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On 7 April 2022, the ECJ issued its decision in the case C‑489/20 (UB vs Kauno teritorinė muitinė). UB arranged the unlawful introduction of cigarettes from Belarus to Lithuania. In September 2016, 6000 packages of cigarettes were thrown across the State border to be picked by vehicle on the other side. Lithuanian border officials managed to detain the vehicle carrying the cigarettes that same day.

In addition to the penalty order imposed on UB and his accomplices, it was also decided to confiscate and destroy the goods concerned. The confiscation of the excise goods entailed an extinguishment of the customs debt. In this context, the Supreme Administrative Court of Lithuania decided to hold the proceedings and to refer the following two questions to the ECJ for a preliminary ruling.

  • Is the EU customs code to be interpreted as meaning that a customs debt is extinguished where smuggled goods were seized and subsequently confiscated after they had already been unlawfully introduced (released for consumption) into the customs territory of the EU?
  • Does the extinguishment of the customs debt mean that the correlating excise duty and import VAT debt are also extinguished?

In response to these questions, the ECJ ruled that the customs debt concerned was extinguished based on EU customs law. For the correlating excise duty and import VAT debt the ECJ ruled however that, under the circumstances of this case, these were not extinguished based on the relevant EU directives.

The legal precedent created with this judgment may have implications in circumstances other the smuggling of goods. Think of businesses dealing with the (unintentional) unlawful introduction of goods, for instance when their products are stolen whilst stored or transported under customs supervision. If those end up in the hands of authorities, such operators may pursue a refund or remission of customs duties. This judgments clarifies that they may be successful in such pursuit. For the correlating excise duty and import VAT debt, this would be more difficult considering the outcome of this judgment.


Yassine El Bojaddaini is an associate within the EMEA Customs Practice. He has ample experience on advising and representing multinationals in customs and tax related matters including restructurings, litigation and supply chain optimization.


Jennifer Revis is a partner in the EU Competition and Trade Practice Group of Baker McKenzie's London office. She is acknowledged for her timely advice and responsiveness by the Legal 500. Jennifer has been on secondment to the UK customs authorities (Her Majesty's Revenue and Customs) in their tax and excise litigation department and to the Firm's European Law Centre in Brussels. Jennifer is frequently invited to speak at external conferences and regularly contributes articles to tax journals on customs matters such as De Voils Indirect Tax Journal.

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