Vice-President R Silva de Lapuerta,
Presidents of Chambers J‑C Bonichot, A Arabadjiev, M Safjan, S Rodin,
Judges J Malenovský, L Bay Larsen, T von Danwitz (Rapporteur), C Toader, C Vajda, F Biltgen, K Jürimäe
Advocate General M Bobek
The British overseas territory of Anguilla was among the Overseas Countries and Territories (“OCTs”) subject to special arrangements for association set out in articles 131EC to 137EC of the EC Treaty (now articles 198FEU to 204FEU of the FEU Treaty). According to article 131EC (now article 198FEU), the purpose of association was to promote the economic and social development of the countries and territories and to establish close economic relations between them and the European Union (“EU”). Council Decision 91/482/EEC (“the OCT Decision”) was enacted in order to further those aims and provided, by article 101(2), that products not originating in the OCT but which were in free circulation in an OCT and were re-exported as such to the EU could be imported into the EU free of customs duties providing that they, inter alia, were accompanied by an export certificate. The authorities of Anguilla issued export certificates for the re-export to the EU of shipments of aluminium originating in third countries that had been transhipped through Anguilla. The European importers into Anguilla were initially paying customs duties there and obtained export certificates for those imports, and were subsequently granted “transport aid”. The Anguillan company which set up the transhipment scheme then obtained a refund of the amounts paid by way of that aid from the Anguillan authorities. The UK Revenue and Customs Commissioners, which investigated whether the transhipment scheme was in conformity with article 101(2) of the OCT Decision, concluded that the “transport aid” payments constituted a partial refund of the customs duties paid in Anguilla contrary to article 101(2) of the Decision. They sent the results of their investigation to the European Commission’s Anti-Fraud Co-ordination Unit which published a communication concluding that the goods exported were not eligible for duty-free import into the EU, that the export certificates issued were incompatible with article 101(2) and recommending that the UK authorities reject all export certificates issued by the Anguillan authorities and take precautionary measures. After that communication had been published, the transhipment scheme continued and the Italian authorities granted remission of import duties in respect of aluminium imports from Anguilla upon submission of export certificates issued by the Anguillan authorities. Subsequently, the European Commission requested the UK to provide compensation for the loss of the EU’s own resources which arose as a result of the wrongful issue of the export certificates, hindering the Italian authorities in the collection of customs duties on the imports in question. Since the UK did not provide that compensation, the European Commission applied to the Court of Justice of the European Union for a declaration that, by failing to compensate for the loss of own resources which should have been made available to the EU budget had export certificates not been issued in breach of article 101(2) of the OCT Decision, the UK had failed to comply with its obligations under the principle of sincere co-operation pursuant to article 4(3)TEU of the EU Treaty.
On the European Commission’s application—
Held, allowing the application, (1) the issuing of export certificates by the Anguillan authorities was governed by EU law and, according to the Council Decision 91/482/EEC (“the OCT Decision”), those certificates, constituting evidence of compliance with article 101(2) of that Decision, had to be issued by the authorities of the overseas territory. Therefore, when issuing such certificates, those authorities were obliged to comply with article 101(2) of the Decision. The existence of special relations, within the meaning of article 131EC of the EC Treaty (now article 198FEU of the FEU Treaty), between the UK and Anguilla created a specific liability on the part of the member state vis-à-vis the EU when the authorities of the overseas territory issued export certificates in breach of the OCT Decision. It followed from the principle of sincere co-operation laid down in article 4(3)TEU of the EU Treaty that the member states were obliged to take all measures necessary to guarantee the application and effectiveness of EU law. In view of the preferential and derogating nature of the customs arrangements that applied to products not originating in the OCTs, that obligation should be fulfilled all the more strictly in the present case. Therefore, the liability vis-à-vis the EU, of the member state responsible for an OCT extended, by virtue of article 4(3)TEU, to any error made by the authorities of that OCT, in the context of the issue of export certificates. Accordingly, the UK was liable vis-à-vis the EU, for any issue by the Anguillan authorities of export certificates in breach of the OCT Decision (judgment, paras 82, 86, 93–95, 127, operative part, para 1).
(2) Pursuant to the principle of sincere co-operation, the member states had to take all necessary measures to nullify the unlawful consequences of an infringement of EU law. It followed that the member state liable vis-à-vis the EU for the wrongful issue of export certificates was bound to compensate the resulting loss of own resources, together with any default interest. Accordingly, by failing to compensate the loss of own resources resulting from the wrongful issue by the authorities of Anguilla of export certificates in respect of imports from Anguilla, the UK had failed to fulfil its obligations under article 4(3)TEU (judgment, paras 96, 98, 102, 127, operative part, para 1).
A Caeiros, J-F Brakeland, L Flynn and S Noë, agents, for the European Commission.
Kieron Beal QC and Paul Luckhurst (instructed by The Treasury Solicitor) for the United Kingdom.
MK Bulterman, P Huurnink and J Langer, agents, for The Netherlands, intervening in support of the United Kingdom.