delivered on 31 January 1985 (*1)

Mr President,

Members of the Court,

1. These proceedings raise the question of the territorial scope of the rules on duty-free imports by persons living in frontier zones.

The plaintiff in the main action bought 250 cigarettes in a Netherlands district near the frontier some 80 km from his home in the Federal Republic of Germany but when he crossed into Germany, the German customs refused to allow him to import more than 40 cigarettes duty-free.

The decision of the German customs authorities is based on the provisions of the national regulation on the exemption from import duties of goods in travellers' personal luggage. The regulation lays down special rules for duty exemptions for importations by frontier-zone residents: in the case of cigarettes the exemption relates only to 40 units (whereas as a general rule it is 300 units) when the importation is made by inhabitants of a municipality near the frontier whose journey into ‘the opposite territory considered foreign from the customs point of view has not exceeded 15 km in depth’. (1)

That provision is at the centre of the proceedings between the plaintiff and the German customs administration. Whereas the plaintiff considers the opposite territory to be constituted by an area 15 km in radius the centre of which is the customs post nearest the district of residence, the customs administration takes the view that it covers a strip 15 km in depth running alongside the frontier.

The Finanzgericht Düsseldorf had doubts whether the latter interpretation was compatible with Regulation (EEC) No 1544/69 of the Council of 23 July 1969 on the tariff applicable to goods contained in travellers' personal luggage and therefore submitted the following question to the Court:

‘Is the expression “imported: in frontier-zone travel” in Article 4 of Regulation (EEC) No 1544/69 of the Council of 23 July 1969 (Official Journal, English Special Edition 1969 (II), p. 359) to be interpreted as referring to imports effected by residents of a municipality situated near the frontier, whose travel in the customs territory on the other side thereof cannot be shown to have extended beyond a strip of land 15 kilometres wide on that side, regardless of whether they reentered in the vicinity of their municipality situated near the frontier or at another place, much farther away?’

2. Before answering that question, it is appropriate to make the following preliminary observations.

As the Commission has pointed out, the Council regulation to which the German court refers concerns only exemption from Common Customs duties for ‘goods contained in their personal luggage of travellers coming from third countries’. (2) It appears, however, from the request for a preliminary ruling that the contested importation relates to products purchased in the Netherlands where the plaintiff had gone.

In such a case, the relevant Community provisions are not the aforesaid regulation but the Council Directive 69/169 of 28 May 1969 (3) relating to exemption from turnover tax and excise duty on imports in international travel, Article 2 (1) of which provides that ‘exemption from turnover tax and excise duty on imports shall apply to goods contained in the personal luggage of travellers coming from Member States of the Community’. (4)

Accordingly, the provision whose interpretation would make it possible, in conformity with the case-law of the Court, to give a helpful answer to the national court is Article 5 of Directive 69/169 which provides :

‘(1) Member States may reduce the value and/or quantity of the goods which may be admitted duty-free ..., where such goods are imported from another Member State by persons resident in the frontier zone of the importing Member State or in that of the neighbouring Member State, by frontier-zone workers, or by the crew of the means of transport used in international travel.’

(5) For the purposes of paragraphs 1, 2 and 4: “frontier zone” means a zone which, as the crow flies, does not extend more than 15 kilometres from the frontier of a Member State. Each Member State must, however, include within its frontier zone the local administrative districts, part of the territory of which lies within the zone.’ (5)

In any event let me, in passing, point out along with the Commission that Article 49 (2) of Council Regulation No 918/83 of 28 March 1983, which has been applicable since 1 July 1984, ‘setting up a Community system of release from customs duty’ (6) and repealing Regulation No 1544/69, (7) is essentially a repetition of Article 5 (5) of Directive 69/169. Thus the scope of the interpretation in respect of all the provisions will extend beyond the present case since it is a question of defining the concept of frontier zone.

In short, I propose to reformulate the question as follows:

‘Is the expression “frontier zone” ... which, as the crow flies, does not extend more than 15 km from the frontier of a Member State, in Article 5 (5) of Directive 69/169, as amended by Directive 72/230 of 12 June 1972, to be interpreted as covering imports by a resident of a municipality close to the frontier whose travel in the customs territory on the other side can be shown not to have exceeded a strip of 15 km beyond the frontier, independently of the question whether entry has taken place in the area of his municipality close to the frontier or at another place much further away?’

3. Put in that way, the problem of interpretation raised in the present case is to determine the precise territorial extent of the frontier zone on the territory opposite the Member State in which the importer resides.

The Court's answer will enable the national court to distinguish between imports which may enjoy exemption from Common Customs duties and those which enjoy only a limited exemption determined by the State of importation on the basis of Article 5 (1) of Directive 69/169. More generally, the burden of proof will be easier for persons resident close to the frontier who claim exemption from Common Customs duties: Article 5 (4) of Directive 69/169 states that the restrictions on exemption do not apply if the persons concerned ‘produce evidence to show that they are going beyond the frontier zone or that they are not returning from the frontier zone of the neighbouring Member State ... ’. (8)

The question raised in that respect by the main proceedings is as follows: is the frontier zone to be regarded pursuant to Article 5 (5) of Directive 69/169 as constituted by

A strip 15 km in depth parallel to the frontier (the view of the German customs authorities)

A circle having a radius 15 km with its centre at the customs crossing point (the view of the plaintiff in the main proceedings) ?

4. The answer must be sought in the wording, structure and objectives of Directive 69/169. In that respect the following observations are called for.

(a) In the present case it is necessary to consider the scope to be given to the provision excluding from exemption from Common Customs duties persons who cross to the frontier zone opposite that in which they reside.

As is shown by comparing the recitals of the four relevant directives in the present case, (9) the objective of the Community legislature is that measures should be taken ‘for the greater liberalization of the system of taxes on imports in travel between Member States’. To that end there has been progressive ‘alleviation’ in relation to exemption by successive directives. In taking this action the Community legislature has intended that ‘people in the Member States [should] become more aware of the reality of the Common Market’. (10)

Thus whereas Directive 69/169, before the subsequent amendments, provided that Member States

‘may set lower limits as to value and/or quantity for the exemption of goods when they are imported... in frontier-zone travel... ’ (11)

without giving further detail, Directive 72/230 imposed a number of limits on that power. On the one hand, Member States may no longer reduce the quantitative exemption beyond a certain limit (Article 5 (1) (a) and (b)) and, on the other, only goods acquired in a defined frontier zone may, except where proof to the contrary is provided by the importer, be excluded from duty-free entitlement.

The mere recital of those provisions leads me to conclude that such ‘restrictions’, as Article 5 (4) of Directive 69/169, as amended, expressly calls them, must be strictly interpreted: they are justified only if they are necessary to achieve the objective for which they were introduced.

(b) The exemptions, whatever they may be, are justified only if they relate to imports which ‘have no commercial character’. The importations affected are thus such which

‘(a) take place occasionally, and

(b) consist exclusively of goods for the personal or family use of the travellers, or of goods intended as presents; the nature or quantity of such goods must not be such as might indicate that they are being imported for commercial reasons’. (12)

It was in fact to be feared that frontier-zone residents, by reason of the considerable facilities for travel which they have and the attraction represented by the geographical proximity of a commercial centre of a frontier-zone municipality of another Member State, might abuse the duty-free entitlement by making frequent imports for commercial purposes.

As the Commission points out, there is no doubt that the power given to the Member States to reduce duty-free entitlement in the case of frontier-zone travel is intended inter alia to protect retail traders in frontier-zone municipalities who would have been the first to suffer from such a flow of imports.

However, the ever-present opportunity for frontier-zone residents to purchase in the neighbouring country justifies the exemption to duty-free entitlement only in the case of purchases made in the immediate proximity of the customs crossing point, itself situated in the like proximity to the municipality of residence: only in that case may it be presumed that the importation is not only likely to be of a commercial nature but is also likely to deflect trade away from the frontier municipality situated in the other Member State. On the other hand, there can be no such presumption when the customs crossing point is further than 15 km from the place of residence and/or place of purchase.

In other words, only importations carried out in a frontier-zone municipality situated less than 15 km from the customs crossing point used by a person residing less than 15 km from the same customs point should, in my opinion, be subject to the reduced duty-free entitlement. That interpretation is, furthermore, in line with the practice of the Member States which either do not apply the reduced exemptions in the case of intra-Community frontier-zone travel or, when they do apply them, adopt the criterion I have proposed.

In conclusion I propose that the Court should rule that:

The expression ‘frontier zone’ as defined in the first paragraph of Article 5 (5) of Directive 69/169, as amended by Directive 72/230, is to be interpreted as meaning an area constituted by a circle having a radius of 15 km and its centre at the customs crossing point.

(1) Translated from the French.

(2) Regulation of 3 December 1974 (Bundesgesetzblatt I 1974, p. 3377) in the version contained in the Regulation of 12 December 1979 (Bundesgesetzblatt I 1979, p. 2150).

(3) Article 1 (1).

(4) Official Journal, English Special Edition 1969 (I), p. 232.

(5) Directive 69/169 as amended by Directive 78/1032 of 19 December 1978 (Official Journal L 366, p. 28).

(6) Articles 5 (1) and (5) of Directive 69/169 as amended by Directive 72/230 of 12 June 1972 (Official Journal, English Special Edition 1972 (II), p. 565.

(7) See Recitals (2) and (3) of Directive 69/169, Recital (2) of Directive 72/230 and Recital (1) of Directive 78/1032.

(8) Directive 78/1032, first recital.

(9) Article 4 (1) of Directive 69/169 before amendment.

(10) Article 3 (2) of Directive 69/169 and Recital (3).