Case No: A3/2016/0872
Neutral Citation Number: [2018] EWCA Civ 2401 
IN THE COURT OF APPEAL
ON APPEAL FROM THE UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
Mr Justice Birss
[2015] UKUT 669 (TCC)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Tuesday 30th October 2018 

Before :

LORD JUSTICE LEWISON
LORD JUSTICE NEWEY
and
MR JUSTICE HENRY CARR

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Between :

	FMX FOOD MERCHANTS IMPORT EXPORT CO LTD 	Appellant	
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	THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS	Respondents	

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Mr David Cavender QC and Ms Valentina Sloane (instructed by RPC) for the Appellant
Mr Kieron Beal QC and Mr Simon Pritchard (instructed by HMRC Solicitor’s Office) for the Respondents

Hearing date: 11 October 2018

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Judgment
Mr Justice Henry Carr: 
Introduction
1.	This appeal concerns the imposition by the Respondents (“HMRC”) of customs duty on various importations of garlic into the United Kingdom made by the Appellant (“FMX”) between 2003 and January 2004.  The goods were falsely declared to be of Cambodian origin. The garlic was in fact of Chinese origin, and therefore subject to a quota payment and to anti-dumping duty. HMRC issued a post-clearance demand on 1 April 2011 for customs duty on these importations in the sum of £503,577.63 (“the Demand”). 
2.	Prior to issue of the Demand, the First Tier Tribunal (“the FTT”) had dismissed an appeal by FMX against a post-clearance demand issued on 22 February 2007 for duty in respect of similar imports by FMX that occurred after January 2004 (“the Earlier Demand”); FMX Food Merchants Import Export Co Ltd v HMRC [2011] UKFTT 20 (TC). However, the FTT allowed an appeal from the Demand on the basis that it was communicated to FMX after the expiry of a three-year time limit specified by Article 221(3) of Council Regulation (EEC) No. 2913/92 of 12 October 1992, as amended by Regulation (EC) No 2700/2000 of the European Parliament and of the Council of 16 November 2000 (“the Customs Code”), and that Article 221(4) could not be relied upon to override that time limit; [2013] UKFTT 720 (TC) (“the FTT Decision”). The FTT Decision was overturned by the Upper Tribunal which decided that the communication of the Demand was not time barred; [2015] UKUT 0669 (TCC) (“the UT Decision”).
The facts
3.	There is no challenge to the following facts, as found by the FTT: 
(i)	false declarations were made to the Cambodian authorities, on the basis of which Form A Certificates recording Cambodian origin were issued and presented to HMRC; 
(ii)	the individuals who made those declarations were well aware that the false certificates would be presented to HMRC for the purposes of the UK import declaration; 
(iii)	FMX caused the false certificates to be presented to HMRC to support its claims that the garlic should benefit from the relevant exemptions from customs duty as being of Cambodian origin; 
(iv)	in presenting the false certificates to HMRC, FMX committed an act that was liable to give rise to criminal court proceedings under section 167(3) of the Customs and Excise Management Act 1979 (“the CEMA”), which is a strict liability offence. 
4.	On behalf of FMX, Mr David Cavender QC relied upon [20] of the FTT Decision, where the Tribunal recorded that:
“No assertion was made by HMRC that the Appellant [FMX] was a knowing participant in the fraud, so we do not consider that point further.”
5.	On behalf of HMRC, Mr Kieron Beal QC relied upon various facts found by the FTT in its decision concerning the Earlier Demand. The Tribunal considered whether FMX had acted in good faith within the meaning of Article 220(2)(b). In order for FMX to be treated as having acted in good faith, the Tribunal held that it must have “acted without deception and exercised appropriate diligence or ‘due care’ in its import arrangements” [51]. The Tribunal was not satisfied that FMX had acted with good faith in this sense. It found that FMX, and its director, Mr Pignatelli, were aware that Chinese garlic was being smuggled into the European Union via third countries, where false certificates of origin were issued. FMX was therefore aware that there was a risk of false certificates being supplied but had made no contractual arrangements with its supplier to ensure that the risk was managed.
6.	I do not consider that issues concerning FMX’s knowledge and conduct are relevant to the arguments presented on this appeal. FMX’s case is that the time period specified in Article 221(3) has not been extended and therefore the Demand is time-barred. If this is right, then even if FMX had full knowledge of the fraud, and had perpetrated the fraud itself, that would make no difference. HMRC’s case is that Article 221(3) has been disapplied by Article 221(4), and that there is no fixed time period for communication to the debtor (other than that the period should be a reasonable one). If this is right, since the relevant offence is one of strict liability, it would be unnecessary to prove that FMX was a knowing participant in the fraud. 
7.	FMX submitted that HMRC could have communicated the Demand earlier, and thereby have been within the three-year period specified in Article 221(3). HMRC knew of the fraud on 1 February 2007, which came to light following a mission of the European Anti-Fraud Office (“OLAF”), which confirmed that the certificates were false.  HMRC issued the Earlier Demand on 22 February 2007. They then waited until they had succeeded in the FTT before issuing the Demand on 30 March 2011. This was just under seven years after the importation complained of, and just under four years after HMRC knew of the fraud.  On the facts of this case, this would have made no difference. The three-year limitation period, if FMX is correct in its submissions, would still have applied to the importation of fraudulently declared garlic for the period from May 2003 to the end of 2004. 
Relevant provisions of the Customs Code
8.	The Customs Code was in force at the relevant times but has now been replaced by Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (“the UCC”). The Customs Code provided for an EU wide system of rules governing (amongst other things) goods imported from third countries.
9.	Article 201 of the Customs Code provides that a customs debt on importation shall be incurred through the release for free circulation of goods liable to import duties. Import duties are defined in Article 4(10) as being “customs duties and charges having an effect equivalent to customs duties payable on the importation of goods.” They are incurred at the time of acceptance of the customs declaration.
10.	Article 201(3) provides that:
“The debtor shall be the declarant. In the event of indirect representation, the person on whose behalf the customs declaration is made shall also be a debtor.”
11.	Articles 217 – 221 impose obligations on Member States to ensure that customs debts are accounted for and paid within certain time periods and that the amount of the customs debt is communicated to the debtor. Article 220 provides (with certain exceptions which are not relevant) that where a customs debt has been entered into the accounts at a lower level than the amount legally owed, the amount of the duty which remains to be recovered must also be entered in the accounts.
12.	Article 221(3) specifies a three-year time for communication to a debtor of a customs debt, from the date when it was incurred:
“Communication to the debtor shall not take place after the expiry of a period of 3 years from the date on which the customs debt was incurred. This period shall be suspended from the time an appeal within the meaning of Article 243 is lodged, for the duration of the appeal proceedings.”
13.	Article 221(4) provides that:
“Where the customs debt is the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, the amount may, under the conditions set out in the provisions in force, be communicated to the debtor after the expiry of the three-year period referred to in paragraph 3.”
14.	Article 4(23) defines “provisions in force” as “Community or national provisions”.
The Customs and Excise Management Act 1979
15.	Section 167 of the CEMA (insofar as relevant) provides:
“Untrue declarations, etc
(1) If any person either knowingly or recklessly – 
(a) makes or signs, or causes to be made or signed, or delivers or causes to be delivered to the Commissioners or an officer, any declaration, notice, certificate or other document whatsoever; or
(b) makes any statement in answer to any question put to him by an officer which he is required by or under any enactment to answer,
being a document or statement produced or made for any purpose of any assigned matter, which is untrue in any material particular, he shall be guilty of an offence under this subsection and may be arrested …
…
(3) If any person – 
(a) makes or signs, or causes to be made or signed, or delivers or causes to be delivered to the Commissioners or an officer, any declaration, notice, certificate or other document whatsoever; or
(b) makes any statement in answer to any question put to him by an officer which he is required by or under any enactment to answer,
being a document or statement produced or made for any purpose of any assigned matter, which is untrue in any material particular, then, without prejudice to subsection (4) below, he shall be liable on summary conviction to a penalty of level 4 on the standard scale.
(4) Where by reason of any such document or statement as is mentioned in subsection (1) or (3) above the full amount of any duty payable is not paid or any overpayment is made in respect of any drawback, allowance, rebate or repayment of duty, the amount of the duty unpaid or of the overpayment shall be recoverable as a debt due to the Crown or may be summarily recovered as a civil debt.”
The Limitation Act 1980
16.	Section 9(1) of the Limitation Act 1980 (“the LA”) provides that:
“An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued.” 
17.	However, section 32 of the LA provides for postponement of the limitation period in the case of, amongst other things, fraud. Section 32(1)(a) states that where an action is based upon the fraud of the defendant, “the period of limitation shall not begin to run until the plaintiff has discovered the fraud … or could with reasonable diligence have discovered it”. 
18.	Section 37 of the LA concerns the application of the Act to the Crown.  In particular:
“Application to the Crown and the Duke of Cornwall
(1) Except as otherwise expressly provided in this Act, and without prejudice to section 39, this Act shall apply to proceedings by or against the Crown in like manner as it applies to proceedings between subjects.
(2) Notwithstanding subsection (1) above, this Act shall not apply to—
(a) any proceedings by the Crown for the recovery of any tax or duty or interest on any tax or duty; 
… .”
The essential reasoning of the FTT
19.	This is set out at [55] to [70] of the FTT Decision. The FTT held that:
i)	Article 221(4) of the Customs Code permits recovery after the three-year period specified in Article 221(3) has expired, but only “under the conditions set out in the provisions in force”.  
ii)	The Court of Justice of the European Union (“the Court of Justice”) held in Case C-62/06 Fazenda Pública v ZF Zefeser [2007] ECR I-11995 that there was no need for criminal proceedings to have actually been initiated at the point where the exception in Article 221(4) was invoked.
iii)	As there are no applicable Community provisions, the issue is whether there are United Kingdom “provisions” in which “conditions” are set out, under which communication of the debt outside the three-year time limit is permitted. 
iv)	The UK legislation contains no specific reference to an extended time limit for the purposes of Article 221(4) of the Customs Code, still less any “conditions” applicable to any such extended time limit. 
v)	In relation to causes of action generally, applicable time limits are laid down by the LA. However, section 37(2)(a) of that Act disapplies the Act in relation to claims for payment of (amongst other things) “duty”, which includes the duty the subject of this appeal. 
vi)	Article 221(4) requires the enactment of a specific provision of UK law setting out conditions for an extended time limit to apply. In the absence of such a statutory provision, there are no provisions in force in the UK which disapply the default three-year time limit set out in Article 221(3) of the Customs Code.
The essential reasoning of the UT
20.	 This is set out at [17] to [37] of the UT Decision. The UT held that:
i)	Article 221(4) is concerned with cases in which the customs debt is the result of a criminal act and the purpose of the Article is to disapply the three-year period set by Article 221(3) in those circumstances. One reason is that the criminality may not come to light until after the period has expired. The correct duty should still be paid in such a case.
ii)	Article 221(4) does not mean that specific provisions have to be enacted in national law in order to disapply the three-year period set by Article 221(3). The instrument which disapplies the three-year period is Article 221(4) itself.
iii)	All that Article 221(4) provides for is that the communication has to be under the conditions set out in the provisions in force. “Provisions in force” could set criteria governing the manner of the communication itself (e.g. that it must be made by registered post). 
iv)	The case law of the Court of Justice has established that Member States are not required to enact specific provisions to deal with such matters. They can rely on national rules of general application to ensure that the debtor receives adequate information; Case C-201/04 Belgische Staat v Molenbergnatie NV [2006] ECR I-02049 at [50] – [54]; Case C-264/08 Belgische Staat v Direct Parcel Distribution Belgium NV [2010] ECR I-00731 at [29].
v)	Article 221(4) is enabling in that it permits Member States to make provisions if they wish, and those provisions could include a finite limitation period. However, there is nothing in the language of the Article, nor its purpose, which leads to the conclusion that it requires Member States to lay down any particular kind of temporal limitation.
vi)	Article 221(4) has disapplied the three-year period in the factual circumstances of this case.
vii)	This does not mean that HMRC has an unlimited licence to pursue stale claims where the debt arises from a criminal act. The general common law relating to abuse of process, together with the equitable doctrine of laches and/or Article 47 of the Charter of Fundamental Rights or Article 6 of the ECHR would cure any substantive or procedural unfairness in a given case.
The issues raised by the Grounds of Appeal
21.	FMX contends that the UT erred in law in its interpretation of Article 221(4).  FMX alleges Article 221(4) does not in and of itself disapply the three-year time limit in Article 221(4). It contends that the Article “by its very wording looks outward, or cross-refers to other provision(s) in force, if any, before a Member State is empowered in law to go past 3 years”.
22.	This first ground of appeal was supplemented by amendment, whereby FMX alleged that the Tribunal’s interpretation is incompatible with the principle of legal certainty. In particular, FMX relies upon the judgments of the Court of Justice in Cases C-201/10 Ze Fu Fleischhandel GmbH v Hauptzollamt Hamburg-Jonas [2011] ECR I-03545 and C-427/14 Valsts ieņēmumu dienests v Veloserviss SIA [2015] ECLI:EU:C:2015:803 which were not cited to the FTT or to the UT. FMX contends that these authorities establish that:

“… the position of the importer may not be open to challenge indefinitely and any extension of the default three-year limit … must be fixed in advance, must be subject to a reasonable time limit and must be reasonably foreseeable for a person.”
23.	By its second ground of appeal FMX contends that the UT erred in its consideration of relieving the unfairness of stale claims. FMX contends that the UT misconstrued possible defences to a claim as a basis in law for bringing the claim itself. Those defences could not of themselves provide a lawful basis for HMRC to apply an indefinite extended time limit.
The issues raised by the Respondents’ Notice
24.	HMRC contend that the UT was right in its decision, for the reasons that it gave. However, by a Respondents’ Notice, HMRC provide supplemental or alternative reasons for upholding the UT Decision. HMRC allege that:
i)	by section 37(2)(a) of the LA, Parliament has made an express decision to set no limitation period for recovery of customs duties. National law has accordingly made a conscious decision not to put in place any express provision prescribing a customs debt through the effluxion of time. The FTT was therefore wrong to conclude that no provision at all had been made in respect of customs debts;
ii)	periods of limitation set out in the LA should apply by analogy (as contemplated in Ze Fu Fleischhandel (supra)). HMRC submitted that, if FMX’s interpretation of Article 221 was accepted, then section 37(2)(a) of the LA should be disapplied as it would be inconsistent with the obligation to collect duty imposed by the Customs Code. The result would be that the general six-year limitation period in civil claims would apply, subject to extensions in the case of fraud pursuant to section 32(1)(a). 
Interpretation of Article 221 and the principle of legal certainty
The principle of legal certainty
25.	The principle of legal certainty was considered by the Supreme Court in Test Claimants in the Franked Investment Income Group Litigation [2012] UKSC 19; [2012] 2 AC 337. Lord Walker of Gestingthorpe JSC explained at [93] to [95] that it is well established that EU law has no general objection to the provision of limitation periods in the legal systems of Member States. On the contrary, they are one manifestation of the principle of legal certainty. He stated that limitation periods must be reasonable but that the Court of Justice recognises that national systems vary a good deal. He gave examples which were in line with this approach, all of which specified periods of limitation which were fixed and known in advance:
“[In] Haahr Petroleum v Åbenrå Havn (Case C-90/94) [1997] ECR I-4085, a five-year period was accepted as reasonable for reimbursement of an unlawful goods duty. Emmott v Minister for Social Welfare (Case C-208/90) [1993] ICR 8 was distinguished … because in that case the relevant directive had not been properly transposed, and until its proper transposition time was not to start to run. In Edilizia Industriale Siderurgica Srl (Edis) v Ministero delle Finanze (Case C-231/96) [1998] ECR I-4951 a three-year period was accepted for recovery of company registration charges levied in breach of article 10 of Council Directive 69/335/EEC despite the fact that the normal limitation period for restitution, under article 2946 of the Italian Civil Code, was ten years.”
26.	Lord Sumption JSC referred at [146] to the overriding requirement that national legal systems should provide a minimum standard of protection for EU law rights. In addition to the principles of effectiveness and equivalence, he said:
“There is a third principle which features less prominently in the case law on this subject but is of considerable importance because it informs the approach of the Court of Justice to the first two. This is the principle of legal certainty, which lies at the heart of the EU legal order and entails (among other things) that those subject to EU law should be able clearly to ascertain their rights and obligations. One aspect of that principle is that within limits EU law will protect within its own domain legitimate expectations adversely affected by a change in the law.”
27.	At [149] Lord Sumption emphasised that time limits in relation to actions of a fiscal nature were an application of the principle of legal certainty, which generally requires rules for establishing clear limits beyond which tax accounts may not be reopened:
“The implications of these principles for the operation of rules of limitation in national systems of law is the subject of a considerable body of case law in the Court of Justice. Not only is limitation a feature of every national legal system in the EU, but the recognition of national rules of limitation as both necessary and desirable is treated as part of the principle of legal certainty in EU law. In Rewe I [1976] ECR 1989, one of the first cases to come before the Court of Justice about the application of limitation periods to claims to enforce directly effective rights in the area of tax, the court observed, at para 5, that 
‘the laying down of such time limits with regard to actions of a fiscal nature is an application of the fundamental principle of legal certainty protecting both the taxpayer and the administration concerned’.
This is so, notwithstanding that “the effect of that rule is to prevent, in whole or in part, the repayment of those charges”: Haahr Petroleum, para 45. Subject to the overriding principles of effectiveness and equivalence, EU law recognises the public interest in orderly national budgeting and equity between generations of taxpayers, which will generally require rules for establishing clear limits beyond which tax accounts may not be reopened.”
Veloserviss
28.	Veloserviss concerned the interpretation of Articles 78(3) and 221 of the Customs Code in force at the relevant time. Article 78(3) provided that:
“Where revision of the declaration or post-clearance examination indicates that the provisions governing the customs procedure concerned have been applied on the basis of incorrect or incomplete information, the customs authorities shall, in accordance with any provisions laid down, take the measures necessary to regularise the situation, taking account of the new information available to them.”
29.	Articles 221(1), (3) and (4) provided that: 
“(1) As soon as it has been entered in the accounts, the amount of duty shall be communicated to the debtor in accordance with appropriate procedures.
...
(3) Communication to the debtor shall not take place after the expiry of a period of three years from the date on which the customs debt was incurred. ...
(4) Where the customs debt is the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, the amount may, under the conditions set out in the provisions in force, be communicated to the debtor after the expiry of the three-year period referred to in paragraph 3.”
 
30.	The reference was made in the following context. In May 2007, Veloserviss imported into the European Union bicycles allegedly originating in Cambodia. In accordance with the certificate of origin issued by the Cambodian government, Veloserviss paid neither customs duties nor VAT. Having undertaken an initial examination and found that there was no irregularity, in 2010 the Latvian tax authority received information from OLAF that the certificate of origin did not comply with the requirements of EU law. A second post-examination of the document completed by Veloserviss was undertaken and the tax authority found that customs duties exemptions should not have been granted in respect of those goods. By a decision of 23 July 2010, the Latvian tax authority ordered Veloserviss to pay the relevant customs duties and VAT. Veloserviss brought an action for annulment of that decision. 
31.	At [18] to [28] of its judgment, the Court of Justice held that Article 78(3) of the Customs Code must be interpreted as meaning that, within the framework of the obligations that it imposes on the customs authorities, as a rule it allows those authorities to revise or conduct a post-clearance examination of a customs declaration and to regularise the situation by fixing a new customs debt. However, the Court of Justice also held that when exercising the powers conferred by EU legislation, Member States must comply with the principles of EU law, including in particular the principle of legal certainty; [30] - [32]: 
“30. It must be recalled that the principles of legal certainty and protection of legitimate expectations form part of the EU legal order and, as such, must be observed not only by the EU institutions but also by Member States in the exercise of the powers conferred on them by EU rules (see, to that effect, inter alia, judgments in Netto Supermarkt, C‑271/06, EU:C:2008:105, paragraph 18, and Plantanol, C‑201/08, EU:C:2009:539, paragraph 43). 
31. First of all, according to the Court’s settled case-law, the principle of the protection of legal certainty is aimed at ensuring foreseeability of situations and legal relations and requires, inter alia, that the tax position of the taxable person, having regard to his rights and obligations vis-à-vis the tax or customs authorities, not to be open to challenge indefinitely (see, to that effect, inter alia, judgments in Alstom Power Hydro, C‑472/08, EU:C:2010:32, paragraph 16, and Elsacom, C‑294/11, EU:C:2012:382, paragraph 29). 
32. The Court has held consistently that laying down reasonable time-limits for bringing proceedings, under either national law or EU law, serves the interests of legal certainty which protects both the individual and the authorities concerned; such time-limits are not liable to make it in practice impossible or excessively difficult to exercise the rights conferred by EU law (see, to that effect, judgments in Barth, C‑542/08, EU:C:2010:193, paragraph 28, and CIVAD, C‑533/10, EU:C:2012:347, paragraph 23).”
32.	The Court of Justice then considered the relationship between Articles 78(3) and 221(3) of the Customs Code then in force, in the light of the general principle of legal certainty. It said at [33] to [35]:
“33. Accordingly, as Article 78 of the Customs Code does not lay down any time-limit for post-clearance examination of customs declarations, under the general principle of legal certainty the Member States are free to make that procedure subject to a reasonable time-limit.
34. However, although Article 78 of the Customs Code does not institute any specific time-limit in this respect, the customs authorities, in accordance with Article 221(3) thereof, may communicate a new customs debt within a period of three years from the date on which that debt was incurred (see judgment in Greencarrier Freight Services Latvia, C‑571/12, EU:C:2014:102, paragraph 40). 
35. Once that period has expired, the debt is time-barred and, consequently, extinguished within the meaning of Article 233 of the Customs Code (see judgment in Direct Parcel Distribution Belgium, C‑264/08, EU:C:2010:43, paragraph 43).”
33.	The Court concluded that customs authorities could subsequently revise or conduct post-clearance examinations as provided for in Article 78(3), but that the principle of legal certainty meant that this had to be within the three-year period from the time when the initial customs debt was incurred.  The Court ruled as follows in respect of the questions referred to it:
“Article 78(3) of [the Customs Code] must be interpreted as precluding national rules, such as those at issue in the main proceedings, under which a restriction is placed on the customs authorities’ powers to conduct re-examinations or post-clearance examinations and to regularise the situation by fixing a new customs debt, provided that that restriction refers to a three-year period from the time the initial customs debt was incurred, which it is for the national court to verify.”
Ze Fu Fleischhandel
34.	In Ze Fu Fleischhandel, the Court of Justice addressed in detail the obligations, imposed by the principles of legal certainty and proportionality, in relation to the application of limitation periods for demands for duty by the customs authorities of Member States. 
35.	The case concerned the limitation period applicable to demands by Member States for repayment of export refunds, in protection of the Community’s financial interests. Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the Protection of the European Communities’ Financial Interests provided for a default limitation period of four years but permitted Member States to retain the possibility of applying a longer period. Articles 3(1) and (3) provided that:
“Article 3:
1. The limitation period for proceedings shall be four years as from the time when the irregularity referred to in Article 1(1) was committed. However, the sectoral rules may make provision for a shorter period which may not be less than 3 years.
In the case of continuous or repeated irregularities, the limitation period shall run from the day on which the irregularity ceases. …
The limitation period shall be interrupted by any act of the competent authority, notified to the person in question, relating to investigation or legal proceedings concerning the irregularity. The limitation period shall start again following each interrupting act.
…
3. Member States shall retain the possibility of applying a period which is longer than that provided for in [paragraph] 1 …”
36.	At the relevant time, there was no specific provision in Germany on limitation periods applicable to administrative proceedings concerning wrongly granted advantages. However, both the German administrative authorities and the German courts applied “by analogy” a general 30-year limitation period laid down at the time in the German Civil Code. 
37.	The Court of Justice reaffirmed that the principle of legal certainty requires that the position of an “operator”, having regard to his rights and obligations vis-à-vis the national authorities, must not be open to challenge indefinitely. In order to fulfil its function of ensuring legal certainty, that period “must be fixed in advance”. It followed that any application “by analogy” must be sufficiently foreseeable.
“32. It is to be observed that, in the context of proceedings in respect of an irregularity that is detrimental to the European Union’s financial interests and leads to an administrative measure such as an obligation for the operator to repay refunds which have been wrongly received, the principle of legal certainty requires in particular that the position of that operator, having regard to his rights and obligations vis-à-vis the national authority, not be open to challenge indefinitely (see, by analogy, Case C-472/08 Alstom Power Hydro [2010] ECR-I-00623, paragraph 16); consequently, a limitation period must be applicable to proceedings in respect of such an irregularity and, in order to fulfil its function of ensuring legal certainty, that period must be fixed in advance (see Case 41/69 ACF Chemiefarma v Commission of the European Communities [1970] ECR 00661, paragraph 19, and Case C-62/00 Marks & Spencer [2002] ECR I-06325, paragraph 39). Therefore, any application ‘by analogy’ of a limitation period must be sufficiently foreseeable for a person (see, by analogy, Case C-445/06 Danske Slagterier v Bundesrepublik Deutschland [2009] ECR I-02119, paragraph 34).”
38.	The Court of Justice considered that, where the Member State’s legislature has not adopted a specific provision applicable to the field in question, the principle of legal certainty does not preclude, in principle, the application of a general limitation period laid down in civil law, provided that this results from a judicially determined practice which was foreseeable:
“33. It is admittedly easier for such an operator to determine the limitation period applicable to proceedings in respect of an irregularity which he has committed when that period and its application to the field within which the irregularity falls are established by the national legislature in a provision specifically applicable to the field concerned. Nevertheless, where, as seems to be the position in the cases in the main proceedings, the national legislature did not adopt a specific provision applicable to a field such as that of repayment of export refunds that have been wrongly received to the detriment of the European Union budget, the principle of legal certainty does not preclude, in principle, the administrative and judicial authorities from continuing, in accordance with their past judicially determined practice known to such an operator, to apply ‘by analogy’ a limitation period of a general nature that is laid down in a provision of civil law and exceeds the four-year period provided for in the first subparagraph of Article 3(1) of Regulation No 2988/95.
34. However, such application complies with the principle of legal certainty only if it results from a judicially determined practice that was sufficiently foreseeable.”
39.	Further, the Court held that the 30-year time limit was incompatible with the principle of proportionality. It said at [43] that:
“43.  In this regard, in light of the objective of protecting the European Union’s financial interests, an objective for which the EU legislature considered that a limitation period of four, or indeed even three, years was already in itself sufficient to enable the national authorities to bring proceedings in respect of an irregularity detrimental to those financial interests and capable of leading to the adoption of a measure such as recovery of a wrongly received advantage, it is apparent that to grant those authorities a period of 30 years goes beyond what is necessary for a diligent public service.”
40.	The Court of Justice then considered whether this incompatibility could be remedied by the national court. It held that the principle of legal certainty precluded a national court from remedying the breach of EU law by interpreting the 30-year limitation rule as applying for 10 years. In the absence of legally applicable national legislation laying down a longer limitation period that was directly applicable, the four-year limitation rule provided for in Article 3(1) of Regulation No 2988/95 applied:
“52. In such a situation, if a national court were to be allowed, in the context of Regulation 2988/95, to reduce a given limitation period applied hitherto down to a level capable of complying with the principle of proportionality when a limitation rule derived from EU law and directly applicable in its legal system is in any event available to it, this would run specifically counter to the principles that, first, in order to fulfil its function of ensuring legal certainty, a limitation period must be fixed in advance (see ACF Chemiefarma v Commission, paragraph 19, and Marks & Spencer, paragraph 39) and, secondly, any application “by analogy” of a limitation period must be sufficiently foreseeable for a person (see, by analogy, Danske Slagterier, paragraph 34).
53. Nevertheless, in such a situation … it is always open to the national legislature, within the framework of the possibility provided for in art.3(3) of Regulation 2988/95, to adopt a longer limitation rule. 
54. In light of the foregoing … in circumstances such as those at issue in the cases in the main proceedings, the principle of legal certainty precludes a “longer” limitation period within the meaning of art.3(3) of Regulation 2988/95 from resulting from a limitation period under the general law that is reduced by case law so that, when applied, it complies with the principle of proportionality, since, in any event, the four-year limitation period provided for in the first subparagraph of art.3(1) of Regulation 2988/95 can be applied in such circumstances.”
Article 221 and the principle of legal certainty - assessment
41.	Mr Cavender did not dispute that the FTT made an error of law in concluding at [69] that the failure to enact appropriate specific provisions, setting out the conditions for an extended time limit, meant that there were no provisions in force in the UK which disapplied the default three-year time limit. This proposition requires further qualification, as was made clear by the Court of Justice in Ze Fu Fleischhandel.  Since that case was not cited to the FTT, that error is entirely understandable.
42.	Ze Fu Fleischhandel establishes that, in addition to the enactment of a statutory provision extending the time limit in Article 221(3), the administrative and judicial authorities may continue, in accordance with their past judicially determined practice known to the relevant operator, to apply “by analogy” a limitation period of a general nature that is laid down in a provision of civil law. However, such application complies with the principle of legal certainty only if it results from a judicially determined practice that was sufficiently foreseeable. In the present case (and subject to issues raised by the Respondents’ Notice) there was no such judicially determined practice in the United Kingdom. Therefore, in my judgment, the error of law made by the FTT made no difference.
43.	The key issue is whether the UT was correct in its conclusion that it was permissible for a Member State to make no provision at all for a finite limitation period, as a result of the operation of Article 221(4). That, Mr Cavender submitted, was contradicted by the authorities referred to above. Mr Beal’s arguments gave rise to a number of sub-issues, which are discussed below.
Disapplication of the three-year period by Article 221(4)
44.	HMRC’s starting point was that the UT was correct in its interpretation of Article 221, for the reasons that it gave. In particular, the UT said at [29] that “while Art 221 is permissive, there is nothing in the language and nothing to be derived from its purpose, which leads to the conclusion that the article requires Member States to lay down any particular kind of temporal limitation”. If that is right, then Article 221 allows for indefinite challenges to duty declarations made by importers, and does not require any limitation period to be fixed in advance, as a result of the operation of Article 221(4).
45.	Birss J said at [31] that:
“In my judgment the FTT erred in its construction of Art 221(4). The provision is enabling in that it permits Member States to make provisions if they wish and those provisions could involve a finite limitation period. But it does not require the Member State to make any provisions at all. It is not a Directive requiring Member States to legislate in a particular way. The ECJ has held that the article does not require Member States to enact specific provisions relating to the manner in which the communication is made. By parity of reasoning the very same words in the article cannot require Member States to enact a limitation period. Nothing in Art 221 says anything about what would happen if a Member State does not enact a finite limitation period. In my judgment it cannot be interpreted as meaning that if a Member State has no finite limitation period (or no express rule about limitation tied to the particular circumstances), or no formal legislation tied to this part of the Customs Code at all) it follows that a notice outside the three-year period is inevitably invalid. On the contrary, Art 221(4) has disapplied the three-year period in the factual circumstances in this case. HMRC’s notification complies with all applicable law and there is no law which makes it invalid. I will allow the appeal on the first ground.”
46.	I agree with the UT that Article 221(4) is enabling in that it permits Member States to make provisions, if they wish, to extend the three-year period specified by Article 221(3). As the UT stated, Article 221(4) does not require the Member State to make any provision at all. The question is, what is the consequence when a Member State does not make any such provision? The UT concluded that Article 221(4) disapplies the period specified in Article 221(3).  The result is that there is no finite time limit in the United Kingdom for communications of demands for customs duty in the circumstances referred to in Article 221(4), as the UT concluded.
47.	I respectfully disagree.  The disapplication of Article 221(4) is conditional upon the existence of “provisions in force” which set out “conditions”. The Court of Justice has made it clear in Veloserviss and Ze Fu Fleischhandel that the principle of legal certainty requires that the position of an “operator”, having regard to his rights and obligations vis-à-vis the national authorities, must not be open to challenge indefinitely. In order to fulfil its function of ensuring legal certainty, that period “must be fixed in advance”. Therefore, the Customs Code does not allow communications of demands for customs duty beyond the three-year period specified in Article 221(3), unless there is some other provision in force which sets  out the conditions which identify that fixed period in advance. 
Method of communication
48.	The UT noted at [29] that the Court of Justice had concluded in Molenbergnatie and Direct Parcel that Member States are not required to adopt specific procedural rules as to the manner in which communication of the amount of import or export duties is to be made to the debtor, where national procedural rules of general application can be applied to that communication. Mr Beal submitted that, in the light of these decisions, Article 221(4) does not expressly or impliedly require Member States to enact a finite period limiting time within which an effective communication of a customs debt can be made. He supported the reasoning of the UT at [36]:
“36. In particular, Article 221(4) does not require domestic legislation governing the communication of the debt. Article 221(4) states that the communication of the customs debt will be ‘under the conditions set out in the provisions in force’, but that does not stipulate that there must be provisions in force providing for a concrete limitation period. Instead, the reference to “conditions set out in the provisions in force” is a reference to national rules of general application regarding the method of communicating a customs debt. As the [Court of Justice] made clear in Case C-201/04 Molenbergnatie (supra) at [53], in the absence of any procedural rules specifically governing notification, it is for the national customs authorities to ensure through their administrative practices that the existence of the debt is properly brought to the debtor’s attention.”
49.	HMRC’s case was that if, as here, the criteria in relation to criminal conduct are met, then the time limit set by Article 221(3) is no longer applied. Instead, the debt may be communicated to the customs debtor in accordance with “the provisions in force”, defined in Article 4(23) of the Customs Code to include both EU and national law. The provisions in force permit HMRC to notify the customs debtor of the debt. If there is simply no time limit under domestic law barring the notification of debts when they arise from a criminal act, then nothing in the Customs Code stops the notification being made after the expiry of three years.
50.	HMRC supported the conclusion of the UT at [28] where it held that “provisions in force” could set criteria governing the manner of the communication itself (e.g. that it must be made by registered post). The provision in force was therefore either the Demand itself, or the letter communicating the Demand to FMX. 
51.	I agree with the UT that Member States are not required to adopt specific procedural rules relating to the means of communication of the amount of the customs debt. They are, however required by the principle of legal certainty to specify a finite period during which a customs debt may be recovered, if the three-year period in Article 221(3) is to be extended, which the United Kingdom has not done. That finite period may be set either by a statutory provision, or by an analogous provision of general law. However, in the present case (and subject the Respondents’ Notice), no such provision exists. 
52.	 In my view, HMRC’s submission, and the reasoning of the UT, confuses the mode of communication with the substance of communication. Neither the Demand nor the accompanying letter contains any indication of a fixed period within which a communication of the amount of the customs debt has to be made, and therefore, no conditions. On the contrary, the letter merely asserts that HMRC is entitled to rely upon Article 221(4). Both documents were sent on the basis that there may be no fixed limitation period, and that therefore the declarations of the importer may be open to indefinite challenge.
Communication within a reasonable period
53.	Mr Beal acknowledged that, as a matter of the application of general principles of EU law, in the absence of any express legislative choice as to the application or non-application of any time limit, considerations of legal certainty might well preclude the issue of post-clearance demands beyond a reasonable period of time after the Commissioners sufficiently ascertain the facts to raise them. Approaching the question from the opposite perspective, he contended that the general EU law principle of legal certainty will, in any event, preclude the issue of post-clearance demands beyond a reasonable period of time after HMRC are sufficiently aware of the facts. Provided that the debt is communicated within a reasonable period of time, that is sufficient to comply with legal certainty. 
54.	In support of this submission, Mr Beal relied upon, amongst other cases, the decisions of the General Court of the European Union (“the General Court”) in Case   T – 45/01 Sanders and Others v Commission [2007] ECR II-2665 and Case T433/10 P Allen v Commission [2011] ECLI:EU:T:2011:744. He submitted that the General Court recognised that there is a general obligation to act within a reasonable time in all cases where the principles of legal certainty or protection of legitimate expectations preclude community institutions and natural persons from acting without any time limits. 
55.	 In Allen, the issue concerned the period within which the Commission was required to offer to individuals posts as temporary staff members. At [26] the General Court said:
“[I]t must be held that the appellants’ argument that the absence of a time limit automatically means that it is possible to bring a claim for damages without any time-limit cannot succeed. It should be noted on that point that, contrary to what the appellants contend, there is an obligation to act within a reasonable time in all cases except those where the legislature has expressly excluded or expressly laid down a specific time-limit. The legal basis for setting a reasonable time-limit, in the absence of any statutory rule, is the principle of legal certainty, which precludes institutions and natural persons from acting without any time-limits, thereby threatening to undermine the stability of legal positions already acquired (see, to that effect, Case T-192/99 Dunnett and Others v EIB [2001] ECR II-813, paragraphs 51 to 53; Case T-281/01 Huygens v Commission [2004] ECR-SC I-A-203 and II-903, paragraphs 46 and 47; and [Case T-144/02 Eagle and Others v Commission [2004] ECR II-3381], paragraph 57). Thus, in the absence of any statutory rule, it is for the judicature to decide on the length of the reasonable period for submitting a claim for damages, in the light of the circumstances of the case (see, to that effect, Dunnett and Others v EIB, paragraph 54; Huygens v Commission, paragraph 49; Eagle, paragraph 57; and Sanders, paragraph 58)”.
56.	 In my judgment, the Allen decision, and other decisions to similar effect, does not concern that aspect of the principle of legal certainty engaged by this appeal. That aspect of the general principle requires that the position of an importer, having regard to his rights and obligations vis-à-vis the national customs authority, may not be open to challenge indefinitely; consequently, a limitation period must be applicable to proceedings in respect of such an irregularity; and, in order to fulfil its function of ensuring legal certainty, that period must be fixed in advance. This, in my view is clear from Veloserviss at [30] to [32] and Ze Fu Fleischhandel at [32].
57.	I should record that proportionality was not in issue on this appeal. However, it is not possible to ignore the reasoning of the Court of Justice in Ze Fu Fleischhandel, that the imposition of an alternative, reasonable limitation period by the courts is impermissible. HMRC’s submission, if correct, would permit exactly this consequence. 
58.	Mr Beal also relied upon a decision of the Court of Appeal in The Commissioners for Her Majesty’s Revenue and Customs v GMAC (UK) PLC [2016] EWCA Civ 1015. This was an appeal by HMRC from a decision of the UT, which raised issues concerning VAT bad debt relief to which the UT had held that GMAC was entitled. One ground of appeal by HMRC raised the issue of whether GMAC’s EU-based claim was no longer live because GMAC had not exercised its EU law right within a reasonable time.
59.	At [150], Floyd LJ said
“[I] agree with the decisions of the UT and this court in [The Commissioners for Her Majesty's Revenue and Customs v British Telecommunications PLC [2014] EWCA Civ 433] that there is no room in the context of the present case for the imposition of a time limit by reference to the EU reasonable time rule. Such time limits as applied to GMAC's claims to assert their EU law rights through the mechanism of the domestic machinery were, as explained in the decisions, disapplied because they set the time by reference to the invalid insolvency condition. The domestic legislation is therefore to be read as being silent as to any time limit, and as therefore not imposing any. There is nothing incompatible with EU law in not imposing any time limit: indeed time limits (or the absence of time limits) are, in my judgment, exactly the sort of conditions which are expressly left to the member state under the Directive. If a member state can impose a time limit of 30 years, as the [Court of Justice] expressly confirmed that it could in Ze Fu Fleischhandel, then I do not see why legislation which imposes no time limit at all falls to be moulded to comply with a reasonable time principle.” 
60.	This case concerned the entitlement of a taxpayer to reclaim tax from the relevant tax authority. It did not concern that aspect of the principle of legal certainty raised by this appeal. That principle establishes that the position of an importer, having regard to his rights and obligations vis-à-vis the national customs authorities, must not be open to challenge indefinitely. In order to fulfil its function of ensuring legal certainty, that period “must be fixed in advance”.
The Agra decision
61.	HMRC relied upon the judgment of the Court of Justice in Case C-75/09 Agra Srl v Agenzia Dogane [2010] ECR I-5595 at [33] to [35], in particular where the Court of Justice stated that “it is for each Member State to determine the rules governing the extinction, through the passage of time, of customs debts which it has not been possible to assess because of an act which could give rise to criminal court proceedings”.  HMRC acknowledged that the Italian limitation provisions which were in issue in that case imposed a time limit of five years running from the date when a criminal judgment was made final. However, it was argued that since Article 221 does not impose any requirement for criminal proceedings actually to be started and prosecuted, the purported limitation provision in Agra was actually capable of being unlimited in time. The UT accepted this argument at [30].
62.	 In my judgment, reference to this decision takes the matter no further. The Agra case establishes that delay in the commencement of the time limit, which had been fixed by national legislation for a period of five years, from the conclusion of any criminal proceedings, was permitted for the purposes of Article 221(4). Whether that remains the law is open to doubt: see Case C-59/14 Firma Ernst Kollmer Fleisch Import und -export v Hauptzollamt Hamburg-Jonas [2015] ECLI:EU:C:2015:396 at [45] of the Opinion of the Advocate General. It certainly would not apply under the UCC. 
63.	The case does not establish the proposition that the affairs of a taxable person can be open to challenge indefinitely, and without any fixed time limit, as concluded by the UT. This proposition has been rejected on several occasions, in the case law to which I have referred. In my judgment, the UT erred in law in its interpretation of Article 221 of the Customs Code, and in the light of Veloserviss and Ze Fu Fleischhandel, this is acte clair.
Rules against procedural unfairness
64.	At [32] to [34], the UT held that “the common law (and rules of equity) already equip the court to prevent procedural unfairness in proper cases and, for example, go as far as striking out a claim as abusive as a result of inordinate delay which would make a fair trial impossible”. In my view, this provides no answer to the absence of any finite limitation period. 
65.	In my view, whether there is procedural unfairness in any given case does not address the application of the principle of legal certainty in relation to limitation periods. 
66.	The rules against procedural unfairness are fact dependent. The period of time that might elapse before a claim were to be regarded as “stale” would be likely to vary from case to case. It is not foreseeable by the taxpayer and would not be fixed in advance. The principle of legal certainty means that a taxpayer’s affairs cannot be opened indefinitely and must be fixed in advance. The absence of any limitation period, in accordance with the UT Decision, would not comply with this principle.
The Respondents’ Notice
An express decision by Parliament
67.	HMRC submitted that by section 37(2)(a) of the LA, Parliament has expressly elected to exclude from the scope of the limitation statute “any proceedings by the Crown for the recovery of any tax or duty or interest on any tax or duty.” Mr Beal contended that national law has therefore made a conscious choice not to put in place any express provisions prescribing a customs debt through the effluxion of time. He submitted that the FTT was wrong to consider that no provision at all had been made in respect of the communication of customs debts. The proper analysis was that a choice had been made as to time limits. Parliament’s choice was made not to impose any. Accordingly, through the enactment of section 37(2)(a) of the LA, Parliament made the conscious choice not to apply the general provisions governing limitation of civil actions to the recovery by the Crown of duties owed to it. 
68.	I do not accept this submission. Assuming (which is disputed by FMX) that section 37(2)(a) of the LA constitutes an express and conscious choice by Parliament in relation to customs debts, that choice is not, in my view, open to the United Kingdom under EU law. That is because the principle of legal certainty requires that the tax position of an operator, having regard to his rights and obligations vis-à-vis the national authority, may not be opened to challenge indefinitely and must be fixed in advance. 
The Limitation Act should apply by analogy or otherwise
69.	HMRC submitted in the alternative that if Article 221(4) requires express domestic provisions placing a time limit on the communication of a debt to a debtor, then section 37(2)(a) of the LA should be given a purposive construction or disapplied (whether by reference to Marleasing or otherwise) so as not to preclude the application of the LA to proceedings by the Crown for the recovery of customs duty. In that event, the general six-year limitation period in civil claims (subject to an extension in cases of fraud) found in the LA could permissibly be applied by analogy without contravening Article 221(4). Mr Beal relied upon Ze Fu Fleischhandel (supra) at [33], where the Court of Justice recognised that the administrative and judicial authorities can apply “by analogy” a limitation period of a general nature. 
70.	I do not accept this submission. Since there is no obligation on a Member State to extend the time-period specified in Article 221(3) there can be no case for disapplying section 37 of the LA to comply with such obligation. The application of the three-year period is compatible with the obligations imposed upon Member States under the Customs Code. Its extension pursuant to Article 221(4) is an option and is not mandatory.
71.	There is also, in my view, a fundamental difficulty with the “analogy” advanced by HMRC. Ze Fu Fleischhandel made it clear that limitation periods can be applied “by analogy” only if the application results from a judicially determined practice that was sufficiently foreseeable. It was not foreseeable that the general six-year time period under the LA would apply to demands for customs duty. On the contrary, this was unforeseeable as its application is explicitly excluded by section 37(2)(a) of the LA. Further, there is no judicially determined practice of applying the general six-year time under the LA to demands for customs duty.
Conclusion
72.	In my judgment, FMX’s appeal should be allowed. 
73.	I have reached this conclusion with reluctance. Mr Beal submitted powerfully that the interpretation of Article 221 that I have reached would result in HMRC being unable to enforce customs duty assessments in respect of concealed frauds. The Customs Code is no longer in force. The solution, if this is nonetheless a continuing problem, is for the United Kingdom to take up the option contained in Article 221(4) and adopt an appropriate, fixed, extended limitation period.
74.	 I shall add two further observations. First, HMRC did not rely upon the doctrine of abuse of rights during the course of this appeal. A more detailed explanation of the scope of the doctrine is provided in a forthcoming article by Merrett L. “Abuse of Rights and Forum Shopping”. The author explains that the doctrine was applied in a fiscal context in case C-110/99 Emsland-Stärke GmbH v Hauptzollamt Hamburg-Jonas (2000) ECR I–11569. The Court of Justice stated at [51] to [53]:
“… it is clear from the case-law of the Court that the scope of Community regulations must in no case be extended to cover abuses on the part of a trade (Case 125/76 Cremer v BALM [1977] ECR 1593, paragraph 21). The Court has also held that the fact that importation and re-exportation operations were not realised as bona fide commercial transactions but only in order wrongfully to benefit from the grant of monetary compensatory amounts, may preclude the application of positive monetary compensatory amounts (Case C-8/92 General Milk Products GmbH v Hauptzollamt Hamburg-Jonas [1993] ECR I-00779, paragraph 21).
A finding of an abuse requires, first, a combination of objective circumstances in which, despite formal observance of the conditions laid down by the Community rules, the purpose of those rules has not been achieved.
It requires, second, a subjective element consisting in the intention to obtain an advantage from the community rules by creating artificially the conditions laid down for obtaining it. The existence of that subjective element can be established, inter alia, by evidence of collusion between the Community exporter receiving the refunds and the importer of the goods in the non-member country.”
75.	In case C-255/02 Halifax plc and others v Commissioners of Customs & Excise [2006] I-01609, the Court of Justice confirmed at [68] to [69] that community law “cannot be relied upon for abusive or fraudulent ends” and that “application of Community legislation cannot be extended to cover abusive practices by economic operators, that is to say transactions carried out not in the context of normal commercial operations, but solely for the purpose of wrongfully gaining advantages provided for by Community law.”  
76.	It is clear, however, that there is a high hurdle for establishing abuse of rights, and that it is not an abuse of rights for nationals of Member States to rely upon the content of the right in question; Case C-212/97 Centros Ltd v Erhvervs- og Selskabsstyrelsen   [1999] I-01459.
77.	This issue was raised during the course of argument with Mr Cavender, who submitted that the doctrine of abuse of rights could not apply where a national of a Member State sought to rely upon Article 221(3), where no extended period had been provided for by the relevant Member State pursuant to Article 221(4). That argument may merit further consideration under the Customs Code, if there is evidence that the two-pronged test of Emsland-Stärke is satisfied.
78.	Secondly, this judgment applies to the Customs Code in force at the material times. That is no longer in force. The UCC currently in force imposes an obligation on Member States to provide an extended period of limitation of five years and a maximum of 10 years from the date on which the customs debt was incurred in accordance with national law. Article 103 provides:
“Limitation of the customs debt
1. No customs debt shall be notified to the debtor after the expiry of a period of three years from the date on which the customs debt was incurred.
2. Where the customs debt is incurred as the result of an act which, at the time it was committed, was liable to give rise to criminal court proceedings, the three-year period laid down in paragraph 1 shall be extended to a period of a minimum of five years and a maximum of 10 years in accordance with national law.”
79.	In contrast to Article 221, Article 103 appears to impose a positive obligation on Member States to extend the three-year period. Under that Regulation, HMRC’s argument that section 37(2)(a) of the LA should be disapplied or purposively construed might have considerably more force.

Lord Justice Newey:
80.	I agree.
Lord Justice Lewison
81.	I also agree.