ECJ Customs – C-488/24 (Kigas) – AG Opinion – Traders must inform consumers about customs duties before contracts

Opinion of Advocate General (AG) Ćapeta in Case C-488/24, D.V. v Kigas MB.

The case concerns a preliminary ruling request from the Supreme Court of Lithuania regarding the scope of the pre-contractual information obligations of traders providing international carriage services to consumers, specifically concerning customs duties. The AG’s opinion focuses on interpreting Article 5(1) of Directive 2011/83/EU (Consumer Rights Directive) and its interplay with the Convention on the Contract for the International Carriage of Goods by Road (CMR).

Background of the Case:

A Lithuanian consumer, D.V., contracted a transport company, Kigas MB, to move personal belongings from Norway to Lithuania for EUR 450.
Upon entering the EU (Sweden), customs duties of EUR 3,890.59 were levied and paid by Kigas.
Kigas invoiced D.V. for the total amount (transport + duties), but D.V. refused to pay the customs duties, claiming Kigas failed to inform him of applicable customs procedures beforehand.
The Lithuanian courts initially ruled in favor of Kigas, citing the consumer’s obligation under the CMR Convention to provide necessary customs documentation.
The Supreme Court of Lithuania referred questions to the Court of Justice of the European Union (CJEU) regarding the extent of a trader’s pre-contractual information obligations concerning customs duties under the Consumer Rights Directive.

Key Questions Referred:

The Supreme Court of Lithuania asked the CJEU to clarify:

Does Article 5(1)(a) of the Consumer Rights Directive (information on the characteristics of the service) require a trader providing international carriage to inform the consumer of applicable customs procedures? If so, is it enough to state the consumer is responsible for customs documents/duties, or must the trader provide detailed information (list of documents, rates)?
Does Article 5(1)(c) of the Consumer Rights Directive (information on the price) require the trader to inform the consumer of applicable customs duties (rates/amounts) for the specific carriage?

Main Themes and Arguments in the Advocate General’s Opinion:

Interpreting the Consumer Rights Directive: The AG emphasizes the need for a broad interpretation of the Consumer Rights Directive to ensure a high level of consumer protection, as stated in Article 1. She links this to the principle that consumers are in a weaker position than traders.
Relevance of the CMR Convention: While acknowledging the applicability of the CMR Convention to the contract, the AG stresses that it doesn’t supersede the Consumer Rights Directive concerning pre-contractual information obligations. Article 11 of the CMR Convention, placing the responsibility of customs documents on the sender, only applies after the contract is concluded. “Hence, that post-contractual obligation cannot be understood to exclude a pre-contractual duty on the trader to inform the consumer of the customs procedures that will apply and of the documents the consumer may have to provide to the carrier.“
Customs Duties as a “Main Characteristic”: The AG argues that customs procedures and potential duties are “main characteristics” of international carriage services under Article 5(1)(a) of the Consumer Rights Directive. Using the Unfair Commercial Practices Directive as a guide, she argues that information is “material” if its omission could lead the consumer to make a different transactional decision. Because duties can significantly increase the cost of international carriage, they can have a dissuasive effect. “Taking account of the fact that customs duties have the potential to significantly increase the overall cost of an international carriage… I believe that customs duties could be said to have a dissuasive effect on consumers and, consequently, are likely to deter them from concluding international carriage contracts.“
Scope of the Information Obligation (Detailed vs. General): This is the most crucial part of the opinion, and the AG differentiates based on whether the trader offers a customs brokerage service:
- With brokerage service: The trader must provide detailed information on necessary customs documents, rates, and amounts of duties, including the factors influencing the cost. This is because the customs brokerage is part of the service provided. “Article 5(1)(a) and (c) of the Consumer Rights Directive must be interpreted as meaning that a trader that provides a customs brokerage service to a consumer, as part of a service for the international carriage of goods, is obliged to inform the consumer of the customs procedures applicable to international carriage. That obligation entails a duty to provide detailed information on the specific documents necessary for customs formalities, as well as detailed information on the specific rates and amounts of customs duties, including information on the general factors that may influence the overall price of the service being provided.“
- Without brokerage service: The AG argues it would be disproportionate to expect the same level of detail. However, the trader must inform the consumer that goods may be subject to customs duties, and that the consumer will have to reimburse the trader for any duties paid on their behalf. They must also provide general information on the types of evidentiary documents potentially required (e.g., proof of origin, value). “Article 5(1)(a) and (c) of the Consumer Rights Directive must be interpreted as meaning that a trader that provides a service for the international carriage of goods – but not a customs brokerage service – is under an obligation to inform the consumer, prior to the conclusion of the contract, that the goods being transported may be subject to customs duties and that the consumer will be required to reimburse the trader for any duties paid by the trader on the consumer’s behalf.” This balances consumer protection with the competitiveness of businesses, especially smaller ones.
Application to the Main Proceedings: The AG points out that the contract between D.V. and Kigas did not include a customs brokerage service. Therefore, the key is whether Kigas provided D.V. with sufficient information about the potential for customs duties. The referring court must assess this.

Conclusion:

The Advocate General proposes that the Court answer the questions by stating that under Article 5(1)(a) of the Consumer Rights Directive, international carriage services must inform consumers that the goods being transported may be subject to customs duties prior to the contract and indicate whether they offer a brokerage service or not. The extent of additional detail required about specific procedures and amounts, beyond this general advisory role, is contingent on whether a brokerage service is included in the contract. If not, they must provide general information regarding the types of evidentiary documents required and the fact that the trader will require reimbursement for any duties paid on the consumer’s behalf.

Source Curia

Newsletters

According to AG CJEU, the carrier must inform consumers of possible customs duties due

Obligation to Inform About Customs Duties: Advocate General Ćapeta concluded that Kigas MB is required under the Consumer Rights Directive to inform D.V. about the potential customs duties that may apply when transporting goods from Norway to Lithuania. This obligation is critical in ensuring consumers are aware of all costs associated with their purchases.
Context of the Transport Agreement: The transport of goods was arranged verbally and not formalized with a written agreement or consignment note, which complicates the clarity of the terms and responsibilities. Following a customs inspection, Kigas MB incurred €3,890 in customs duties, which they subsequently charged to D.V., who contested this charge based on the lack of prior information.
Considerations for International Carriage Contracts: Advocate General Ćapeta discussed the implications of contracts for the international carriage of goods, particularly regarding whether they include customs brokerage services. The conclusion emphasizes the importance of transparency and consumer rights in international transport agreements, ensuring that consumers are adequately informed about potential additional costs.

Source Taxlive