On 30 April 2025, the European Court of Justice (“CJEU“) issued a judgment on the concept of repayment granted “in error” as laid down in Article 116(7) of the Union Customs Code (“UCC“). This article (116 (7) of the UCC) provides that if customs authorities have granted repayment or remission in error, the original customs debt shall be re-instated (insofar not time-barred). The CJEU ruled that the concept of repayment granted in ‘error’ should be interpreted broadly. It covers not only situations where the customs duties were repaid following an unintentional error by the customs authorities, but also situations where those authorities deliberately made a tariff classification that subsequently proved to be incorrect. Please find the judgement via the following link: CURIA – Documents
The dispute
In this case, goods were imported under a Combined Nomenclature (“CN”) subheading with a 8,7% customs duty. Following a Binding Tariff Information (“BTI”) issued to another operator, the importer applied for reclassification to another CN subheading corresponding to 0% customs duty and repayment of the initially paid customs duties. The Czech Customs Authorities granted the repayment.
In 2021, the importer was subject to a customs inspection. Following this inspection, it was concluded that the goods should have been classified under the initial CN subheading with a 8,7% customs duty. They relied on a decision by the European Commission which aimed at clarifying the customs classification of the goods at issue. Consequently, the Czech Customs Authorities reinstated the original customs debt under Article 116(7) UCC, arguing that the customs duties had been repaid due to an “error” of the Czech Customs Authorities in reclassifying the goods.
The Czech Supreme Administrative Court sought clarification from the CJEU on whether “error” under Article 116(7) UCC is limited to unintentional acts by customs authorities or if it also encompasses situations where a deliberate tariff classification is later deemed incorrect.
The CJEU ruling
The CJEU considers that the UCC does not contain a definition of the expression “in error” or that of “granted in error”. The wording of Article 116(7) UCC in the Czech, Polish and Slovak-language versions seem to suggest that the “error” should be committed unintentionally to reinstate the customs debt. However, in other language versions of the UCC terms are used that do not refer solely to an unintentional act on the part of the customs authorities. This broad interpretation of “in error” is also confirmed by the legal framework of customs debt recovery to protect the European Union’s own resources.
Additionally, the CJEU indicates that customs authorities are entitled to revoke issued BTIs by amending the tariff classification, when the tariff classification of the goods appears to be incorrect. This applies both following error of assessment and evolution in the thinking in relation to tariff classifications. This supports an interpretation of Article 116(7) UCC to the effect that it is possible for the customs authorities to reinstate the original customs debt in a case where they initially granted repayment of that debt on the basis of a tariff classification of the goods which subsequently proved to be incorrect.
The CJEU further emphasized that the reinstatement of the customs debt under Article 116(7) is subject to the condition that the reinstatement is made within a time limit of three years. During this limitation period, the customs authorities must be able to amend the customs debt. This could create legal uncertainty for economic operations, but the Court considered that they must accept the risk of customs authorities revising their decisions based on new information available to them (in this case, a classification decision).
In light of the foregoing, the CJEU rules that the scope of Article 116(7) UCC is therefore not limited to unintentional errors of the customs authorities, but might also cover intentional errors.
While this CJEU ruling is specific to the classification dispute at issue, the ruling underscores the critical importance of ensuring accurate tariff classifications from the outset and that relying solely on BTIs issued to other operators for similar goods does not provide absolute protection against future reassessments.
Please do get in touch with us if you would like to discuss the ruling in further detail and assess how it may impact your organization.
