EU Law Blog

Customs Union, New Customs Code, Regulation 450/2008

Let's not forget that the EU is first and foremost a customs union.

The new Customs Code - Regulation 450/2008 - has been adopted by the Parliament and Council and published recently. It is quite a monument and an achievement. For a brief and general explanation of the customs code, see here.

The provision on its entry into force is quite complex: Some provisions come into effect on June 24th 2008 to give a basis for implementing measures, the rest on June 24th 2009 at the earliest and June 24th 2013 at the latest, and one provision - Article 30§1 - on January 1st 2011.

A striking feature of the new Code is the amount that is left to the Commission to work on in the implementing measures.

Cacophonic outpouring on globalization

Deepak Lal (when does he get a Nobel Prize ?) complains in his wonderful recent book "Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-First Century" of:

the cacophony of outpourings on globalization by sundry sociologists, philosophers, and political scientists as well as some economists" (p. xi)

And here's a prime specimen of such an outpouring from the Commission in its Communication entitled "The European Interest: Succeeding in the age of globalisaton" which is a "contribution to the October Meeting of Heads of State and Government". Here's an extract (reproduced exactly, with no attempt to sort out the grammar and style):

The EU must be in a position to present to citizens with a compelling vision of how a global Europe is adapting to new needs while protecting their interests, reforming its economic and social governance to ensure continuing prosperity, solidarity and security for the next generation as well as today's citizens. Meeting challenges of this scale can only be done effectively by making the most of the partnership between Member States and the EU level. Active involvement and a sense of stronger ownership by all actors are prerequisites for a successful Lisbon strategy. It will require a concerted commitment to engage in a capable and responsive communication strategy with EU citizens.

That surely makes you want to read the rest, doesn't it ?

Charges equivalent to a customs duty: Case C-173/05

This kind of case is pretty rare. You don't find many charges equivalent to a customs duty these days.

But in its judgment in Case C-173/05 Commission v. Italy, the Court of Justice held that a tax imposed by the Sicilian authorities on gas pipelines was a charge having equivalent effect to a customs duty prohibited by Articles 23 and 25 EC.

The local authorities in Sicily instituted a tax on the ownership of gas pipelines that carried gas from Algeria up into mainland Italy. The tax was ostensibly an "environmental tax". The catch in this case was that the tax was payable only when gas actually present in the pipeline. Consequently, the Court held that the Sicilian tax is a charge levied on goods (the gas) imported from a non-member country (Algeria) for distribution and consumption in Italy or in transit to other member States.

The Court also held that the Sicilian tax was contrary to Article 133 EC and to Article 9 of the Cooperation Agreement between Algeria and the EC.

Anti-dumping, injury and causation: Case T-107/04

Alright then, back to the serious stuff. Very serious stuff in fact. It is about time we ventured together into the frightening jungle of anti-dumping.

The Court of First Instance has handed down an important judgment in Case T-107/04 Aluminium Silicon Mill Products GmbH v. Council. It is important because it is (probably) the first one in which the Court of First Instance has struck down an anti-dumping regulation - Regulation 2229/2003 which imposed duties on silicon from Russia - because the Council had committed a manifest error of assessment in the description of injury suffered by the Community industry. The Court of First Instance held that the Council was entirely wrong to attribute the harm to the importation of silicon products from Russia.

If that were not enough, the Court of First Instance held that the Council committed two errors in finding that there was a causal link between the importation from Russia and the alleged harm suffered by the Community industry.

WTO Appellate Body on EC customs union: Both sides claim victory

The WTO Appellate Body has largely concluded that the EC customs system ensures an adequate degree of uniformity, with but one exception, to meet WTO standards.

The case was begun in 2004. The USA complained that the EC system of customs administration failed to ensure uniform administration by the customs authorities of the 25 member States. The USA also claimed that the review of administrative decisions on customs matters by the courts of 25 member States failed to comply with the EC’s obligation of “prompt review and correction of administrative action”.

The WTO issued a first report on June 16th, 2006. That report rejected most of the complaintsbut found a violation of GATT rules in three instances of application of classification and valuation rules.

The USA then appealed that first report. Now the Appellate Body actually reverses two out of the three specific violation findings made by the panel but finds that the classification of LCD monitors was incompatible. It also confirms that the EC customs system generally complies with the WTO rules.

Here's a triumphant EC Commission press release. And here's an equally triumphant USTR press release.

That's nice! Both sides claim victory.

Make up your own mind by checking out the Appellate Body findings and conclusions, the full report and summary for yourself.

The breakdown in the WTO – who’s to blame?

After all the palaver about blame for the failure to reach an agreement in the Doha round, it is good to see some folks do some proper research on who is to blame.

Guess who is most to blame ?

That's right, the EU. And it's two Danish researchers who say so.

Thanks to Marginal Revolution for the reference.

Appeals in Cases T-69/00 & T-135/01 : The banana saga continues

Remember those cases about the liability of the EU in damages as a result of the illegal banana regime and the US retaliatory measures ?

According to this document in French of the Council, the applicants in Cases T-69/00 and T-135/01 (still not published in English) have lodged appeals to the Court of Justice against the judgments of the Court of First Instance.

The appeals are registered as C-120/06 P and C-121/06 P respectively.

For our previous post on the judgments of the Court of First Instance, see here.

Right to an effective judicial remedy and non member State courts : Cases C-23/04 to C-25/04

Here's a new judgment of the Court of Justice in Joined cases C-23/04, C-24/04, C-25/04 Sfakianakis that requires the EC institutions and EC member States to give full faith and credit of sorts to the judgments of the courts of a non member State that is party to an agreement with the EC in matters relating to the agreement. It is really a bold step.

The right to an effective judicial remedy is part and parcel of EC law. No doubt about that (see Case 222/84 Johnston, for instance). That means that the courts of the member States must be available to enforce EC law rights. It also means that courts of the member States must be available to enforce rights granted by Association Agreements with non member States because those agreements are part of the Community legal order (see Case 12/86 Demirel).

But now, in Joined cases C-23/04, C-24/04, C-25/04 Sfakianakis the Court of Justice has extended that principle requiring that the EC institutions and authorities of the member States should defer to the findings of courts of a non member State which is party to an association agreement with the EC on matters relating to the application of that agreement.

What happened was this, simplified somewhat. The EC had an association agreement with Hungary before Hungary joined the EC. There was a protocol setting out complex rules on, among other things, the origin of goods which benefitted from tariff free trade under the agreement. According to that protocol, the exporting state (Hungary) had to issue a certificate of origin attesting that the goods were produced there in order for them to benefit from duty free trade in the importing state.

Suzuki set up plant in Hungary and started exporting to EC member countries. The Hungarian authorities issued origin certificates for the cars. Then somehow the EC Commission started investigating whether the certificates were legit (a tip off from a competitor, maybe ?). Anyway, the Commission asked the Hungarians to look into it. Which they did. The Hungarians admitted that some of the certificates had been issued by them in error, stated that others were perfectly in order and that a third group were the subject of litigation in the Hungarian courts. Ultimately, the Hungarian courts confirmed the validity of the certificates in that third group. Meanwhile, the Greek customs authorities did not know what to do on import of the cars: Should they levy extra duties or not ? The Commission wrote the Greeks saying they should not levy the extra duties on the cars covered by the certificates upheld by the Hungarian courts. Still the Greek authorities were a bit hesitant as to what to do and ultimately the matter came to the Court of Justice.

The Court affirmed strongly that the Greek authorities must defer to the judgment of the Hungarian courts on the issue of the validity of the certificates issued by the Hungarians pursuant to the association agreement. If the authorities of a member State of import or the EC institutions failed to take into account the decisions delivered by the Hungarian courts’ ruling in carrying out their duty to review the legality of Hungarian administrative decisions, those authorities or institutions would infringe the exporter’s right to an effective judicial remedy.

Banana saga : Cases T-69/00, T-151/00, T-383/00 & T-135/01 Liability in absence of illegality

Now here's an odd and interesting twist in the banana saga. Remember a while ago (see the posts for February 14th, 2005 to be precise, and again for March 8th, 2005 the banana traders who suffered loss and damage as a result of the EC banana regime declared illegal by the WTO sued the EC in damages and lost ? (T-19/01 Chiquita Brands v. Commission).

This time, it's not the banana traders suing the EC for damages, it is the EC exporters who suffered from the temporary compensatory measures imposed by the United States who claimed compensation from the EC. What happened was that the United States imposed a 100% customs tariff on certain goods from a number of EC member States from April 19th 1999 to June 30th 2001 pursuant to section 301 of the Trade Act 1974 (19 U.S.C § 2411) (for an overview, see here) and authorized according to Article 22 § 7 of the Understanding on Rules and Procedures Governing the Settlement of Disputes. They lost quite a bit of trade as a consequence. So they sued the Council and Commission in damages.

They lost. The Court of First Instance dismissed the claim of the traders in its judgments in Case T-151/00 Laboratoire du Bain v Council and Commission and in Case T-135/01 Giorgio Fedon & Figli v. Council and Commission (Update: The judgments have not been published in English). See also Case T-69/00 FIAMM v. Council and Commission and Case T-383/00 Beamglow Ltd v. European Parliament, Council and Commission

First, the Court of First Instance held that the Community institutions had not breached any principle of EC law and repeated that it had no jurisdiction to evaluate compliance by those institutions with the WTO agreements (see inter alia Case C-149/96 Portugal v. Council).

Then, rather tantalizingly, the Court of First Instance examined whether the institutions could be liable in damages even in the absence of any illegality on their part. The Court exhumed the rather obscure judgment in Case 81/86 De Boer Buizen v. Council and Commission. But to succeed, the plaintiffs had to show that the loss and damage they suffered was special and abnormal. The Court of First Instance held that it was not. The suspension of tariff concessions or the imposition of measures such as those imposed by the United States in this case are part and parcel of the normal vicissitudes of the current international trade system. At least according to the Court of First Instance.
A bit like being hit by a car. Happens to people in the street, alas.

Article on transatlantic banana dispute

Here is a rather complex but interesting article entitled Nested and Overlapping Regimes in the Transatlantic Banana Trade Dispute by Karen Alter of Northwestern and Sophie Meunier-Aitsahalia of Princeton.
The abstract states :

"The decade long trans-Atlantic banana dispute was not a traditional trade conflict stemming from antagonistic producers' interests. Instead, this article argues that the banana dispute is one of the most complex illustrations of the legal and political difficulties created by the nesting and overlapping of international institutions and commitments. The contested Europe-wide banana policy was an artifact of nesting - the fruit of efforts to reconcile the single market with Lome obligations which then ran afoul of WTO rules. Using counter-factual analysis, this article explores how the nesting of international commitments contributed to creating the dispute, provided forum shopping opportunities which themselves complicated the options of decision-makers, and hindered resolution of what would otherwise be a pretty straightforward trade dispute. We then draw out implications from this case for the EU, an institution increasingly nested within multilateral mechanisms, and for the issue of the nesting of international institutions in general."

The pun in the abstract is nice ! Seriously, though, it is worth reading.