Maksu- ja Tolliamet v UT (C-745/23)

Contents

Judgment of the Court (Fifth Chamber)30 April 2025^note(Reference for a preliminary ruling — Regulation (EU) 2018/1672 — Article 3(1) — Sum of cash not declared — Determining the value of a sum of cash denominated in foreign currencies — Exchange rate of a currency not published by the European Central Bank — Ukrainian hryvnia)In Case C‑745/23 [Alenopik],^noteREQUEST for a preliminary ruling under Article 267 TFEU from the Riigikohus (Supreme Court, Estonia), made by decision of 4 December 2023, received at the Court on 5 December 2023, in the proceedingsMaksu- ja TolliametvUT,THE COURT (Fifth Chamber),composed of M.L. Arastey Sahún, President of the Chamber, D. Gratsias, E. Regan (Rapporteur), J. Passer and B. Smulders, Judges,Advocate General: T. Ćapeta,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– the Estonian Government, by M. Kriisa, acting as Agent,– the European Commission, by F. Moro and E. Randvere, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 28 November 2024,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 3(1) of Regulation (EU) 2018/1672 of the European Parliament and of the Council of 23 October 2018 on controls on cash entering or leaving the Union and repealing Regulation (EC) No 1889/2005 (OJ 2018 L 284, p. 6).

2The request has been made in proceedings between UT and the Maksu – ja Tolliamet (Estonian Tax and Customs Authority; ‘the MTA’ or ‘the administrative authority’) concerning the value in euro of a sum of cash denominated in Ukrainian currency, for the purpose of applying the obligation to declare laid down in Article 3(1) of Regulation 2018/1672.

Legal context

European Union customs legislation

3Article 1 of Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ 2013 L 269, p. 1) (‘the UCC’), entitled ‘Subject matter and scope’, forms part of Chapter 1 of that regulation, entitled ‘Scope of the customs legislation, mission of customs and definitions’, contained in Title I thereof, entitled ‘General provisions’, and states, in paragraph 1 thereof:‘This Regulation establishes the [UCC], laying down the general rules and procedures applicable to goods brought into or taken out of the customs territory of the [European] Union.…’

4Article 53 of that regulation, entitled ‘Currency conversion’, forms part of Chapter 3 of that regulation, entitled ‘Currency conversion and time limits’, contained in Title I thereof, and lays down rules on the rate of exchange applicable where the conversion of currency is necessary for the application of customs legislation.

5Articles 48 and 146 of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ 2015 L 343, p. 558) (‘the UCC Implementing Regulation’) also contain rules in that area which implement some of the rules laid down in Article 53 of the UCC.

Regulation 2018/1672

6Recital 4 of Regulation 2018/1672 states:‘[Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community (OJ 2005 L 309, p. 9)] aims to prevent and detect money laundering and terrorist financing by laying down a system of controls applicable to natural persons who enter or leave the Union carrying amounts of cash or bearer-negotiable instruments equal to or greater than EUR 10000 or its equivalent in other currencies. The term “entering or leaving the Union” should be defined by reference to the territory of the Union as defined in Article 355 of the Treaty on the Functioning of the European Union (TFEU) in order to ensure that this Regulation has the broadest possible scope of application and that no areas would be exempt from its application and present opportunities to circumvent applicable controls.’

7Article 1 of that regulation, entitled ‘Subject matter’, provides:‘This Regulation provides for a system of controls with respect to cash entering or leaving the Union to complement the legal framework for the prevention of money laundering and terrorist financing laid down in Directive (EU) 2015/849 [of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (OJ 2015 L 141, p. 73)].’

8Article 2 of that regulation, entitled ‘Definitions’, provides, in paragraph 1 thereof:‘For the purposes of this Regulation, the following definitions apply:(a) “cash” means:(i) currency;…’

9Article 3 of that regulation, entitled ‘Obligation to declare accompanied cash’, provides, in paragraph 1 thereof:‘Carriers who carry cash of a value of EUR 10000 or more shall declare that cash to the competent authorities of the Member State through which they are entering or leaving the Union and make it available to them for control. The obligation to declare cash shall not be deemed to be fulfilled if the information provided is incorrect or incomplete or if the cash is not made available for control.’

The dispute in the main proceedings and the question referred for a preliminary ruling

10On 13 January 2023, UT, with her daughter, walked across the border between the Russian Federation and the Republic of Estonia via the border crossing point in Narva (Estonia). On that occasion, UT used the border crossing channel known as the ‘green channel’, which meant that she was not carrying any goods subject to an obligation to declare or that the quantity of those goods did not exceed the limits permitted by law. When UT was searched, she was found to have a total of 500000 Ukrainian hryvnias (UAH) in cash in her pockets, under her clothes and under the lining of the hood of her jacket. On the same day, the MTA drew up a report of an administrative offence in relation to UT.

11In order to determine the value in euro of the UAH 500000 which UT had on her in cash, the administrative authority relied on the exchange rate published on the website www.xe.com and concluded that, on the day of the border crossing, that cash had a value of approximately EUR 12565. Under Article 3(1) of Regulation 2018/1672, persons who carry cash of EUR 10000 or more must declare that cash to the competent authorities of the Member State through which they are entering or leaving the European Union. Consequently, the MTA found that UT should have declared the money she was carrying to it.

12By decision of 13 February 2023, the MTA imposed a fine of EUR 600 on UT for failure to declare cash under the tolliseadus (Law on Customs). The MTA also decided to confiscate the undeclared amount of UAH 500000, on the basis of that law and the Estonian Criminal Code.

13Before the MTA, UT had explained that she was not aware of the obligation to declare that amount of cash and that she had thus not intended to bring UAH 500000 secretly into Estonia. Moreover, she claimed that that money did not belong to her, but to a Ukrainian national residing in Estonia, who was not in a position to carry out transactions himself with the money he possessed, on account of the war following the Russian Federation’s invasion of Ukraine. According to UT, she had concealed that money under her clothes for fear of it being stolen. Last, she submitted that the person to whom that money belonged had checked the exchange rate of the Ukrainian hryvnia on the website www.tavid.ee at the material time and had inferred therefrom that UT was not under an obligation to declare the sum of UAH 500000 because the value of that sum was less than EUR 10000.

14UT challenged the decision of 13 February 2023 before the Viru Maakohus (Court of First Instance, Viru, Estonia), which upheld her action in part and, by judgment of 28 April 2023, annulled that decision in so far as it related to the penalty and the confiscation measure. By that judgment, the Viru Maakohus (Court of First Instance, Viru) imposed on UT 100 daily fines totalling EUR 400. That court did not order any confiscation measure and ordered that the UAH 500000 taken as evidence be returned to UT.

15The MTA brought an appeal on a point of law before the Riigikohus (Supreme Court, Estonia), which is the referring court.

16In the proceedings before that court, the MTA explained that, in order to convert a currency for the purpose of determining its customs value, it relies on the method set out in Article 53 of the UCC and Articles 48 and 146 of the UCC Implementing Regulation. Thus, in the case of currencies for which the exchange rate is not published by the European Central Bank (ECB), the competent administrative authority, in the present case the MTA, uses the exchange rates published on the website www.xe.com, as do other Member States.

17The MTA also emphasised that information on the obligation to declare cash when crossing the Estonian border from a country outside the European Union was available on its website, in the Estonian- and Russian-language leaflets distributed at border-crossing points and on information boards. According to the MTA, anyone crossing the border who has neglected to check the details concerning the import and export of cash before crossing the border can choose the border crossing channel known as the ‘red channel’ and decide there, in cooperation with an MTA official, whether a cash declaration is necessary.

18The Riigikohus (Supreme Court) has doubts as to how to determine the exchange rate in the case before it. The procedure for converting into euro cash introduced into the European Union in foreign currencies is not specified either in EU law or in national law. In order to convert the value of the Ukrainian hryvnias into euro, without a reference rate published by the ECB, the MTA relied on the exchange rate published on the website www.xe.com, in line with the practice of other Member States. Although that website is mentioned on the administrative authority’s webpage relating to the obligation to declare cash (www.emta.ee), there is no legal basis for considering that the exchange rates published on that website are legally relevant. If the administrative authority had applied the exchange rate stated on another website, namely that of Tavid AS, to be the rate applicable on the date on which UT and her daughter crossed the border, UAH 500000 would have been worth, on that date, only EUR 9 487.67.

19Furthermore, the administrative authority claims to have referred to Article 53 of the UCC on currency conversion, paragraph 1 of which provides that the competent authorities are to publish and/or make available on the internet the rate of exchange applicable where the conversion of currency is necessary either to determine the customs value of goods or to determine the tariff classification of goods. In accordance with paragraph 2 of that article, where the conversion of currency is necessary for reasons other than those referred to in paragraph 1 of that article, the Member State should provide that, in order to determine the applicable exchange rate, the customs legislation is to fix that rate at least once a year.

20However, the referring court has doubts as to whether Article 53 of the UCC is the appropriate legal basis for triggering the obligation laid down in Article 3(1) of Regulation 2018/1672, since that regulation makes no reference to it.

21In those circumstances, the Riigikohus (Supreme Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘How is the exchange rate to be used as the basis for establishing the value of cash within the meaning of Article 3(1) of Regulation [2018/1672] to be determined in a situation involving a currency the exchange rate for which is not published by the European Central Bank?’

Consideration of the question referred

22By its question, the referring court asks, in essence, whether Article 3(1) of Regulation 2018/1672 must be interpreted as precluding a Member State, in determining whether the obligation to declare laid down in that provision applies, from establishing the value of a sum of cash denominated in currencies other than the euro for the conversion of which the ECB does not publish a reference exchange rate, on the basis of the rate stated on a website to reflect parity between the euro and the currency in question on the date on which the person concerned entered or left the territory of the European Union, even though that rate is higher than the rate indicated on another website.

23In that regard, it should be recalled that Article 3(1) of Regulation 2018/1672 lays down an obligation for any natural person carrying cash of a value of EUR 10000 or more when entering or leaving the European Union to declare that cash.

24First, Article 2(1)(a)(i) of that regulation states that the concept of ‘cash’, within the meaning of that regulation, includes currency.

25Second, those provisions must be interpreted in the light of recital 4 of Regulation 2018/1672, from which it emerges that that regulation aims, in particular, to define the term ‘entering or leaving the Union’ used in Regulation 1889/2005, while the latter established, in identical circumstances, a cash controls system applying to the amount of EUR 10000 or its equivalent in other currencies. It follows that Regulation 2018/1672 has maintained, but clarified, such a controls system and, in particular, the thresholds to which its application is subject.

26Consequently, the obligation to declare laid down in Article 3(1) of Regulation 2018/1672 applies to the situation of a natural person who enters or leaves the European Union carrying a sum of cash denominated in a currency other than the euro, where that cash has a value of EUR 10000 or more.

27However, given that none of the provisions of Regulation 2018/1672 specifies the exchange rate to be applied in order to establish the value in euro of such a sum, it is for the Member States to determine that rate.

28In so far as, in determining that rate, the Member States are implementing Regulation 2018/1672, and therefore EU law, they must exercise their powers in a way that preserves the effectiveness of the provisions set out in that regulation and that observes the rights that individuals derive from EU law, in situations covered by EU law (see, to that effect, judgment of 11 January 2024, G (Early termination fees), C‑371/22, EU:C:2024:21, paragraph 50).

29In that regard, contrary to the position taken by the MTA in the main proceedings, the Member States are not required, for the purpose of determining that rate, to comply with Article 53 of the UCC and Articles 48 and 146 of the UCC Implementing Regulation. Article 1 of the UCC states that the UCC lays down the general rules and procedures applicable to goods brought into or taken out of the customs territory of the European Union. As the Advocate General observed in points 38 to 50 of her Opinion, a sum of cash denominated in foreign currencies which are regarded on the money markets as equivalent to local currencies does not constitute goods for the purposes of the provisions of the UCC, so that, in any event, the provisions referred to above cannot be applied to natural persons carrying sums of cash denominated in currencies other than the euro.

30By contrast, it should be noted, first, that Article 3(1) of Regulation 2018/1672 sets at EUR 10000 the threshold in value below which natural persons may carry a certain sum of money without having to declare it, that amount being a very precise value. In those circumstances, the effectiveness of that provision would be undermined if the Member States were able to choose an exchange rate that did not reflect the actual value of the currency concerned. Consequently, although there is not necessarily a single exchange rate applicable for a single currency, in order to be valid, the rate chosen must at least correspond to one of the rates actually and frequently applied to transactions involving the exchange of that currency into euro.

31Second, the principle of the rule of law on which the European Union is founded, as guaranteed by Article 2 TEU, and of which the principle of legal certainty is one of the constituent conditions to be met by the Member States, requires, in particular, that individuals must be able to ascertain precisely and unequivocally what their rights and obligations are. That means that, in order to be enforceable against individuals, the measures adopted by the Member States in order to implement EU law must be clear and precise and predictable in their effects, so that interested parties can ascertain their position in situations and legal relationships governed by EU law (see, to that effect, judgments of 26 March 2020, Hungeod and Others, C‑496/18 and C‑497/18, EU:C:2020:240, paragraph 93, and of 22 February 2022, Stichting Rookpreventie Jeugd and Others, C‑160/20, EU:C:2022:101, paragraphs 41, 42 and 45), and, moreover, freely and easily accessible.

32Consequently, with regard to the application of Article 3(1) of Regulation 2018/1672, it is true that it is for each Member State to decide the exchange rate to be applied in determining the value in euro of a sum of cash denominated in currencies other than the euro, provided that the rate chosen corresponds to one of the rates actually and frequently applied, in practice, to transactions involving the exchange of the currency concerned into euro. Nevertheless, in order to be enforceable against the persons concerned who enter or leave the European Union, the rate which the Member State in question intends to apply must, first of all, have been designated as such clearly, intelligibly and unequivocally, so as to enable those persons to know, unambiguously, that that rate applies in order for them to determine whether they should declare the cash that they are carrying.

33Next, the information relating to that rate must be easily and freely accessible to those persons, which means, in particular, that they are able to become aware of that information free of charge and, where reference is made for determining that rate to information published on a website, that they do not need to register on that website. By contrast, such an accessibility requirement does not mean Member States must indicate to each natural person entering or leaving the European Union the rate applicable for each of the existing currencies, it being sufficient for the necessary information to be available to any traveller seeking guidance on the applicable legislation.

34Last, with regard to the foreseeability of the exchange rate chosen, which is required by the principle of legal certainty, it must be emphasised that Article 3(1) of Regulation 2018/1672 is not intended to prohibit the carrying of cash denominated in currencies other than the euro and the value of which is equal to or greater than EUR 10000, but only to impose, in that situation, an obligation to declare. Given that the persons concerned are still able to assess whether they must fulfil such an obligation at the very moment when they enter or leave the territory of the European Union, it is sufficient, in order to satisfy the requirement for the rate chosen to be foreseeable, for the Member State concerned to have put those persons in a position to become aware, with certainty, of the rate applicable at such a moment and thus to determine, at the moment when they enter or leave the territory of the European Union, whether they must declare the cash that they are carrying.

35As regards the dispute in the main proceedings, it is for the referring court to ascertain whether the choice of the Member State concerned to use, for the purpose of applying Article 3(1) of Regulation 2018/1672, the exchange rate for Ukrainian hryvnia to euro published on the website www.xe.com at the material time satisfied those conditions. Nevertheless, in order to guide the referring court in that assessment, the Court may provide it with all the elements of interpretation under EU law which may be useful to it (see, by analogy, judgment of 7 April 2022, Berlin Chemie A. Menarini, C‑333/20, EU:C:2022:291, paragraph 46).

36In the present case, subject to verification by the referring court, first of all, it is apparent from the file submitted to the Court that the information on the website www.xe.com indicates that the exchange rates published there are those applied on various money markets, so that the rates published by that website correspond to the rates actually and frequently applied to exchange transactions and that, consequently, the Member State concerned could choose such rates for the purpose of applying the obligation to declare laid down in Article 3(1) of Regulation 2018/1672.

37Next, as the Advocate General stated, in essence, in point 68 of her Opinion, the authorities of the Member State concerned had indicated on their website, which it is nevertheless for the referring court to verify, that the exchange rates published on www.xe.com were those to be used by natural persons entering or leaving the European Union in order to determine whether the obligation to declare laid down in Article 3(1) was applicable to them.

38Furthermore, it also appears that the information relating to the exchange rate published on that website is free of charge and freely accessible, in that, in particular, no registration is necessary in order to access it, which it is also for the referring court to verify.

39By contrast, the file submitted to the Court does not contain any indication as to whether the exchange rates set out on www.xe.com are fixed for certain periods of time or whether they fluctuate continuously and whether, consequently, the applicant in the main proceedings was in a position to determine, with certainty, at the moment when she took the decision not to declare the cash that she was carrying, that the obligation to declare laid down in Article 3(1) of Regulation 2018/1672 was applicable to her.

40That being so, having regard to the scope of the principle of legal certainty, if the exchange rate at issue in the present case were to fluctuate continuously, it would follow only that the applicant in the main proceedings should be recognised as having the right to rely on the most advantageous exchange rate for Ukrainian hryvnia to euro published on www.xe.com for a short period of time surrounding the moment when it may reasonably be considered that she took the decision to enter the European Union without declaring the sum of cash that she was carrying.

41In the light of all of the foregoing, the answer to the question referred is that Article 3(1) of Regulation 2018/1672 must be interpreted as not precluding a Member State, in determining whether the obligation to declare laid down in that provision applies, from establishing the value of a sum of cash denominated in currencies other than the euro for the conversion of which the ECB does not publish a reference exchange rate, on the basis of the rate stated on a website to reflect parity between the euro and the currency in question on the date on which the person concerned entered or left the territory of the European Union, even though that rate is higher than the rate indicated on another website, provided that:– first, that rate corresponds to one of the rates actually and frequently applied to transactions involving the exchange of the currency concerned into euro;– second, that rate was designated by the Member State concerned clearly, intelligibly and unequivocally as the rate applicable for that purpose;– third, the information relating to that rate is freely and easily accessible; and– fourth, the persons concerned were thus in a position to become aware of that rate with certainty at the latest at the moment when they entered or left the territory of the European Union.

Costs

42Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Fifth Chamber) hereby rules:

1.first, that rate corresponds to one of the rates actually and frequently applied to transactions involving the exchange of the currency concerned into euro;

2.second, that rate was designated by the Member State concerned clearly, intelligibly and unequivocally as the rate applicable for that purpose;

3.third, the information relating to that rate is freely and easily accessible; and

4.fourth, the persons concerned were thus in a position to become aware of that rate with certainty at the latest at the moment when they entered or left the territory of the European Union.