French Customs: Right to Ex Officio Repayment of Unduly Levied Customs Duties

Background to the case

The case concerned a request for a preliminary ruling under Article 267 TFEU from the French Cour de cassation, in proceedings between YX and Logistíca i Gestió Caves Andorranes i Vidal SA, on the one hand, and the French Ministry of Economic Affairs and the French Customs Administration, on the other.

Between 1988 and 1991, importers paid customs duties in France, via a French customs agent, on goods from third countries destined for Andorra. At that time, the French customs authorities required that goods from third countries destined for Andorra be released for free circulation in the EU when transported through French territory. The European Commission drew France’s attention to the incompatibility of this practice with EU law, after which France undertook to abolish it. A notice to that effect was published for the attention of importers and exporters.

The customs agent sought repayment of the unduly levied import duties. However, the French courts held that only the importers themselves had legal standing and a legitimate interest to bring proceedings. YX and Caves Andorranes – having succeeded to the rights of the importers – then claimed repayment of the unlawfully levied duties.

The tribunal de grande instance de Toulouse (Regional Court, Toulouse, France) dismissed the claim. On appeal, the cour d’appel de Toulouse (Court of Appeal, Toulouse, France) held that, for the purposes of the ex officio repayment provided for in Article 2(2) of Council Regulation (EEC) No 1430/79 on the repayment or remission of import or export duties, and Article 236(2), third subparagraph, of the Community Customs Code (“CCC”), the French customs administration had to have at its disposal the data necessary to determine both the amount of duties to be repaid and the identity of each debtor, without having to conduct a disproportionately burdensome investigation. The judgment at first instance was upheld.

The claimants lodged an appeal in cassation, arguing that an ex officio decision to repay is subject only to the condition that the customs authorities determine and notify the customs debtor, within the three-year period, that import duties were unduly levied. The cour d’appel of Toulouse, they contended, had wrongly read additional requirements into the statutory provisions.

The legal question

The key question referred by the Cour de cassation to the CJEU was whether a national customs authority is required to proceed, on its own initiative, to repayment where it knows that import duties have been unduly levied, even in the absence of an explicit request from the person concerned.

The judgment of the Court of Justice

The Court recalled the fundamental principle of EU law that no one may be required to pay duties levied in breach of EU law. This principle derives from the settled case-law on unjust enrichment and the right to effective judicial protection.

Specifically, the Court held that:

• Repayment must occur automatically where the customs authority possesses all the information needed to identify the undertakings concerned and the amounts involved;
• There is no doubt that the levy was contrary to EU law.

While national legislation may set a reasonable time limit within which repayment must be made, such a limit may not be applied so strictly as to cause individuals or undertakings to lose their money in practice when the authorities know they are retaining it unlawfully. The Court emphasised the principle of effectiveness: national rules must not render the exercise of rights conferred by EU law impossible or excessively difficult.

Practical implications of the judgment

Although the judgment concerns the former customs legislation, it appears equally relevant under current law. Article 116(4) of the Union Customs Code (“UCC”) similarly requires customs authorities to proceed, on their own initiative, to repayment or remission where, within the time-limit laid down in Article 121(1) UCC after notification of the customs debt, they establish that an amount of import duty is repayable or subject to remission.

For economic operators, this judgment offers additional legal certainty: even in the absence of a repayment application, repayment may still take place in certain circumstances. Nevertheless, they must remain vigilant as to the time-limit for requesting repayment or remission: automatic repayment applies only where the customs authorities themselves are in full possession of the relevant information. The limitation period is three years from the notification of the customs debt.

For customs administrations, the ruling establishes a proactive duty to act where the unlawfulness of the levy is evident. Where the administration does not have, and could not reasonably have had, all the information necessary to repay the person who paid the unduly levied duties or their legal successor, it must, in light of its repayment obligation, take proportionate measures necessary and appropriate to obtain that information. Remaining passive in the face of known unlawful levies may be incompatible with EU law.

Customs advisers and legal practitioners can invoke this judgment as an additional argument in cases where the customs authorities refuse repayment or remission on the ground that the person concerned submitted the request out of time.

Conclusion

In Case C-206/24, the CJEU confirmed that the protection of economic operators takes precedence: where the customs authorities know they are unlawfully holding funds, those funds must be returned to the person concerned. This reinforces confidence in the rule of law and prevents undertakings from falling victim to purely formal pitfalls.