar: M.-A. Gaudissart, Head of Unit,

having regard to the written procedure and further to the hearing on 4 February 2010,

after hearing the Opinion of the Advocate General at the sitting on 25 March 2010,

gives the following

Judgment

1 By its application, the Commission of the European Communities asks the Court to declare that, by allowing customs claims to become time-barred, despite the receipt of a mutual assistance sheet, paying the own resources owed in this connection late and refusing to pay the default interest payable, the Federal Republic of Germany has failed to fulfil its obligations under Articles 2, 6 and 9 to 11 of Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities’ own resources (OJ 1989 L 155, p. 1), and the same articles of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities’ own resources (OJ 2000 L 130, p. 1).

Legal context

The EEC-Hungary Association Agreement

2 The Europe Agreement establishing an association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, signed in Brussels on 16 December 1991, was concluded on behalf of the European Communities by Decision 93/742/Euratom, ECSC, EC of the Council and the Commission of 13 December 1993 (OJ 1993 L 347, p. 1). Protocol 4 to that Agreement, concerning the definition of the concept of ‘originating products’ and methods of administrative cooperation, as amended by Decision No 3/96 of the Association Council between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, of 28 December 1996 (OJ 1997 L 92, p. 1; ‘Protocol 4’), contains the following provisions, in Article 16, under the heading ‘General requirements’:

‘1. Products originating in the Community shall, on importation into Hungary and products originating in Hungary shall, on importation into the Community benefit from this Agreement upon submission of either:

(a) a movement certificate EUR.1, a specimen of which appears in Annex III;

…’

3 Article 17 of Protocol 4, entitled ‘Procedure for the issue of a movement certificate EUR.1’, provides in paragraphs 1 and 5:

‘1. A movement certificate EUR.1 shall be issued by the customs authorities of the exporting country on application having been made in writing by the exporter or, under the exporter’s responsibility, by his authorised representative.

…

5. The issuing customs authorities shall take any steps necessary to verify the originating status of the products and the fulfilment of the other requirements of this Protocol. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate. The issuing customs authorities shall also ensure that the forms referred to in paragraph 2 are duly completed. In particular, they shall check whether the space reserved for the description of the products has been completed in such a manner as to exclude all possibility of fraudulent additions.’

4 Article 31 of that Protocol, entitled ‘Mutual assistance’ provides in paragraph 2:

‘2. In order to ensure the proper application of this Protocol, the Community and Hungary shall assist each other, through the competent customs administrations, in checking the authenticity of the movement certificates EUR.1 or the invoice declarations and the correctness of the information given in these documents.’

5 Article 32 of Protocol 4, entitled ‘Verification of proofs of origin’ provides :

‘1. Subsequent verifications of proofs of origin shall be carried out at random or whenever the customs authorities of the importing country have reasonable doubts as to the authenticity of such documents, the originating status of the products concerned or the fulfilment of the other requirements of this Protocol.

…

3. The verification shall be carried out by the customs authorities of the exporting country. For this purpose, they shall have the right to call for any evidence and to carry out any inspection of the exporter’s accounts or any other check considered appropriate.

4. If the customs authorities of the importing country decide to suspend the granting of preferential treatment to the products concerned while awaiting the results of the verification, release of the products shall be offered to the importer subject to any precautionary measures judged necessary.

5. The customs authorities requesting the verification shall be informed of the results of this verification as soon as possible. These results must indicate clearly whether the documents are authentic and whether the products concerned can be considered as products originating in the Community, Hungary or one of the other countries referred to in Article 4 and fulfil the other requirements of this Protocol.

6. If in cases of reasonable doubt there is no reply within 10 months of the date of the verification request or if the reply does not contain sufficient information to determine the authenticity of the document in question or the real origin of the products, the requesting customs authorities shall, except in exceptional circumstances, refuse entitlement to the preferences.’

6 According to the first paragraph of Article 33 of Protocol 4, where disputes arise in relation to the verification procedures of Article 32 which cannot be settled between the customs authorities requesting a verification and the customs authorities responsible for carrying out this verification or where they raise a question as to the interpretation of the Protocol, they are to be submitted to the Association Committee.

Decision 94/728

7 According to Article 2(1) of Council Decision 94/728/EC, Euratom of 31 October 1994 on the system of the European Communities’ own resources (OJ 1994 L 293, p. 9) the so-called ‘traditional’ revenue from Common Customs Tariff duties and other duties established or to be established by the institutions of the Communities in respect of trade with non-member countries and customs duties on products coming under the Treaty establishing the European Coal and Steel Community, inter alia, are to constitute own resources entered in the budget of the Communities.

8 Under Article 2(3) of Decision 94/728:

‘Member States shall retain, by way of collection costs, 10 % of the amounts paid under 1(a) and (b).’

9 Under Article 8(1) of Decision 94/728:

‘The Community own resources referred to in Article 2(1)(a) and (b) shall be collected by the Member States in accordance with the national provisions imposed by law, regulation or administrative action, which shall, where appropriate, be adapted to meet the requirements of Community rules. The Commission shall examine at regular intervals the national provisions communicated to it by the Member States, transmit to the Member States the adjustments it deems necessary in order to ensure that they comply with Community rules and report to the budget authority. Member States shall make the resources provided for in Article 2(1)(a) to (d) available to the Commission.‘

Regulations Nos 1552/89 and 1150/2000

10 The second recital in the preamble to Regulation No 1552/89, which is similar to the second recital in the preamble to Regulation No 1150/2000, provides :

‘The Community must have the own resources referred to in Article 2 of Decision 94/728/EC, Euratom [Council Decision of 24 June 1988 on the system of the Communities’ own resources (OJ 1988 L 185, p. 24)] available in the best possible conditions …’

11 Apart from the fact that Regulations Nos 1552/89 and1150/2000 refer, respectively, to Decision 88/376 and Decision 94/728, Articles 2, 6, 9 to 11 and 17(1) of the two regulations are essentially the same.

12 Under Article 2 of Regulation No 1552/89 :

‘1. For the purpose of applying this Regulation, the Community’s entitlement to the own resources referred to in Article 2(1)(a) and (b) of Decision 88/376/EEC, Euratom shall be established as soon as the amount due has been notified by the competent department of the Member State to the debtor. Notification shall be given as soon as the debtor is known and the amount of entitlement can be calculated by the competent administrative authorities, in compliance with all the relevant Community provisions.

2. Paragraph 1 shall apply when a notification must be corrected.’

13 That provision was amended with effect from 14 July 1996 by Council Regulation (Euratom, EC) No 1355/96 of 8 July 1996 (OJ 1996 L 175, p. 3), and the ensuing content was reproduced in Article 2 of Regulation No 1150/2000, which provides that:

‘1. For the purpose of applying this Regulation, the Community’s entitlement to the own resources referred to in Article 2(1)(a) and (b) of Decision 88/376/EEC, Euratom shall be established as soon as the conditions provided for by the customs regulations have been met concerning the entry of the entitlement in the accounts and the notification of the debtor.

1a. The date of the establishment referred to in paragraph 1 shall be the date of entry in the accounting ledgers provided for by the customs regulations.

…’

14 Article 6(1) and (2) of Regulation No 1552/89 (now Article 6(1) and (3) of Regulation No 1150/2000) provides as follows:

‘1. Accounts for own resources shall be kept by the Treasury of each Member State or by the body appointed by each Member State and broken down by type of resources.

2. (a) Entitlements established in accordance with Article 2 shall, subject to point (b) of this paragraph, be entered in the accounts at the latest on the first working day after the 19th day of the second month following the month during which the entitlement was established.

(b) Established entitlements not entered in the accounts referred to in point (a), because they have not yet been recovered and no security has been provided shall be shown in separate accounts within the period laid down in point (a). Member States may adopt this procedure where established entitlements for which security has been provided have been challenged and might, upon settlement of the disputes which have arisen, be subject to change.

…’

15 Under Article 9(1) of Regulation No 1552/89 and of Regulation No 1150/2000:

‘In accordance with the procedure laid down in Article 10, each Member State shall credit own resources to the account opened in the name of the Commission with its Treasury or the body it has appointed.

…’

16 Article 10(1) of Regulation No 1552/89 and of Regulation No 1150/2000 is worded as follows:

‘After deduction of 10 % by way of collection costs in accordance with Article 2(3) of Decision 88/376/EEC, Euratom, entry of the own resources referred to in Article 2(1)(a) and (b) of that Decision shall be made at the latest on the first working day following the 19th day of the second month following the month during which the entitlement was established in accordance with Article 2.

…’

17 According to Article 11 of those regulations:

‘Any delay in making the entry in the account referred to in Article 9(1) shall give rise to the payment of interest by the Member State concerned at the interest rate applicable on the Member State’s money market on the due date for short-term public financing operations, increased by two percentage points. This rate shall be increased by 0.25 of a percentage point for each month of delay. The increased rate shall be applied to the entire period of delay.’

18 Under Article 17(1) of those regulations:

‘Member States shall take all requisite measures to ensure that the amount corresponding to the entitlements established under Article 2 are made available to the Commission as specified in this Regulation.’

The Customs Code

19 Article 78(3) of Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the Community Customs Code (OJ 1992 L 302, p. 1, ‘the Customs Code’) provides:

‘Where revision of the declaration or post-clearance examination indicates that the provisions governing the customs procedure concerned have been applied on the basis of incorrect or incomplete information, the customs authorities shall, in accordance with any provisions laid down, take the measures necessary to regularise the situation, taking account of the new information available to them.’

20 According to Article 201(1)(a) of the Customs Code, the release for free circulation of goods liable to import duties, gives rise to a customs debt on importation.

21 The first subparagraph of Article 217(1) of the Customs Code provides:

‘Each and every amount of import duty or export duty resulting from a customs debt, hereinafter called “amount of duty”, shall be calculated by the customs authorities as soon as they have the necessary particulars, and entered by those authorities in the accounting records or on any other equivalent medium (entry in the accounts).’

22 Under Article 220(1) of the Customs Code:

‘Where the amount of duty resulting from a customs debt has not been entered in the accounts in accordance with Articles 218 and 219 or has been entered in the accounts at a level lower than the amount legally owed, the amount of duty to be recovered or which remains to be recovered shall be entered in the accounts within two days of the date on which the customs authorities become aware of the situation and are in a position to calculate the amount legally owed and to determine the debtor (subsequent entry in the accounts). That time limit may be extended in accordance with Article 219.’

23 Under Article 221 of the Customs Code :

‘1. As soon as it has been entered in the accounts, the amount of duty shall be communicated to the debtor in accordance with appropriate procedures.

…

3. Communication to the debtor shall not take place after the expiry of a period of three years from the date on which the customs debt was incurred. …’

24 Article 224 of the Customs Code provides:

‘Provided the amount of duty payable by the person concerned relates to goods declared for a customs procedure which entails the obligation to pay such duty, the customs authorities shall, at that person’s request, grant deferment of payment of that amount under the conditions laid down in Articles 225, 226 and 227.’

25 Article 236 of the Customs Code provides:

‘1. Import duties or export duties shall be repaid in so far as it is established that when they were paid the amount of such duties was not legally owed or that the amount has been entered in the accounts contrary to Article 220(2).

Import duties or export duties shall be remitted in so far as it is established that when they were entered in the accounts the amount of such duties was not legally owed or that the amount has been entered in the accounts contrary to Article 220(2).

No repayment or remission shall be granted when the facts which led to the payment or entry in the accounts of an amount which was not legally owed are the result of deliberate action by the person concerned.

2. Import duties or export duties shall be repaid or remitted upon submission of an application to the appropriate customs office within a period of three years from the date on which the amount of those duties was communicated to the debtor.

That period shall be extended if the person concerned provides evidence that he was prevented from submitting his application within the said period as a result of unforeseeable circumstances or force majeure.

Where the customs authorities themselves discover within this period that one or other of the situations described in the first and second subparagraphs of paragraph 1 exists, they shall repay or remit on their own initiative.’

26 Under Article 244 of the Customs Code :

‘The lodging of an appeal shall not cause implementation of the disputed decision to be suspended.

The customs authorities shall, however, suspend implementation of such decision in whole or in part where they have good reason to believe that the disputed decision is inconsistent with customs legislation or that irreparable damage is to be feared for the person concerned.

Where the disputed decision has the effect of causing import duties or export duties to be charged, suspension of implementation of that decision shall be subject to the existence or lodging of a security. However, such security need not be required where such a requirement would be likely, owing to the debtor’s circumstances, to cause serious economic or social difficulties.’

Regulation (EC) No 515/97

27 Title III of Council Regulation (EC) No 515/97 of 13 March 1997 on mutual assistance between the administrative authorities of the Member States and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters (OJ 1997 L 82, p. 1) governs the relations of the customs authorities of the Member States with the Commission. Under Article 17(2) of that regulation, the Commission is to communicate to the competent authorities in each Member State, as soon as it becomes available, any information that would help them to enforce customs or agricultural legislation.

28 Under Article 20(1) and (3) of that regulation, the Commission is to inform the Member States and the European Parliament of the results of Community administrative and investigative cooperation missions carried out in third countries.

Background to the dispute

29 From 1994 Suzuki and Subaru motor vehicles were imported into Germany from Hungary. Those imports received preferential tariff treatment, entailing application of a rate of 0%, under the EEC-Hungary Association Agreement on the basis of EUR.1 movement certificates certifying the Hungarian origin of the vehicles.

30 By a mutual assistance communication sent to the German authorities in English on 13 June 1996 and in German on 28 November 1996, the Unit for the Coordination of Fraud Prevention (‘UCLAF’) warned those authorities of its doubts as to whether those imports complied with the rules on origin. UCLAF asked them to initiate, with the Hungarian authorities, a procedure for the subsequent verification of the declarations of origin, to require a guarantee of payment or the deposit of the customs duties payable and to take all legal measures liable to suspend the limitation periods and ensure the possibility of post-clearance recovery. The Commission itself subsequently conducted further investigations, including an inspection mission to Hungary.

31 By a mutual assistance communication of 26 June 1998, UCLAF informed the Member States that the Hungarian administration had, in June 1998, sent the Commission the result of verifications carried out in Hungary on the status of [Magyar Suzuki rt, ‘Magyar Suzuki’] vehicles exported to the Community under cover of EUR.1 movement certificates. That administration ‘confirmed the non-originating status of 58 006 vehicles … which [had] unduly benefitted from EUR.1 certificates’. According to the annex to that communication, as regards the imports to Germany, 14 440 Suzuki vehicles and 4 683 Subaru vehicles, in other words, a total of 19 123 vehicles, had not observed the rules on origin.

32 By that communication UCLAF stated that it had ‘supporting documents collected during the Community missions of cooperation’ and ‘the official reply from the Hungarian customs headquarters, with supporting evidence (computer data and documents)’ and, moreover, that the Member States which had ‘requested post-clearance verification of EUR.1 certificates within the framework of [Protocol 4] will receive direct replies to these requests’.

33 UCLAF also announced to the 14 Member States affected by those imports that it would send ‘a copy of the June 98 communication with a complete version of the computer data and documents, … translations of correspondence from the Hungarian customs headquarters’ and ‘computer files, summary extracts of operations by country created by UCLAF from the original Hungarian file’.

34 UCLAF sent those documents and computer files by letter, the English version of which was sent to the German authorities on 13 July 1998 and the German translation on 18 August 1998. Those documents included the letter of 26 May 1998 by which the Hungarian authorities sent UCLAF the outcome of their verifications and the documents and computer files identifying the vehicles for which the rules of origin had not been respected.

35 It is claimed that the letter of 26 May 1998 shows that, by 15 May 1998, the Hungarian authorities had completed the verification of the origin of vehicles produced by Magyar Suzuki and the data appearing in the EUR.1 certificates. Following their verification, the authorities had found that the rules on origin had not been observed as regards some of the vehicles imported. However, the authorities stated that Magyar Suzuki had initiated judicial proceedings concerning the application of the rules of origin. Moreover, the Hungarian authorities made clear that they would inform the Member States which had asked for post-clearance verification of certain EUR. 1 certificates under Protocol 4 of the results of that verification directly.

36 Having received the letter of 18 August 1998, the Federal Republic of Germany requested the final report of the Commission’s inspection mission to Hungary several times. It received that report on 2 March 1999.

37 On 15 April 1999, the German authorities began to enter in the accounts the customs duties for vehicles which, according to the Hungarian authorities, had not respected the rules on origin. However, because of the time limit of three years for the communication to the taxpayer under Article 221(3) of the Customs Code, it was not possible to charge any duty for vehicles imported before 15 April 1996. The own resources relating to that period were neither entered in the accounts nor made available to the Commission.

38 By its mutual assistance communication of 27 October 1999, the European Anti-Fraud Office (‘OLAF’), which succeeded UCLAF from 1 June 1999, informed the Member States that the Hungarian authorities had informed the Commission on 23 July 1999 of ‘its new stance regarding [the Magyar Suzuki] file’ following a ruling delivered by the competent Hungarian court. Under that new stance, some of the vehicles which the Hungarian authorities had previously found not to have respected the rules on origin, had to be regarded as coming from Hungary after all.

39 In that connection, OLAF pointed out that, in July 1998, UCLAF had forwarded the conclusions of the Hungarian authorities ‘following the joint in-depth checks carried out with the Community task force during the first quarter of 1998’ and, in February 1999, ‘its general investigation report … containing its own evaluation and its own conclusions based on its own documents and documentary evidence gathered within and outside Hungary’ which reflected the conclusions of the Hungarian authorities.

40 OLAF took the view that ‘the decisions taken by the Hungarian legal authorities following the litigation between Hungarian customs and the Hungarian exporter [had] no direct legal effect on the checks made by the customs authorities of the Member States on the status of goods imported by Community traders’.

41 OLAF disputed ‘the admissibility of new elements presented several years after the checks [had] started and several months after detailed checks’, formally rejected the argument of the Hungarian manufacturer and confirmed its analysis annexed to the investigation report of February 1999.

42 Accordingly, OLAF expressly called on the Member States to pursue the recovery procedures and to ‘base their actions on the conclusions of the Community report of February 1999’.

43 The German authorities subsequently reimbursed the import duties in respect of vehicles whose Hungarian origin had been confirmed by the authorities of the exporting State following judicial decisions delivered in that State.

Pre-litigation procedure

44 In the course of a check on own resources in May 2000 in Germany, Commission staff found that the German authorities had not carried out post-clearance recovery of customs duties immediately after the withdrawal by the Hungarian authorities of the declarations of origin of the imported vehicles at issue and had thus not made payment of own resources.

45 The German authorities did not sent the first demands for post-clearance recovery until 15 April 1999 for the imports between December 1996 and November 1997, and 20 April 1999 for imports from April to November 1996. As the customs debts relating to imports before 15 April 1996 were already time-barred, the own resources relating to them were not established.

46 By letter of 14 September 2001, those authorities explained that the customs debts which were time-barred at the time when the procedures for post-clearance recovery began were not established.

47 In the working document of 12 June 2003 and in its letter of 23 October 2003, the Commission took the view that the Member States concerned, which included the Federal Republic of Germany, had been able to identify the debtor and the amount of duty payable at the latest by 18 August 1998, which was the date when the final language version of the documents and computer files relating to the mutual assistance communication of 26 June 1998 were sent. Accordingly, the Member States which had not taken action within three months of that date had to be required to pay the amounts of duty laid down as of 18 November 1998.

48 In addition the Commission asked the Member States concerned to provide it with more specific information regarding the import duties concerned. It stated that a letter of formal notice would follow. Finally, it pointed out that payment within the time-limit would obviate the need to calculate default interest.

49 By a letter of 30 March 2005, the Federal Republic of Germany informed the Commission that the import duties in question amounted to EUR 408 735.53.

50 The Commission asked Germany to pay that amount within two months and stated that default interest would be calculated once the payment was received.

51 By letter of 8 November 2005, the Federal Republic of Germany informed the Commission that payment had been made on 31 October 2005 ‘subject to confirmation of the Commission’s position by a judgment of the Court of Justice’, solely in order to avoid default interest.

52 By letter of 13 June 2006, the German authorities refused to pay the default interest which the Commission had fixed at EUR 571 011.21 and repeated that it disputed that a customs debt had arisen and that there was an obligation to recover it.

53 By letter of 18 October 2006, the Commission commenced proceedings for failure to fulfil obligations under Article 226 EC and put the Federal Republic of Germany on notice to submit its observations.

54 As it considered the reply received on 19 February 2007 to be unsatisfactory, the Commission delivered a reasoned opinion on 29 June 2007, to which Germany replied by letter of 24 August 2007.

55 As it was not satisfied with that reply, the Commission decided to bring the present action.

The action

Arguments of the parties

56 The Commission essentially complains that the Federal Republic of Germany failed to recover the customs debts at issue, paid the resulting own resources late and refused to pay the default interest payable.

57 As regards the late payment of own resources, the Commission observed that Regulations Nos 1552/89 and 1150/2000 and the Customs Code require the Member States to recover customs debts legally due and to establish and pay the related own resources as soon as they are in possession of the information needed to determine the debtor and the amount owed.

58 The Commission maintains that, in the present case, the letter of 18 August 1998 informed the German authorities of the withdrawal of certain declarations of origin and, in conjunction with the previous communications and documents contained all the information necessary to recover the customs debts at issue.

59 Within three months of the sending of that letter the Federal Republic of Germany should have established the amounts legally due and informed the debtors, even if it subsequently had to provisionally waive payment or reimburse the amounts collected because of the judicial proceedings pending in Hungary. The own resources should have been entered in the Communities’ accounts by 20 January 1999 at the latest.

60 As regards default interest, the Commission observes that, under Article 11 of Regulations Nos 1552/89 and 1150/2000, the Member States are required to pay interest even if, as a result of their inaction, duties on own resources can no longer be established. The Federal Republic of Germany should thus have paid interest for the period from 20 January 1999 to 31 October 2005, without that Member State being able to rely on the principle of protection of legitimate expectations.

61 The Federal Republic of Germany claims, first, that it is the provisions of Article 32(1) and (5) of Protocol 4 which apply, rather that those of Regulations Nos 1552/89 and 1150/2000.

62 Contrary to the requirements of that article, the conclusions of the Hungarian authorities did not indicate clearly whether the export documents were authentic and whether the goods concerned complied with the rules on origin. Moreover, those authorities had given notice of the judicial proceedings initiated by Magyar Suzuki and confined themselves to announcing that the definitive results of the verification would be forwarded subsequently.

63 Second, the Federal Republic of Germany observed that the investigation report by UCLAF was the result of a mission carried out under Commission Regulation No 515/97. As a Member State which did not take part in that mission, the Federal Republic of Germany was entitled to wait for the mission report before commencing procedures for recovery, in accordance with point 4.5 of the guidelines for Community missions carried out under Regulation No 515/97 under the terms of which the Member States which do not take part in a mission are to request the investigation report before taking any action against importers. Moreover, in its mutual assistance communication of 27 October 1999, OLAF itself called on the Member States to base their action on that investigation report.

64 Third, citing Joined Cases C-23/04 to C-25/04 Sfakianakis [2006] ECR I-1265, paragraph 21, the Federal Republic of Germany maintained that it was not authorised to recover customs duties before it knew the result of the judicial proceedings pending in Hungary. The expiry of the limitation period for customs debts would thus in some cases be inevitable.

65 As regards default interest, the Federal Republic of Germany maintains that, in the absence of an obligation to make own resources available, that ancillary obligation was without foundation.

66 In the alternative, that Member State argues that a legitimate expectation that no default interest need be paid had been created by the Commission, which, in the document distributed at the meeting of the Committee on Own Resources of 2 July 2003, announced that ‘payment within the period prescribed will avoid the calculation of default interest’.

67 Moreover, the Federal Republic of Germany takes the view that, in the absence of any specific requirement in Regulation No 1150/2000 in that regard, the deadline for entry in the accounts when the amounts of the customs debts have not been recovered is set by the Commission. In the present case, the Commission only set a deadline for the payment of own resources in the document of 12 June 2003. Accordingly, it is only from the expiry of that deadline that default interest must be calculated.

Findings of the Court

The making available of own resources

68 As a preliminary point, it must be observed that, under Article 16(1) of Protocol 4, products originating in Hungary are, on importation into the Community, to benefit from preferential treatment upon submission of proof in the form of a EUR.1 movement certificate.

69 For the implementation of the provisions of that protocol, a system of administrative cooperation was set up between the Hungarian authorities, on the one hand, and the Community authorities and those of the Member States, on the other.

70 That system is based on a division of responsibilities together with mutual trust between the authorities of the Member State concerned and those of the Republic of Hungary (see, to that effect, Sfakianakis, paragraph 21).

71 In the framework of that division of responsibilities, responsibility for verifying the originating status of products coming from Hungary falls to the Hungarian authorities. As they are best placed to verify directly the facts which establish the origin of the goods concerned, those authorities have the task, under Articles 17(4) and (5) and 32(3) of Protocol 4, of verifying whether the rules on origin have been observed when they issue the EUR.1 certificates and in subsequent verifications.

72 The system of administrative cooperation can, however, function only if the customs authorities of the State of import accept the determinations legally made by the authorities of the State of export (see Sfakianakis, paragraph 23).

73 In that regard the authorities of the State of import must accept the validity of the EUR.1 certificates, attesting to the Hungarian origin of goods (see Sfakianakis, paragraph 37). Moreover, the authorities of the Member State of importation must accept the findings made by the Hungarian authorities in a subsequent verification.

74 Accordingly, if, following a subsequent verification, the Hungarian authorities indicate clearly, pursuant to Article 32(5) of Protocol 4, that the vehicles concerned cannot be considered to be products originating in Hungary and thus give the authorities of the Member State of importation sufficient information for them to take the view that the certificates in question had been revoked, those authorities are no longer required to grant the goods concerned the preferential treatment provided for in Article 16(1) of Protocol 4.

75 Moreover, in such circumstances, the authorities of the Member State of importation are required to ensure, under Regulations Nos 1550/89 and 1150/2000 and the Customs Code, that own resources are placed at the disposal of the Communities rapidly and effectively and to effect post-clearance recovery of customs debts and enter the resulting own resources in the accounts without delay.

76 The Member States are thus required to establish the Communities’ entitlement to own resources as soon as their customs authorities are in a position to calculate the amount of duties arising from a customs debt and determine the debtor (see, to that effect, Case C-392/02 Commission v Denmark [2005] ECR I-9811, paragraph 61). Those Member States are accordingly required to take the duties into account on the conditions laid down in Article 6 of Regulation No 1552/89 (see Case C-312/04 Commission v Netherlands [2006] ECR I-9923, paragraph 61).

77 In this case, the Federal Republic of Germany maintains, as pointed out in paragraph 62 of this judgment, that the Hungarian authorities did not indicate clearly their finding that the vehicles imported into Germany did not comply with the rules on origin and that it was therefore required to continue to apply preferential treatment to the products concerned.

78 That argument cannot be upheld. As observed in paragraph 35 of this judgment, having carried out the subsequent verification required by certain Member States and by the Commission, the Hungarian authorities clearly indicated in their letter of 26 May 1998 that the vehicles imported into Germany and appearing in the relevant documents and files did not comply with the rules of origin and thus gave the authorities of the State of importation sufficient information for them to consider that the certificates in question had been revoked. Those findings were, according to that letter, definitive.

79 Consequently, as the Advocate General rightly observed in point 64 of her opinion, it must be held that, in this case, the provisions of Protocol 4 no longer precluded the German authorities from refusing to apply preferential tariff treatment to the goods in question.

80 Moreover, it must be held that, on the basis of the information provided by the Hungarian authorities, the German authorities were in a position to determine the debtors and calculate the amount of the customs debt.

81 Having regard to the foregoing considerations, it must be held that, following receipt of the letter of 18 August 1998 from the Commission containing the translation into German of the letter from the Hungarian authorities of 26 May 1998 and the documents and computer files relating to it, the Federal Republic of Germany was required, within the time limit of three months set by the Commission, to make a subsequent entry in the accounts and inform the debtor of the import duties legally due.

82 As the Advocate General observed in point 66 of her opinion, the fact that it was the Commission and not the German authorities who requested the verification carried out by the Hungarian authorities in no way affects the obligation of the authorities of the importing State to abide by the outcome of that verification. As the Court held in paragraph 31 of Sfakianakis, that verification may be carried out, not only at the request of the authorities of the State of importation, but also at the request of the services of the Commission, which, pursuant to Article 211 EC, is charged with ensuring the proper application of the EEC-Hungary Association Agreement and its protocols.

83 In addition, contrary to the contention of the Federal Republic of Germany, a delay in making available the customs duties at issue cannot be justified, in the circumstances of the case, by the expectation of further information from the Hungarian authorities or a definitive decision in the judicial proceedings initiated in Hungary by Magyar Suzuki, and still less by the expectation of the final report of the investigation conducted in parallel by UCLAF.

84 First, as the Advocate General observed in point 67 of her opinion, although the Hungarian authorities, in their letter of 26 May 1998, announced that they would communicate the individual responses to the Member States which had requested subsequent verification of the EUR.1 certificates under Protocol 4, it is common ground that the German authorities were not amongst those who demanded that such verification should be carried out and cannot, therefore, claim that they were expecting such a response.

85 Then, as regards the argument of the Federal Republic of Germany drawn from Sfakianakis, that it was not authorised to recover customs duties before the outcome of the judicial proceedings in Hungary was known, it must be observed that the case leading to that judgment concerned the subsequent recovery by the Greek authorities of customs duties relating to imports of Suzuki vehicles from Hungary in 1995. That recovery was based on the findings of the subsequent verification of EUR.1 certificates made by the Hungarian authorities under Protocol 4, findings which were revised following the decisions of the Hungarian courts.

86 It is against that background that the Court held, in paragraph 43 of Sfakianakis, that the effectiveness of the abolition of the imposition of customs duties under the Association Agreement precludes administrative decisions imposing the payment of customs duties, taxes and penalties taken by the customs authorities of the State of import before the definitive result of actions brought against the findings of the subsequent verification have been communicated to them, when the decisions of the authorities of the State of export which initially issued the EUR.1 certificates have not been revoked or cancelled.

87 However, as the Advocate General observed in points 56 and 57 of her opinion, that ruling took account of the fact that, in the case leading to the judgment in Sfakianakis, the Greek authorities did not have sufficient information to allow them to take the view that the EUR.1 certificates at issue had been revoked. According to paragraph 41 of that judgment, the Hungarian authorities had expressly pointed out to the Greek authorities that the EUR.1 certificates relating to vehicles the non-Hungarian origin of which had been formally recognised by the manufacturer had been revoked. On the other hand, they gave no such indication with regard to the certificates at issue in the dispute and, as is apparent from paragraph 11 of the judgment, they had even asked the Greek authorities to be patient before proceeding with recovery of the customs duties.

88 It must be found that the same does not apply in this case. The Hungarian authorities had clearly indicated by their letter of 26 May that the vehicles concerned could not be considered to be goods originating in Hungary and had accordingly given the authorities of the State of importation sufficient information to allow them to take the view that the certificates in question had been revoked. However, as observed in paragraph 73 of this judgment, the authorities of the Member State of importation must accept the findings made by the Hungarian authorities in a subsequent verification. Consequently, and contrary to the contentions of the Federal Republic of Germany, the fact that the Hungarian authorities also pointed out that there were proceedings pending against the findings of the subsequent verification cannot affect the obligation on the German authorities to enter in the accounts and notify that customs debt and to establish the own resources resulting from it.

89 Finally, since the final confirmation by the Hungarian authorities that the rules on origin had not been complied with represented a sufficient basis for the initiation by the German authorities of the procedures for the recovery of the customs debts at issue, those authorities could not rely on UCLAF’s failure to take a stance and, in particular, the absence of a final report on the investigation in an inspection mission to Hungary carried out by UCLAF itself regarding the same imports and in direct connection with the subsequent verification carried out by the Hungarian authorities to justify the delay in the recovery and making available of the related own resources.

90 Moreover, the arguments of the Federal Republic of Germany, according to which, by the mutual assistance communication of 27 October 1999, OLAF itself invited the Member States to act on the basis of the UCLAF investigation report, cannot be upheld. As the Advocate General pointed out in points 90 and 91 of her opinion, in formulating those arguments that Member State relied on a restrictive reading of that communication without taking account of the context.

91 It must be borne in mind that, in the wake of the decisions by the national courts, the Hungarian authorities had revised their stance concerning the failure to observe the rules on origin in respect of the exported vehicles. Against that background, OLAF, by its mutual assistance communication, expressed its disagreement with the point of view of those authorities and called on the Member States concerned to continue to recover the customs duties at issue. It was only in order to strengthen its position that OLAF relied on the findings of the verification carried out by UCLAF.

92 Moreover, it must be observed that the recovery of the customs duties at issue by the German authorities after receipt of the findings of the Hungarian authorities confirming the failure to respect the rules of origin was not such as to affect the interests of the debtors irredeemably. First, the customs authorities were authorised, under Articles 224 to 230 of the Customs Code to grant payment facilities to the debtors. Second, in so far as it is subsequently established that the amount of customs duty is not legally owed, the customs authorities are required, under Article 236 of the Customs Code, to repay it. In that regard, it must be made clear that, in the present case, the German authorities which took steps to recover duties before the notification of the decisions of the Hungarian courts and of the new stance of the authorities of the exporting State, in fact recovered customs duties which were not legally owed.

Default interest

93 The Court has consistently held that there is an inseparable link between the obligation to establish the Communities’ own resources, the obligation to credit them to the Commission’s account within the prescribed time-limit and the obligation to pay default interest, payable regardless of the reason for the delay in making the entry in the Commission’s account (see, in particular, Case 68/88 Commission v Greece [1989] ECR 2965, paragraph 17; Case C-363/00 Commission v Italy [2003] ECR I-5767, paragraphs 43 and 44, and Case C-150/07 Commission v Portugal [2009] ECR I-00007*, paragraph 62).

94 Under Article 11 of Regulation No 1552/89, any delay in making the entries in the account referred to in Article 9(1) of that regulation gives rise to the payment of interest by the Member State concerned at the interest rate applicable to the entire period of delay (see Case C-460/01 Commission v Netherlands [2005] ECR I-2613, paragraph 91, and Case C-275/07 Commission v Italy [2009] ECR I-2005, paragraph 66).

95 Moreover, it is apparent from the wording of Article 11 that a delay in the making available of own resources cannot depend on a time limit fixed by the Commission for making available those resources such as that mentioned in paragraph 67 of this judgment.

96 The argument of the Federal Republic of Germany, according to which it had a legitimate expectation that it would not have to pay default interest, must also be rejected.

97 As the Advocate General observed in points 112 to 114 of her opinion, in view of the clear and precise provisions of Articles 10 and 11 of Regulation No 1552/89, of the ambiguous content of the working document of 12 June 2003, of the significant amount of the interest due and of the background to the case, the Federal Republic of Germany could not consider that it had been given precise, unconditional and consistent assurances such as to give rise to a legitimate expectation.

98 It follows from all the foregoing that, by allowing customs claims to become time-barred, despite the receipt of a mutual assistance communication, paying the own resources owed in this connection late and refusing to pay the default interest payable, the Federal Republic of Germany has failed to fulfil its obligations under Articles 2, 6 and 9 to 11 of Regulation No 1552/89 and the same articles of Regulation No 1150/2000.

Costs

99 Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Commission has applied for costs and the Federal Republic of Germany has been unsuccessful, the latter must be ordered to pay the costs.

On those grounds, the Court (Fourth Chamber) hereby

1. By allowing customs claims to become time-barred, despite the receipt of a mutual assistance communication, paying the own resources owed in this connection late and refusing to pay the default interest payable, the Federal Republic of Germany has failed to fulfil its obligations under Articles 2, 6 and 9 to 11 of Council Regulation (EEC, Euratom) No 1552/89 of 29 May 1989 implementing Decision 88/376/EEC, Euratom on the system of the Communities’ own resources and the same articles of Council Regulation (EC, Euratom) No 1150/2000 of 22 May 2000 implementing Decision 94/728/EC, Euratom on the system of the Communities’ own resources.

2. Orders the Federal Republic of Germany to pay the costs.

[Signatures]

* Language of the case: German.