ECJ on the payment of interest on customs refunds
ECJ, Judgment of 28.04.2022, C-415/20, C-419/20 and C-427/20, Gräfendorfer Geflügel und Tiefkühlfeinkost et al.
Original proceedings at the FG Hamburg
In the "Wortmann" judgment (ECJ, judgment of 18.01.2017, C-365/15), the ECJ commented on the customs law situation in which the plaintiff in the proceedings at that time had paid anti-dumping duties on the basis of an anti-dumping regulation that was later declared unlawful and wanted to receive reimbursement interest for the amounts wrongly paid. The ECJ granted the right to payment of reimbursement interest, since in the case of reimbursement of a duty unlawfully levied by an EU Member State, the duty payer may not be deprived of adequate compensation for the losses suffered as a result of the wrongfully paid duty.
The transferability of the "Wortmann" decision to case constellations of errors in the application of the law in export refund and European customs law is at issue in three proceedings of the Hamburg Fiscal Court (Ref. at the Hamburg Fiscal Court: 4 K 56/18, 4 K 67/18 and 4 K 14/20), which concern errors in the application of the export refund regulation, in customs tariff classification and in the determination of non-preferential origin. The Hamburg Court of Appeal did see a difference between whether the legal basis for the tax assessment was declared null and void or invalid by the ECJ, or whether the individual was entitled to a refund because the Member State authority had incorrectly applied the relevant and valid EU law in the individual case due to an incorrect assessment of the facts. Nevertheless, the idea of compensation emphasised by the ECJ is likely to apply equally to situations in which the individual is unlawfully burdened with duties because the legal requirements for levying the duties were not met. The Hamburg Regional Court has therefore decided to refer these cases to the ECJ for a preliminary ruling (case no. at the ECJ: C-415/20, C-419/20, C-427/20) (see already AWB Special Newsletter No. 6/2020).
Decision by the ECJ
In its judgment, the ECJ addressed, for example, whether it matters what the breach of Union law is. It explained that the claims of the administrative respondent for reimbursement and for payment of interest under Union law are the expression of a general principle, the application of which is not limited to specific breaches of Union law and is not excluded in the case of specific breaches of Union law. It follows that those claims may be brought not only where a national authority has levied a sum of money in the form of a contribution, a levy or an anti-dumping duty on an administrative subject on the basis of an act of EU law which is found to be unlawful, but also in other constellations of cases. Such a constellation of cases may, for example, consist of a situation in which it is found that the national authority has levied a charge on the administrative respondent in the event of an incorrect application, under EU law, of an EU act or of national rules implementing or transposing an EU act, as was also the case in the three main proceedings.
According to the ECJ's assessment, an infringement of Union law giving rise to a claim for payment of interest exists irrespective of whether that infringement was found by the national courts or by the Court of Justice.
With regard to possible restrictions under Union law (Article 241 CC and Article 116(6) IPC), the ECJ stated that these provisions do not preclude the payment of interest in the circumstances of the present cases.
The ECJ also saw no justification for any restrictions imposed by national law (national regulations that make the right to interest dependent on the filing of a court action and limit the payment of interest to the period from its lis pendens).
The ECJ therefore reached the following conclusion:
"The principles of Union law relating to the entitlement of administrative subjects to reimbursement of sums of money which a Member State has required them to pay in breach of Union law and to interest on those sums must be interpreted as meaning, first, that those principles apply where the sums of money in question are, first, export refunds which an administrative subject was initially required to pay in breach of Union law,
- those principles apply, first, where the sums of money in question correspond, on the one hand, to export refunds which were first refused to an administrative subject in breach of Union law and then paid late and, on the other hand, to a financial penalty imposed on him as a result of that breach,
- second, that those principles apply where it is apparent from a decision of the Court of Justice or of a national court that, on the basis of an incorrect interpretation or misapplication of EU law, the payment of export refunds, a financial penalty, anti-dumping duties or import duties has been refused by or claimed from a national authority; and
- third, that those principles preclude national legislation under which, where payment of export refunds, a financial penalty, anti-dumping duties or import duties has been refused or claimed in breach of EU law, payment of export refunds, a financial penalty, anti-dumping duties or import duties is refused or claimed in breach of EU law. the payment of interest, to the exclusion of the preceding period, is to be made only in respect of the period between the date on which the judicial remedy seeking payment or reimbursement of the sum in question was lodged and the date on which the competent court delivered its decision. However, those principles do not in themselves preclude such a rule from providing that payment is due only where such an appeal has been lodged, provided that that does not have the effect of making the exercise of the rights of administrative subjects under European Union law excessively difficult."
Based on the ECJ's "Wortmann" and "Gräfendorfer" rulings, companies that have been reimbursed import duties outside of legal action proceedings should examine whether they should not apply for interest as a precautionary measure.
It should be noted, however, that the customs administration has so far refused to recognise the right to interest under EU law. The amount of the interest rate will probably also be disputed. Anyone who applies for the payment of interest on refunds must therefore be prepared for a lengthy objection procedure and, if necessary, legal action.