Germany: Courts rule on import duties levied in breach of EU law

16 October 2017

Recently, two German financial courts have had to consider whether and to what extent customs authorities have to pay interest on anti-dumping duties levied in breach of EU law.

The first case concerned a company which paid anti-dumping duty on the import of canned mandarins from China (FG Hamburg, decision dated 19.07.2017, 4 K 10/07). In the second case, a company paid anti-dumping duty on shoes with leather uppers imported from China and Vietnam (FG Düsseldorf, decision dated 03.05.2017, 4 K 3268/14 Z). The European Court of Justice (ECJ) lifted the anti-dumping customs regulations, ruling that they were not in line with EU law.

Subsequently, German customs authorities refunded the anti-dumping duties to the companies. However, the authorities refused to pay interest on the refunded amounts.

The financial courts disagreed with the customs authorities and decided that interests accrue in the favour of the importers.

Interest from the day of payment

The financial courts referred to a preliminary ruling of the ECJ, which stated that the interest began to accrue from the day the import duties were paid to the customs authorities (ECJ, decision dated 18.01.2017, C-365/15).

Interest Rate of 6% per year

Since the EU law does not regulate the interest rate in such cases the German courts applied national regulations which provide an interest rate of 6% per year (§ 238 AO).

The courts made also clear that it does not matter whether the importer charged the import duties on the customers. It is also not relevant that the national customs authorities transferred the collected anti-dumping duties to the European Union.

Breach of EU law

EU customs law has specific provisions for interest on import duties (Art. 116 para. 6 Union Customs Code). These provisions grant interest only when the reimbursement of customs duties does not take place within three months of the refund decision being taken.

However, the ECJ does not consider these provisions as exclusively applicable. If customs duties have been levied in breach of EU law there is an obligation for the Member States to pay not only the reimbursement but also corresponding interest.

Although the ECJ made its statements in relation to the former legislation under the Community Customs Code these principles should also be applicable under the current Union Customs Code.

 

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