Court of justice confirms strict approach to customs valuation under the CCC for successive sales

Summary of Facts

Massimo Dutti purchased goods through a Swiss group entity. The clothing items were shipped directly from Asia to Spain, with part of the shipment subsequently re-exported. For the years 2014–2015, the customs value declared was based on the price of the first sale — that is, the sale by the manufacturer to the Swiss entity. However, the customs authorities took the view that it was the second sale, from the Swiss entity to Massimo Dutti, which was relevant and adjusted the customs value accordingly. The matter was brought before the Spanish courts.

Preliminary Questions

The referring Spanish court noted that part of the clothing was released for free circulation upon entry into the Union, while another part was placed under the customs warehousing procedure, granting the option to subsequently release the goods for free circulation or re-export them. The choice between direct release and warehousing depended on the tariff preferences applicable at the time when the goods were introduced into the customs territory of the EU.

Against this background, the court questioned how the expression “sale for export to the customs territory of the Union” should be interpreted. Does this concept relate solely to the physical entry of goods into the Union, irrespective of the customs procedure applied and their final destination? Or does it require that, at the time of the sale, it is already established that the goods are intended for marketing within the EU?

The Spanish court therefore referred the following questions to the CJEU:

• Is it sufficient, for the classification as a “sale for export,” that the goods physically/geographically enter the Union under a sales contract, irrespective of their further use or customs procedure? Or must it be shown that they are destined for the EU market?
• Is it necessary to prove that the goods are actually intended to be marketed within the Union?

Judgment of the Court of Justice

In its ruling, the Court of Justice confirmed that:

• Mere physical entry into the EU is not sufficient to qualify the first sale as a “sale for export to the EU”;
• It must already be established, at the time of the first sale, that the goods are destined for marketing on the EU market;
• Subsequent events (e.g. actual release for free circulation, re-exportation) are not decisive as proof; and
• Where the destination of the goods is uncertain or flexible, the first sale may not be used as the transaction value.

The Court thus remains faithful to the principle that customs valuation must reflect the actual economic value of the goods and that “shopping” between successive sales is incompatible with the transaction value system.

Relevance Under the UCC

This judgment concerns a period governed by the former CCC. Under the current Union Customs Code (UCC), the first sale rule has effectively been abandoned:

• The transaction value is based on the last sale occurring immediately before the goods enter the EU (Article 70 UCC);
• Relying on an earlier sale is no longer the default approach and is only conceivable in very limited and exceptional cases (and is practically ruled out in most circumstances).

This judgment therefore not only confirms the strict conditions that applied under the CCC but also aligns with the legal position under the UCC: the customs value is derived from the last economically relevant transaction prior to entry into the Union. In short: the judgment reaffirms that earlier sales cannot be strategically invoked and that the commercial intention to place goods on the EU market is central to customs valuation — both then and now. The relevant question is not whether the sale envisaged that the goods would pass through EU customs territory, but whether it was established at the time of the sale that they would be marketed there.