TC09657 - [2025] UKFTT 01208 (TC)

In 2007 Unitrading (a UK company) made a declaration to the Netherlands customs authorities for the release into free circulation of 86,400kg of fresh garlic bulbs. In the customs declaration Pakistan was cited as the country of origin and the declaration was accompanied by a certificate of origin from the Pakistani authorities. The Netherlands authorities had doubts over the origin of the goods but released them when Unitrading provided a guarantee. The Netherlands authorities took samples of the goods and had a portion of each sample analysed by a laboratory in the US, which reported that there was a 98% (at least) probability that the garlic had originated in China. At the importer’s request, a different portion of each sample was sent to the US laboratory, which (after examination) confirmed its earlier findings.

The Netherlands authorities assessed Unitrading to customs duties on the basis that the garlic did not originate in Pakistan and Unitrading appealed, disputing the examinations carried out by the US laboratory. The US laboratory said that it had compared the portions of samples it analysed with data it held but refused to disclose which regions of China and Pakistan the samples had been compared with as this was sensitive data to which access was restricted by law. In the context of Unitrading’s appeal against the assessment, the Netherlands court referred three questions to the CJEU. The first was whether Article 47 of the Charter of Fundamental Rights of the EU (“the Charter”) must be interpreted as precluding the proof of the origin of imported goods adduced by the customs authorities resting on the results of an examination carried out by a third party with regard to which that third party refuses to disclose further information either to the customs authorities or to the customs declarant, as a result of which it is made difficult or impossible to verify or disprove the correctness of the conclusions reached.

Fundamentally, Unitrading submitted that, if the judicial review guaranteed by Article 47 of the Charter is to be effective, the person concerned must be able to ascertain the reasons upon which the decision taken in relation to him is based and must have the right to examine all the documents or observations submitted to the court for the purpose of influencing its decision, and to comment on them.

The Czech government pointed out that if the customs authorities intend to base their decision on the fact that the statement by a declarant of the country of origin does not correspond to the reality, they must bear the burden of proof of that allegation. Only an inspection report showing clearly which procedure has been used and the result to which it has led, would be sufficiently clear to enable the customs authorities to assess the credibility and relevance of the results and the person concerned usefully to put forward his view on those results, can be regarded as probative.

The Netherlands government’s position was that it was not possible for the customs authorities, Unitrading or the referring court to learn the full details of the examinations carried out by the American laboratory. Nevertheless, having regard to the reliability of that laboratory, the authorities were entitled legitimately to consider that the reports on the results of the examinations constituted sufficient proof. For the judicial review guaranteed by Article 47 of the Charter to be effective, the person concerned must, inter alia, be able to ascertain the reasons upon which the decision taken in relation to him is based. That requirement was met in that case.

The Court observed that Unitrading knew of the grounds on which the decision concerning it is based, that it was aware of all the documents and observations submitted to the court with a view to influencing its decision and that it was able to comment on them before that court. Having observed (at [23]) that there is no legislation at EU level governing the concept of proof and that any type of evidence admissible under the procedural law of the Member States in proceedings similar to those laid down in Article 243 of the Customs Code is in principle admissible, it said that the results of the US laboratory’s examinations “merely constitute evidence which both the customs authorities and the Netherlands courts, also taking account of the arguments and evidence submitted by Unitrading, were able to regard as adequate to establish the true origin of the goods”. At [26] it held that Unitrading’s right to effective judicial protection, referred to in Article 47 of the Charter, had not, in principle, been infringed as it could challenge the weight to be attached to evidence which the parties and the court could not fully verify.

At [27] the Court observed:

“Since Article 245 of the Customs Code provides, in that context, that the provisions for the implementation of the appeals procedure provided for in Article 243 of that code are to be determined by the Member States, it must be held that it is for the domestic legal system of each Member State to lay down the detailed procedural rules governing those actions, provided that such rules are not less favourable than those governing similar domestic actions (principle of equivalence) and that they do not render in practice impossible or excessively difficult the exercise of rights conferred by Community law (principle of effectiveness). Those considerations also apply with regard, specifically, to evidential rules (see, to that effect, judgment in Direct Parcel Distribution Belgium, C-264/08, EU:C:2010:43, paragraphs 33 and 34 and the case-law cited).”

The Court held that Unitrading’s right to effective judicial protection would not necessarily be precluded by admitting the evidence from the US laboratory, provided that the principles of effectiveness and equivalence were upheld, which was for the national court to decide. At [28] and [29] it explained:

“In order to ensure compliance with the principle of effectiveness, if the national court finds that the fact of requiring the person liable for the customs debt to prove the place of origin of the goods declared, in that the onus is on him to refute the relevance of indirect evidence used by the customs authorities, is likely to make it impossible or excessively difficult for such evidence to be produced, since inter alia that evidence relates to data which the person liable could not possess, it is required to use all procedures available to it under national law, including that of ordering the necessary measures of inquiry (see, to that effect, judgment in Direct Parcel Distribution Belgium, EU:C:2010:43, paragraph 35 and the case-law cited).

Nevertheless, where the national court, after having used all procedures available to it under national law, concludes that the true origin of the goods concerned is different from that declared and that the imposition on the declarant of additional customs duties, or even a fine, is therefore justified, Article 47 of the Charter does not preclude a decision to that effect being adopted by that court.”