The Hamburg Fiscal Court (FG, Finanzgericht) addressed, in a judgment of 18 July 2025 (case no. 4 K 84/22), the removal of goods from temporary storage and the resulting consequences under customs and VAT law.
I. The Facts
A container with 750 cartons of cigarettes was shipped from Vietnam via China to Hamburg at the end of 2015. Behind the transport was a group of offenders (including “TC”), who intended to smuggle the cigarettes into the EU via the port of Hamburg. While the original freight description correctly stated “filter cigarettes,” the freight documents were subsequently altered several times and were ultimately changed, in the original, to “sunglasses.” The offenders were unaware that an electronic entry summary declaration bearing the correct description of the goods (“filter cigarettes”) had already been submitted to the customs authorities. On the basis of an OLAF risk notification, the Customs Investigation Bureau (Zollfahndungsamt) opened an investigation; the container was placed under covert surveillance, fitted with a GPS tracker, and initially protected against collection by means of a hold flag.
The claimant (the freight forwarding/customs clearance company “F”) had a business relationship with TC’s father. TC had previously carried out transports involving the claimant. In January 2016, TC first attempted, through the claimant, to open an external transit procedure (T1) to Poland. However, collection failed because of the hold flag, and the order was cancelled. Subsequently, the offenders planned to bring the goods into line with the false shipping documents, that is, to swap the cigarettes for sunglasses before the container was scanned at the container inspection facility. TC was again to act as the collecting party for the order. To that end, cartons of sunglasses were transported from Poland to Hamburg.
A short time later, TC again engaged the claimant (in the name of the purported consignee “E”) to open a T1 transit procedure to Poland addressed to E, to arrange an appointment for scanning the container, and to apply for a change of custodian to the claimant while the place of storage (terminal) remained unchanged. The claimant applied for the change of custodian by form/email and had a transit declaration prepared, in each case based on the (original but factually incorrect) documents presented (“sunglasses”). It did not cross-check this against the data in the entry summary declaration (ENS), which recorded “filter cigarettes,” among other reasons because it lacked access to ATLAS.
TC then collected the container from the terminal despite the impending scanning appointment and took it to external locations in order to swap the cigarettes for sunglasses. The customs authorities did not notice the collection until roughly six hours later. The GPS tracker also failed to provide usable data (a technical fault). After contacting the claimant, TC was arrested and the unopened container, containing 10.5 million cigarettes, was seized. The claimant had no knowledge of TC’s plan or actions. TC was convicted of tax evasion by the Hamburg Regional Court (Landgericht).
The Main Customs Office (Hauptzollamt) assessed customs duty and import VAT against the claimant (later also tobacco tax, though this was severed from the proceedings). The import duty assessment notice was based on the removal of the goods from temporary storage. The claimant was said to have been involved, at least negligently, in the removal and was pursued as a joint and several debtor.
The claimant lodged an objection against the import duty assessment notice. In the objection proceedings, it argued, among other things, that it had doubts as to whether the import duties had arisen at all, since the cigarettes had only briefly been outside the customs authorities’ control, that it had not breached its obligations arising from the temporary storage, and that it had not been involved in the removal. It had been deceived by TC. It further argued that the assessment period had already expired.
The Main Customs Office rejected the objection as unfounded, and E brought an action before the Fiscal Court.
II. The Decision
The Fiscal Court upheld the action and set aside the assessment of customs duty and import VAT. While a customs debt and import VAT had indeed arisen, the claimant was not the debtor of the customs duty or the import VAT.
The Fiscal Court first found that a customs debt had arisen (Article 203(1) and (2) of the Community Customs Code, CCC). “Removal” was to be understood as any act or omission that prevents the customs authority, even temporarily, from having access to the goods and carrying out checks. Goods in temporary storage may only be stored at approved locations, so that an unauthorised change of location regularly gives rise to a customs debt.
TC removed the container from the terminal (the approved place of storage) and took it several kilometres away to external storage locations. The whereabouts of the container were unknown to the customs authorities for over six hours. The Fiscal Court considered this sufficient to establish a removal. The Fiscal Court was satisfied that the GPS tracker had in fact failed, since otherwise the authorities would not have disclosed their investigation to the claimant. Even if the authorities could have proceeded differently from a tactical point of view, they were not obliged to prevent the incurrence of import duties by immediately seizing the goods. According to the Fiscal Court, a shortfall in surveillance (e.g., a technical fault) does not eliminate the incurrence of the customs debt.
However, an objective act of involvement was not sufficient to hold E liable as a person involved. Such a person must know, or “reasonably ought to have known,” that the goods were being removed from customs supervision. The Fiscal Court denied that the subjective requirements were met, since the claimant had been deceived by the offenders and had no knowledge of the events. The Fiscal Court also found no negligent lack of knowledge on E’s part. The applicable standard is the conduct of a reasonable and diligent economic operator, which requires an overall assessment of the circumstances. In the specific case, the Fiscal Court did not consider the “warning signs” cited by customs to be sufficient. Although the claimant was experienced in customs matters, the irregularities cited (the earlier cancellation, storage costs, TC’s nervousness, doubts about the invoicing, and the lack of a longer-standing relationship with E) did not sufficiently indicate a planned removal or cigarette smuggling. From the perspective of a diligent economic operator, the paperwork was, on the whole, also consistent. There were no discernible contradictions within the documents submitted. There was no cause to cross-check the goods description “sunglasses” against the ENS, and E had no access to the customs IT systems at that time. The Fiscal Court regarded it as an unusual exception that the ENS, exceptionally, correctly stated “cigarettes” despite the preparations for smuggling.
In its assessment, the Fiscal Court also drew on the content of the criminal case files. The prosecuting authorities had not pursued the claimant. Several documents and decisions expressly confirmed its good faith. Since import VAT arises in accordance with the customs law provisions (Section 21(2) of the German VAT Act (UStG) in conjunction with Article 203 CCC), the Fiscal Court held, for the same reasons, that the claimant was also not to be treated as a debtor under Article 203(3) CCC, and that the import VAT assessment had to be set aside.
III. Comments / Significance for Practice
The Fiscal Court applied a fairly low threshold for a removal from temporary storage. Mere removal from the approved place of storage triggers the customs debt, even if the goods are later fully recovered.
For practice, this means that the actual place of storage approved by the authorities must be strictly observed during temporary storage. Any unauthorised relocation can trigger consequences under duty law.
The Fiscal Court also emphasised in its decision that the customs authorities are not obliged to prevent the incurrence of import duties by intervening immediately if, for investigative reasons, they choose a different approach (e.g., covert surveillance/GPS tracking). Surveillance measures taken by the authorities, or their failure (e.g., a technical fault), therefore likewise do not eliminate the objective removal. In practice, this is often a point of contention, since a person acting in good faith who is later held liable for import duties naturally asks why the incurrence of the duties was not already prevented at a point in time when this was still possible, in particular where the matter had already come to the authorities’ attention to such an extent that concrete surveillance measures had been taken and the goods were still within reach. In smuggling cases in particular, the goods have often disappeared and can no longer be located.
In the end, however, the Fiscal Court resolved the case in the claimant’s favour on the subjective level. Even so, it must again be pointed out that a criminal-law accusation is always latent in the background, against which one must, in case of doubt, be prepared to defend oneself. In the present dispute, this was not an issue for the claimant. The Fiscal Court also drew, in its assessment, on the content of the criminal case files, since the prosecuting authorities had not pursued the claimant and several documents and decisions had even expressly confirmed its good faith. This is not always the case in practice. It is often precisely the findings obtained by the prosecuting authorities that form the basis for a corresponding accusation and, in essence, for bad faith, so matters can also turn out differently.
The decision once again illustrates the potential liability risk for freight forwarders/customs agents. The decisive factor here was the subjective element, since liability as a person involved under Article 203(3) CCC specifically turns on this element (“knew or ought to have known”). The judgment also makes clear, however, that not every “uneasy feeling” or formal imprecision is sufficient to establish liability, since what is always required is a sound overall assessment of whether a diligent economic operator could have recognised, foreseen, or prevented the violation.
By Heiko Panke
