Opinion of Advocate General Ćapeta delivered on 21 March 2024.

• Jurisdiction: European Union
• Date: 21 March 2024
• Court: Court of Justice (European Union)

Provisional text

OPINION OF ADVOCATE GENERAL

ĆAPETA

delivered on 21 March 2024 (1)

Case C‑494/22 P

European Commission

v

Czech Republic

(Appeal – Own resources of the European Union – Customs duties – Obligations of the Member States – Payment to the European Commission of amounts corresponding to non-recovered own resources – Investigation into the circumvention of anti-dumping duties of pocket lighters from Laos – European Union Anti-Fraud Office (OLAF) mission report – Action based on unjust enrichment – Articles 268 and 340 TFEU)

I. Introduction

1. The third time is the charm, as they say.

2. This case represents the third time the Czech Republic has sought to put before the EU Courts a dispute with the European Commission concerning the obligation to credit EU own resources. It follows attempts by that Member State to lodge, first, an action for annulment under Article 263 TFEU (to challenge the Commission’s letter requesting payment) (2) and, second, an action for failure to act under Article 265 TFEU (on account of the Commission’s failure to bring an infringement action against it). (3)

3. Indeed, in its landmark judgment in Czech Republic v Commission, (4) the Court considered that, where a Member State disagrees with the Commission regarding its obligations relating to own resources, an action for annulment is not possible, nor can the Commission be obliged to initiate infringement proceedings. However, it is open to the Member State to seek damages on account of the European Union’s unjust enrichment and to bring an action before the General Court to that end.

4. In practice, therefore, a Member State must credit the disputed amount of EU own resources to the Commission’s account to avoid having to pay default interest in case it loses the dispute. After that, when seeking repayment of that amount by the action based on the unjust enrichment of the European Union, the Member State can prove that the Commission was wrong.

5. The Czech Republic did just that. Now that the procedural hurdle has been overcome, the substantive question before this Court on appeal is whether that Member State or the Commission was correct in its understanding of the EU budgetary rules.

6. By the judgment of the General Court of 11 May 2022, Czech Republic v Commission (T‑151/20, EU:T:2022:281; ‘the judgment under appeal’), the General Court upheld, in part, the Czech Republic’s action for unjust enrichment. The General Court essentially found that the Czech Republic could be released from its obligation to pay certain amounts of own resources that had proved impossible to recover, and that it was entitled to wait for a mission report sent by the European Union Anti-Fraud Office (‘OLAF’) (5) before taking the necessary measures to enter those amounts in the relevant accounts.

7. On appeal, the Commission claims that the Czech Republic was required by EU law to pay all of the disputed amounts and that there has been no unjust enrichment of the European Union.

8. This case therefore raises important questions of principle and practice regarding the obligations of Member States under EU own resources law. The main issues are essentially two. The first requires an interpretation of the relevant EU law in order to determine whether a Member State’s late entry in the accounts precludes that Member State from being released from its obligations to make available own resources. The second relates to whether the Czech Republic was late in establishing and entering the EU entitlements in the particular circumstances of this case because it waited for OLAF’s mission report.

II. Background

A. The system of EU own resources and the relevant EU law

9. The European Union relies on a balanced budget that is financed mainly by its own resources. EU own resources are essentially revenue which accrue to the EU budget automatically, without the need for any subsequent decision by the Member State authorities. (6)

10. There are several types of EU own resources, including traditional own resources (‘TOR’), which are mainly customs duties on products imported from third countries. (7) TOR constitutes a direct source of revenue for the European Union, which is not dependent on Member State contributions. (8) It is completely defined by the EU legislature, (9) and the role of the Member States in connection with its collection and transfer is purely instrumental. (10)

11. However, since the European Union does not have its own tax collectors, the Member States must collect the customs duties and pay them (‘make them available’ in the terminology of the EU legislation) to the EU budget by depositing them in an account in the Commission’s name (while being permitted to keep a certain percentage for collection costs).

12. Thus, in a nutshell, TOR is EU money, but the European Union has to rely on the Member States to obtain it.

13. Consequently, the system of EU own resources is governed by a specific EU legal framework, (11) which is at the heart of this case. In that system, the Member States have no discretion and must make available own resources according to the rules (including time limits) laid down in the EU legislation on own resources. (12)

14. Relevant for this case are Decisions 2000/597 (13) and 2007/436, (14) along with Regulation 1150/2000. (15)

15. Regulation 1150/2000 lays down provisions on the making available of own resources to the Commission. This happens in three steps. First, a Member State must establish EU entitlements, which is governed by Article 2 thereof. Second, that Member State must enter those entitlements in the accounts in accordance with Article 6 thereof. Third, under Articles 9 and 10 thereof, the Member State must make the established amount available to the Commission by crediting the Commission’s account with the amount corresponding to those entitlements.

16. With regard to establishment of entitlements, Article 2(1) of Regulation 1150/2000 makes a link with the EU customs legislation. It provides that the European Union’s entitlement to TOR must be established ‘as soon as the conditions provided for by the customs regulations have been met concerning the entry of the entitlement in the accounts and the notification of the debtor.’ (16) According to Article 2(2) of that regulation, the date of establishment is ‘the date of entry in the accounting ledgers provided for by the customs regulations.’

17. With regard to entry of entitlements in the accounts, Article 6(1) of Regulation 1150/2000 obliges the Member States to keep specific accounts for own resources. (17) According to Article 6(3) thereof, within the specified time limit, (18) Member States must enter TOR in one of two accounts. In a regular situation, namely when they have collected amounts due or have received a guarantee from the debtor, they enter the entitlement in the normal account, referred to as the ‘A account’. However, if the amounts have not been recovered from the debtor or guaranteed, or if the guaranteed amounts have been challenged and might be subject to change, Member States enter EU entitlements in a separate account, referred to as the ‘B account’.

18. With regard to putting own resources at the disposal of the Commission, Article 9(1) of Regulation 1150/2000 provides that Member States must credit own resources to the account opened in the Commission’s name in accordance with the procedure set out in Article 10. Under Article 10(1) of that regulation, after deduction of collection costs, entry of own resources from the A account to the Commission’s account must be made within a time limit based on when the entitlements were established, whereas for own resources from the B account, the entry must be made within a time limit based on when the entitlements were recovered. According to Article 11 thereof, any delay in making available own resources to the Commission gives rise to the payment of interest.

19. Article 17(1) of Regulation 1150/2000 requires Member States to ‘take all requisite measures to ensure that the amount corresponding to the entitlements established under Article 2 are made available to the Commission as specified in this Regulation.’

20. However, for entitlements entered in the B account, Article 17(2) of Regulation 1150/2000, in the version applicable at the relevant time, provides that Member States are ‘released from the obligation to place at the disposal of the Commission the amounts corresponding to established entitlements which prove irrecoverable either: (a) for reasons of force majeure; or (b) for other reasons which cannot be attributed to them.’

21. According to Article 17(2) of Regulation 1150/2000, amounts of established entitlements are deemed irrecoverable ‘at the latest, after a period of five years from the date on which the amount has been established in accordance with Article 2’ or a final decision has been given, notified or published in the case of an appeal. Such irrecoverable amounts are definitively removed from the B account. (19)

22. In accordance with the procedure set out in Article 17(3) and (4) of Regulation 1150/2000, Member States are required to report to the Commission in cases where the irrecoverable amounts exceed EUR 50 000 (often referred to as write-off reports). The Commission is then to provide its comments, with a view to assessing the Member State’s justification for its release under Article 17(2), as occurred in this case.

B. Events leading to the proceedings before the General Court

23. This case arose out of a dispute between the Czech Republic and the Commission as to whether that Member State belatedly established certain amounts corresponding to EU own resources because it waited on information from OLAF. Below is the sequence of events that led to the present case.

24. In 2001, the European Union imposed anti-dumping duties on pocket lighters from China. (20) As a result, efforts to circumvent those duties...