By decision of 12 December 2023, the Supreme Administrative Court of Sweden (Högsta förvaltningsdomstolen) has decided to make a reference for a preliminary ruling to the Court of Justice of the European Union (CJEU) under Article 267 TFEU, seeking an interpretation of Article 251 of the Union’s Customs Code (UCC) on temporary import of non-EU goods into the EU, for subsequent re-export outside the EU for specific purposes.
Article 250 UCC provides for a procedure under which goods may be imported into the EU from outside the EU for ‘temporary’ purposes’, which are subsequently re-exported outside the EU. The subsequent Article 251 UCC regulates the time under which the goods may remain within the EU for such ‘temporary purposes’.
The ‘temporary purposes’ entry, sometimes referred to a a ‘carnet’, can relate to goods that are professional equipment and items related to exhibitions or demonstrations. This includes sports goods like sports jerseys, sports equipment, and the likes.
‘Temporary purposes’ is one of the EU customs special procedures. By its nature, the goods must have a specifically intended use, and its importation is time-limited. Wear and tear of the goods due to normal use, as well as depreciation, is allowed, and whilst the goods may undergo repairs, checks and adjustments required by maintenance, the characteristics of the goods may not be improved whilst they are within the EU.
Article 251(1) UCC provides,
‘The customs authorities shall determine the period within which goods placed under the temporary admission procedure must be re-exported or placed under a subsequent customs procedure. Such period shall be long enough for the objective of authorised use to be achieved.’
Article 251(2) UCC provides,
‘Except where otherwise provided, the maximum period during which goods may remain under the temporary admission procedure for the same purpose and under the responsibility of the same authorisation holder shall be 24 months, even where the procedure was discharged by placing the goods under another special procedure and subsequently placing them under the temporary admission procedure again.’
Article 251(3) UCC provides,
‘Where, in exceptional circumstances, the authorised use cannot be achieved within the period referred to…, the customs authorities may grant an extension, of reasonable duration of that period, upon justified application by the holder of the authorisation.’
If the ‘temporary purposes’ procedure is not correctly followed, a customs debt is incurred by carnet holders.
The facts of the case at hand in Case 3737-22, Malmö Motorrenovering AB, at the Supreme Administrative Court concern a motor racing car imported into Sweden from the USA. The Swedish Customs Administration (Tullverket) approved the temporary import, but provided a final date upon which it had to be re-exported that was before the car was set to be used. After the applicant had re-exported the motor racing car past this date, the Customs Administrative imposed a fine, which the applicant is challenging.
The case concerns Article 251 UCC and the preconditions to extend an already established time during which goods may remain under the procedure for temporary admission. The parties come to different interpretations of Article 251 UCC, and they are not allow. At first instance, the Administrative Court of Linköping (Förvaltningsrätten i Linköping) ruled in favour of the applicant. However, on appeal at the Administrative Court of Jönköping (Förvaltningsrätten i Jönköping), it overturned that decision, and ruled in favour of the Customs Administration. It is now up for the Supreme Administrative Court to decide, but it decided to ask the CJEU for an interpretation of Article 251 UCC as a whole. It’s referred questions are:
Should Article 251 UCC be interpreted so that the reference in paragraph 3 to points 1 and 2 mean that the requirement for exceptional circumstances in point 3 only applies in the event that an already granted deadline together with a requested extension would mean that the time during which the goods in total allowed to remain during the current procedure exceeds 24 months?
Or, in the alternative,
Should Article 251 UCC be interpreted so that the requirement of exceptional circumstances in paragraph 3 is applicable to all applications for extension, i.e. although it already the granted deadline together with the desired extension does not exceed that deadline of 24 months prescribed in paragraph 2?
The CJEU will likely rule in the case in late 2024 or early 2025.
A copy of the decision of the Supreme Administrative Court of Sweden (Högsta förvaltningsdomstolen) to make Case 3737-22, which has yet to be assigned a case number at the CJEU, is available here.