CJEC, October 26, 1982, No 221-81

The court

1 By order of 10 june 1981, received at the court on 22 july 1981, the finanzgericht (finance court) Düsseldorf referred to the court for a preliminary ruling under article 177 of the eec treaty a number of questions on the application of the common customs tariff to smuggled drugs.

2 The dispute in the main proceedings concerns the determination of the custom duties applicable to quantities of heroin and cocaine which were purchased by the plaintiff in the main proceedings on the black market in germany and the netherlands and re-sold by him in contravention of the betaubungsmittelgesetz (german drugs law). For those offences he was sentenced by a german criminal court to eight years ' imprisonment.

3 It is pointed out in the order for reference that, in its judgment of 5 february 1981 in case 50-80 horvath (1981) ecr 385, the court stated that the introduction of the common customs tariff no longer left a member state the power to apply customs duties to drugs which had been smuggled in and destroyed as soon as they had been discovered but did leave it full freedom to take criminal proceedings in respect of offences committed.

4 Since in the present case the smuggled drugs were not discovered and therefore could not be seized and destroyed, the finanzgericht has asked whether in its above-mentioned judgment the court, in referring to destruction of the drugs, regarded such destruction as an essential pre-condition for the solution adopted. It adds that, if such were the case, the question whether a customs debt arose would often depend on the mere chance of discovery.

5 In those circumstances, the national court has submitted various questions for a preliminary ruling, the first being as follows:

' ' Are the provisions of the eec treaty on the customs union (articles 9 (1) and 12 to 29) to be interpreted as meaning that since the introduction of the common customs tariff a member state has no longer been authorized to levy customs duties on smuggled drugs which in the event of discovery would have to be confiscated and destroyed?

' '

6 Before that question is dealt with, it is appropriate to consider the preliminary question whether the unlawful importation into the community of illegally marketed drugs gives rise to a customs debt.

7 So phrased, the question does not concern the problem of the unlawful importation of products in general but that of the unlawful importation of drugs.

8 As the court pointed out in the horvath judgment cited above, drugs such as morphine, heroin and cocaine display special features in so far as their harmfulness is generally recognized and their importation and marketing are prohibited in all the member states, except in trade which is strictly controlled and limited to authorized use for pharmaceutical and medical purposes.

9 This legal position is in conformity with the single convention on narcotic drugs, 1961, (united nations treaty series 520, no 7515), to which all the member states are now parties. In the preamble to that convention the parties state that addiction to narcotic drugs constitutes a serious evil for the individual and is fraught with social and economic danger to mankind; they declare that they are conscious of their duty to prevent and combat that evil, whilst recognizing that the medical use of narcotic drugs is indispensable for the relief of pain and that adequate provision must be made to ensure the availability of narcotic drugs for such purposes. Pursuant to article 4 of the convention the parties are to take all the measures necessary to limit exclusively to medical and scientific purposes the production, manufacture, export, import, distribution of, trade in, use and possession of drugs.

10 As a result, drugs which are not confined within channels of distribution strictly controlled by the competent authorities for use for medical and scientific purposes are subject, by definition, to a total prohibition of importation and distribution in all the member states.

11 In practice, as soon as such drugs are discovered they are seized and destroyed in accordance with the national drugs laws, except in a number of rare cases where the product seized lends itself to medical or scientific use and is released into controlled channels of distribution, whereupon it becomes subject to customs duties.

12 On the other hand, drugs distributed through illegal channels are not subject to customs duties when they remain within such channels, regardless of whether they are discovered and destroyed or are not detected by the authorities.

13 A customs debt cannot therefore arise upon the importation of drugs which may not be marketed and integrated into the economy of the community. The introduction of the common customs tariff, provided for in subparagraph (b) of article 3 of the treaty, falls within the scope of the objectives assigned to the community in article 2 and the guide-lines laid down in article 29 for the operation of the customs union. Imports of drugs into the community, which can give rise only to repressive measures, fall wholly outside those objectives and guide-lines.

14 That view is confirmed by the provisions of regulation (eec) no 803-68 of the council of 27 june 1968 on the valuation of goods for customs purposes (official journal, english special edition 1968 (i), p. 170) and by those of council directive 79-623-eec of 25 june 1979 on the harmonization of provisions laid down by law, regulation or administrative action relating to customs debt (official journal, 1979, l 179, p. 31). The preamble to that directive states specifically that the moment when the customs debt arises must be defined in the light of the economic nature of the duties on imports and in terms of the conditions under which the goods subject to import duties are integrated into the economy of the community. In such circumstances, no customs debt can arise when drugs are imported through illegal channels of distribution, since they must be seized and destroyed upon discovery instead of being put into circulation.

15 Moreover, as the national court points out, there is no justification for making a distinction in that regard between drugs which have not been discovered and those which are destroyed under the control of the competent authorities, since if such a distinction were made the application of customs duties would be subject to the chance of discovery.

16 It is apparent from the foregoing that no customs debt arises upon the importation of drugs otherwise than through economic channels strictly controlled by the competent authorities for use for medical and scientific purposes.

17 This finding is without prejudice to the powers of member states to take criminal proceedings in respect of contraventions of their drugs laws and to impose appropriate penalties, including fines.

18 In the light of this answer, it is unnecessary to deal with the other questions raised by the national court.

Costs

19 The costs incurred by the government of the french republic and by the commission of the european communities, which have submitted observations to the court, are not recoverable. As these proceedings are, in so far as the parties to the main proceedings are concerned, in the nature of a step in the proceedings before the national court, the decision on costs is a matter for that court.

On those grounds,

The court,

In answer to the question referred to it by the finanzgericht Düsseldorf by order of 10 june 1981, hereby rules:

No customs debt arises upon the importation of drugs otherwise than through economic channels strictly controlled by the competent authorities for use for medical and scientific purposes.