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10 April 2017 / article

Refund of import duty for recalled cars repaired under guarantee

The Dutch Supreme Court asked preliminary questions to the European Court of Justice (ECJ, case C-661/15). The questions relate to cars, originating in Japan, purchased by X, and released for free circulation in the EU. Upon importation, import duty was due.

Customs: Refund of import duty for recalled cars repaired under guarantee

Owners of a specific type of cars were requested to make an appointment with a dealer for the free of charge replacement of the steering coupling. The recall was due to the possibility that the steering coupling bolts were not correctly tightened. The risk occurs that the steering coupling assembly would become detached from the steering column, which would make the vehicle impossible to steer. The manufacturer reimbursed the costs of replacement to X pursuant to a warranty obligation.

Two other types of cars showed rubber seal and door hinge defects respectively. The dealers concerned repaired those defects on the basis of the warranty which they give to the final purchasers. X reimbursed the costs of those repairs to the dealers. Once again, the manufacturing seller reimbursed those costs to X pursuant to its contractual obligation under the warranty. That reimbursement took place more than 12 months after the date of importation of the cars concerned into the EU’s free circulation.

The Supreme Court was asked

  • whether the refund provision also applies in a case where it is established that, at the time the cars were imported, there was a manufacturer-related risk of a component becoming defective during use and, in view of this, the seller, pursuant to a contractual warranty towards the buyer, grants the latter a price reduction in the form of a reimbursement of the costs incurred by the buyer by way of modifying the goods in order to exclude that risk; and
  • whether the provision for adjustment of the customs value referred to therein - namely the adjustment of the price actually paid or payable for the goods - must have been made within a period of twelve months following the date of acceptance of the import declaration for entry to free circulation, contrary to the provisions legal refund and customs valuation provisions.


The Advocate General who advices the ECJ proposes to answer the questions as follows:

  • the legal provisions concerned must be interpreted as meaning that it applies, inter alia, when the seller of a vehicle grants the purchaser, under a contractual warranty obligation provided for in the sale contract, a price reduction in the form of a reimbursement of the costs incurred by the purchaser in remedying a manufacture-related risk that that vehicle may become defective in use, such that it does not have the degree of safety which may reasonably be expected of it;
  • the legal provision on basis of which the price adjustment can be taken into account is limited to 12 months is invalid.

The ECJ will decide on the basis of the facts presented to it and the opinion of the Advocate General. In most cases decisions of the ECJ are in line with the opinion of the Advocates General.


In case the ECJ will decide as proposed by the Advocate General, the refund provisions apply also to cars of which it is not sure that these were defective upon importation and are replaced or repaired under a warranty obligation. Consequently, irrespective of any defects at the moment of importation, the repair costs can be deducted from the customs value. Refund of duty can be claimed for price adjustments (repair costs) that take place within 3 years after importation of the cars in the EU.

What to do: importers of cars from outside EU could safeguard their right to a refund of import duties by extending their pending duty refund claims or to file refund claims for cars that are repaired under a warranty obligation within three years after importation.

We will provide further information once a decision of the ECJ has been made available.

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