In a judgment delivered in Case C-781/23, Malmö Motorrenovering AB v General Representative of the Customs Authority, the Court of Justice of the European Union (the Court) ruled that an extension of the temporary importation period under the Union Customs Code (UCC) does not require the existence of ‘exceptional circumstances’ if the total duration remains within the 24-month limit set by Article 251(2) UCC. This interpretation clarifies the conditions under which non-EU goods, such as a motor racing car temporarily brought into the EU, may remain without incurring a customs debt—provided the delay does not exceed the 24-month cap and there is no intent to deceive.
Background and facts
In 2019, Malmö Motorrenovering AB, a Swedish company, imported a motor racing car from the United States of America (USA) under the EU’s temporary admission procedure under the Union’s Customs Code (UCC). The car was intended for use in several racing competitions within the EU, with the final event scheduled for 8 September 2019. However, the Swedish Customs Administration (Tullverket) set the re-exportation deadline for 30 July 2019—well before the final race.
The car was ultimately re-exported on 19 September 2019, after the deadline. Although there was no evidence of fraudulent intent, the delay triggered a customs debt of approximately SEK 101,959 (about €8,973) and VAT of SEK 280,387 (about €24,676). Malmö Motorrenovering AB challenged the imposition of this custom debt by the Swedish customs authority, arguing that the delay was minor, and did not affect the integrity of the EU customs procedure.
The case escalated through the Swedish courts. 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 Appeal of Jönköping (Kammarrätten i Jönköping), it overturned that decision, and ruled in favour of the Swedish Customs Administration. The case thus reached the Supreme Administrative Court of Sweden (Högsta förvaltningsdomstolen) which referred questions of EU customs law to the Court of Justice of the European Union (the Court) under the reference for a preliminary ruling procedure. In essence, the referring court was seeking an interpretation of Article 251 of the UCC on temporary import of non-EU goods into the EU, for subsequent re-export outside the EU for specific purposes.
‘Temporary purposes’
‘Temporary purposes’ is one of the EU customs special procedures set out in the UCC, sometimes referred to as a ‘carnet’ (though not necessarily an ATA Carnet, which is governed by a separate international convention). 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, which in this case, covers motor racing cars. 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.
For such EU’s temporary admission procedure, 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.
Applicable law
Article 251 UCC regulates the time under which the goods may remain within the EU for such ‘temporary purposes’.
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 can be incurred.
Judgment
The Court was asked to clarify whether ‘exceptional circumstances’ are required for any extension under Article 251(3) UCC, or only when the total period would exceed 24 months.
The Court ruled that exceptional circumstances are only required when the extension would cause the total period to exceed 24 months. In this case, the initial period granted (until 30 July 2019) and the actual re-exportation date (19 September 2019) were well within the 24-month limit. Therefore, Malmö Motorrenovering AB could have been granted an extension without needing to prove exceptional circumstances.
The Court emphasised that whilst customs exemptions like temporary purposes must be interpreted strictly, it also acknowledged that national customs authorities had set an arbitrary deadline, that did not align with the intended use of the motor racing car.
The CJEU therefore concluded that if the other conditions under the UCC are met—namely, no deception and proper regularisation—then the customs debt should be extinguished, a clear victory for Malmö Motorrenovering AB.
Analysis
First, practically, it clarifies exceptional circumstances, by through its interpretation of Article 251 UCC, distinguishes between extensions within the 24-month cap (no exceptional circumstances needed), and extensions beyond 24 months (exceptional circumstances required).
Second, the Court implicitly criticised the Swedish customs Administration (Tullverket) for the imposition of arbitrary deadline, without sufficient explanation, and without accounting for the purpose to which the applicant had sought the carnet in the first place. Thus, the case highlights the need for national customs authorities to be accommodating to the objective of such temporary procedures by parties seeking to bring goods into the EU for such exhibits.
Third, the Administrative Court of Linköping (Förvaltningsrätten i Linköping) can hold its head high for correctly ruling in favour of the applicant at first instance. Less can be said about the judgment of the Administrative Court of Appeal of Jönköping (Kammarrätten i Jönköping), which ought to have made a reference for a preliminary ruling itself, given its different view.
Fourth, the judgment ensures that the customs procedures remain fair and does not punish good-faith private actors who are trying to make use of such temporary procedures.
This judgment reinforces the importance of proportionality and clarity in customs enforcement and serves as a reminder that actions of good faith actors should not automatically trigger punitive financial consequences. Although the case arose in Sweden, the ruling has EU-wide implications. National customs authorities across the EU must now apply Article 251 UCC in line with this interpretation.
Read the judgment
The judgment of the Court in Case C-781/23, Malmö Motorrenovering AB v General Representative of the Customs Authority, delivered in December 2024, can be read here.