Case Note Court of Justice of the European Union Preliminary Ruling – Excise Duty on Certain Beverage Packaging: Case C‐198/14 (Valev Visnapuu)

• DOI: http://doi.org/10.1111/reel.12167
• Published date: 01 July 2016
• Author: Nicolas Sadeleer
• Date: 01 July 2016

Case Note

Court of Justice of the European Union Preliminary

Ruling –Excise Duty on Certain Beverage

Packaging: Case C-198/14 (Valev Visnapuu)

Nicolas de Sadeleer*

Both negative and positive harmonization are likely to

restrict Member States’regulatory powers to protect

the environment. Given that numerous environmental

fiscal measures are likely to restrict one way or

another inter-State trade, even though that may not be

their objective, Member States are reluctant to foster

green tax policies. Environmental protection measures

and the free movement of goods enshrined in the

Treaty on the Functioning of the European Union seem

thus to be at odds with one another. The case under

review raises some critical issues regarding the valid-

ity of environmental taxes on certain beverage pack-

aging. The Court of Justice of the European Union has

handed down a preliminary ruling that provides

important clarifications in that respect.

INTRODUCTION

A central feature of European Union (EU) environmen-

tal law is its uncanny relationship with the internal

market. Given that the internal market lies at the core

of the EU integration process, which is underpinned by

free movement principles removing obstacles to free

trade and competition, the relationship between eco-

nomic integration and environmental protection has

always been fraught with controversy. In ensuring that

tax policy does not serve protectionist interests, several

provisions of the Treaty on the Functioning of the Euro-

pean Union (TFEU)

1

are likely to prohibit the adoption

of fiscal instruments aimed at protecting the environ-

ment. A dividing line must be drawn between fiscal and

non-fiscal obstacles to the free movement of goods.

Indeed, when faced with a measure hindering inter-

State trade, the practitioner will have to distinguish the

prohibition of charges having equivalent effect to cus-

toms duties and of discriminatory internal taxation (ei-

ther Articles 28 and 30 TFEU; or Article 110 TFEU)

from quantitative restrictions on imports or exports or

any other measures having equivalent effect (Articles

34 and 35 TFEU). An excise duty that is clearly of a fis-

cal nature falls within the scope of Article 110 TFEU. In

this context, it is important to assess whether such a tax

discriminates directly or indirectly against foreign

products.

FACTS OF THE CASE

The Finnish law on excise duty on certain beverage

packaging sets an excise duty of €0.51 per litre of pack-

aged product. In order to foster a genuine waste man-

agement policy, beverage packaging is exempt from the

payment of that duty, if it is part of a return system

whereby beverage packaging is reused or recycled. This

exemption aims at encouraging manufacturers and con-

sumers to place on the market and purchase beverage

packaging that is part of a return system.

Case C-198/14 arose from a dispute between Mr Visna-

puu, acting on behalf of a company registered in Esto-

nia, and the Finnish Customs Administration,

regarding the imposition of excise duty on alcoholic

beverage packaging which is not part of a return sys-

tem.

2

That company sold to Finnish customers various

brands of beverages with low or high alcohol contents

via the internet and then delivered them directly to Fin-

nish buyers.

In selling these alcoholic beverages, the company failed

to pay the excise duties applicable when the packaging

is not part of a return system. The Court of First

Instance of Helsinki condemned Mr Visnapuu and

ordered him to pay the unpaid taxes to the Finnish Cus-

toms Administration.

Claiming, among others, that the Finnish law on excise

duty on certain alcoholic beverage packaging is indir-

ectly discriminatory and therefore contrary to Article

110 TFEU, Mr Visnapuu appealed against that decision.

The Helsinki Court of Appeal asked the Court of Justice

* Corresponding author.

Email: desadeleer.nicolas@gmail.com

1

Consolidated Version of the Treaty on the Functioning of the Euro-

pean Union, [2012] OJ C326/47.

2

ECJ, Case C-198/14, Valev Visnapuu, [2015] not yet reported.

ª2016 John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

261

RECIEL 25 (2) 2016. ISSN 2050-0386 DOI: 10.1111/reel.12167

bs_bs_banner

Review of European Community & International Environmental Law