The iconic 1987 song by The Beastie Boys has lent this article its title, while the Court of Appeal (Superior Jurisdiction) gave to Malta its judgment on July 21 on appeal application 94/09/1 JPG.
This case contested the actions of our Dwana (Customs) which had, immediately upon importation, temporarily retained an amount of alcohol imported from Sicily and meant for a private party (festin privat). The applicant also sought damages for the related actions by Customs.
This appeal judgment confirmed the first instance judgment delivered on April 6, 2016, by the First Hall of the Civil Court, save for altering the apportionment of judicial expenses for the parties in litigation.
As to the facts, the applicant had sought to import a quantity of alcohol for a private party from Sicily, part of an EU country, and this is highly relevant as the judgment touches on fundamental principles in EU law, namely the free movement of goods within the Union.
The Court of Appeal aptly noted that the aims of the original action were not solely limited to the interests affected by the particular circumstances of the case (though those interests were indeed affected), but the original action essentially sought to attack the system itself as adopted by Customs in performing inspections and the criteria used to decide which importer was importing for personal use and which was importing for commercial purposes.
Customs was trying to justify its behaviour upon importation on the basis of curbing abuse by importers who declared an importation for personal use, while it could well be that in reality it was a commercial activity masked as a personal one to benefit from particular fiscal exemptions under Maltese and EU law. This sounds sensible upon first thought, but it is not fair, and it is probably borne out of a lack of proper resources and a desire for an easy and workable way out to stem abuse.
Fairness demands that the end does not justify the means, and the Court of Appeal trashed this administrative attitude in no uncertain terms. It stressed that it can never agree to an argument that a priori determines action for all, including for those within their rights, on the basis of actions by wrongdoers.
Citing EU jurisprudence, it moreover stressed that departing from the fundamental principle of the free movement of goods within the EU can only be allowed in extraordinary circumstances, of which in this case there were none to be seen. To add insult to injury, it resulted that the whole impasse was due to administrative misunderstandings on the part of Customs alone.
In the end, the applicant obtained an important victory through the declaration by our highest courts that the system adopted by Customs was totally unfit for purpose
Turning to the specific, what was Customs doing? In essence, it subjected all alcohol importations from an EU country, or more specifically from Sicily by catamaran, to inspections upon arrival. The applicant had contended that this amounted to what is known under EU law as a ‘measure equivalent to quantitative restriction’ (MEQR), and referred to the Rewe Zentralfinanz (Case 4/75 decided by the Court of Justice of the EU) case in which plant products were subjected to compulsory inspections upon entry into Germany, as provided by German legislation.
The first instance court aptly stated that the said case was different, as the actions performed by Customs in Malta were not provided by legislation, and thus the first court disagreed with the applicant in making reference to the aforesaid case. However, it proceeded to analyse the evidence as to the actions performed by Customs officers and found that in the end, by administrative practice and behaviour, the actions performed amounted to a system of mandatory inspections upon arrival. It expressed itself as disconcerted by the same actions, in so far as to import alcohol for personal use from an EU country, one needed to make a prior request to Customs for so doing, and if such a request is not made, the alcohol would be seized automatically.
In this case, the first court went further and said it was even worse that while the applicant had accordingly made said request, he was still subjected to an inspection and interrogation by seven Customs officers and members of the executive police. The first court felt disconcerted further by the fact that the Customs officer leading the inspection did not bother to contact his superior, who was actually on duty, but had no qualms to have the applicant interrogated for an hour together with six other Customs officers and the police. This is also being referred to as the applicant had initiated the action against Customs, as a body, and against the particular Customs officer in his personal capacity.
The Customs officer got away with it because it was found that he was following departmental praxis, but the first court nonetheless chastised the same as a Customs officer, and thus as representing Customs on the field.
The first court had found that the actions by Customs constituted an MEQR, and as such was in violation of EU law as there were no reasons to depart from the fundamental principle of the free movement of goods. Indeed, the Court of Appeal stated that in end only one thing could result: that lacking sufficiently good reasons justifying any restrictions on the free movement of goods, such movements must be totally unshackled. Pointing out that customs and fiscal legislation required a restrictive interpretation under our law, the Court of Appeal found that there were certainly no such sufficiently good reasons.
It must be said that, in fact, the alcohol was released by Customs within a day from retention but this did not alter the fact that a violation of rights was still found. Due to this and lack of evidence as to the damages, no damages were accorded to the applicant. However, inthe end, the applicant obtained an important victory through the declaration by our highest courts that the system adopted by Customs was totally unfit for purpose.
Edric Micallef Figallo is an associate at Azzopardi, Borg and Associates Advocates.