The General Court of the European Union has partially upheld the Czech Republic’s claim for unjust enrichment of the European Commission after the Member State had to pay the Commission approximately €726,000 in an anti-dumping duty recovery case, in a judgment handed down on Wednesday 11 May (Case T-151/20).
In November 2007, a European Anti-Fraud Office (OLAF) inspection mission to Laos uncovered the importation of Chinese-origin pocket lighters into the Czech Republic between 2005 and 2007, presented at customs as originating in Laos, thus allowing the Czech importer to circumvent the anti-dumping measures on Chinese lighters.
The Commission asked Prague to pay the established duties that were irrecoverable (53,976,340 Czech koruny (CZK). According to the Commission, Regulation 1150/2000 on the system of own resources, which sets out the conditions under which a Member State is exempt from paying irrecoverable established entitlements to the EU budget, is not applicable.
The General Court allowed the Czech application in part. Stressing that the cooperation of the Member States with the Commission is an essential condition for the respect of customs legislation in the EU, it notes that OLAF was late in communicating its report containing the evidence collected during the inspection mission. Therefore, Prague cannot be blamed for not having acted immediately to establish the anti-dumping duties owed by the company that imported the Chinese lighters from Laos.
Furthermore, the General Court points out that where the customs authorities of the Member States consider that the verification of the customs declaration may result in a higher amount of import duty becoming payable than that resulting from the customs declaration, the release of the goods will be authorised after the lodging of a security sufficient to cover the difference between those amounts.
The Czech Republic was required to lodge a security for the recovery of the anti-dumping duties likely to be payable by the Czech company as of the adoption of the risk profile. The profile showed that there was a ‘reasonable suspicion’ of circumvention of customs legislation as of March 2006.
Contrary to what that Member State maintained, the lodging of a security for the recovery of the sum at issue required only the presence of evidence which could lead, when those goods were checked, in a higher amount of duty being determined than that resulting from the customs declaration.
It should be noted that, according to Regulation 1150/2000, the fact that the Czech company had ceased its activities before the submission of the OLAF report, could constitute a reason not imputable to the Czech Republic which could lawfully release it from its obligation to put the sum at issue at the EU’s disposal.
The General Court holds that there had been an unjust enrichment by the Union in the amount of the sum in dispute corresponding to the anti-dumping duties owed by the Czech company on imports of lighters made before the end of March 2006.
See the General Court’s judgment (in French): https://aeur.eu/f/1l4 (Original version in French by Mathieu Bion)