The present arbitration is based on the bilateral Treaty of 2 October 1990 between the Federal Republic of Germany and the Czech and Slovak Federative Republic regarding the Promotion and Mutual Protection of Investments ("the Czech-German BIT" or "the BIT'") which, in translation into English, provides, inter alia, as follows:
For the purpose of this Treaty,
(1) the term "investments" comprises every kind of assets that are acquired in conformity with the domestic laws, in particular:
a) movable and immovable property as well as any other rights in rem, such as mortgages, liens and pledges;
b) shares of companies and other kinds of interest in companies;
c) claims to money which has been used to create an economic value or claims to any performance having an economic value and that relate to an investment;
(1) Each Contracting Party shall in its territory promote as far as possible investments of investors of the other Contracting Party and admit such investments in accordance with its legislation. It shall in any case accord such investments fair and equitable treatment.
(2) Neither Contracting Party shall in any way impair by arbitrary or discriminatory measures the management, maintenance, use or enjoyment of investments in its territory of investors of the other Contracting Party.
(3) Investments and revenue arising hereof and in the event of their re-investment such revenue shall enjoy full protection under this Treaty.
(1) Neither Contracting Party shall subject investments in its territory owned or controlled by investors of the other Contracting Party to treatment less favourable than it accords to investments of its own investors or to investments of investors oí any third state.
(2) Neither Contracting Party shall subject investors of the other Contracting Party, as regards their activity in connection with investments in its territory, to treatment less favourable than it accords to its own investors or to investors of any third state.
(1) Investments by investors of either Contracting Party shall enjoy full protection and security in the territory of the other Contracting Party.
(2) Investments by investors of either Contracting Party shall not be expropriated, nationalised or subjected to any other measure the effects of which would be tantamount to expropriation or nationalisation in the territory of the other Contracting Party except for the public benefit and against compensation. Such compensation shall be equivalent to the value of the expropriated investment immediately before the date on which the actual or threatened expropriation, nationalisation or comparable measure has become publicly known. The compensation shall be paid without delay and shall carry the usual bank interest until the time of payment; it shall be effectively realisable and freely transferable. Provision shall have been made in an appropriate manner at or prior to the time of expropriation, nationalisation or comparable measure for the determination and payment of such compensation. The legality of any such expropriation, nationalisation or comparable measure and the amount of compensation shall be subject to review by due process of law.
(1) If the legislation of either Contracting Party or obligations under international law.existing at. present or established hereafter between the Contracting Parties in addition to this Treaty contain a regulation, whether general or specific, entitling investments of investors of the other Contracting Party to a treatment more favourable than is provided for by this Treaty, such regulation shall to the extent that it is more favourable prevail over this Treaty.
(1) Disputes between the Contracting Parties concerning the interpretation or application of this Treaty • should as far as possible be settled by the governments of the two Contracting Parties.
(2) If a dispute cannot thus be settled, it shall upon the request of either Contracting Party be submitted to an arbitration tribunal.
(3) Such arbitration tribunal shall be constituted ad hoc as follows: each Contracting Party shall appoint one member, and these two members shall agree upon a national of a third State as their chairman to be appointed by the governments of the two Contracting Parties. Such members shall be appointed within two months, and such chairman within three months from the date on which either' Contracting Party has informed in writing the other Contracting Party that it intends to submit the dispute to an arbitration tribunal.
(4) If the periods specified in paragraph 3 above have not been observed, either Contracting Party may, in the absence of any other arrangement, invite the President of the International Court of Justice to make the necessary appointments.
(5) The arbitration tribunal shall reach its decisions by a majority of votes. Such decisions shall be binding. Each Contracting Party shall bear the cost of its own member and of its.representatives in the arbitration proceedings; the cost of the chairman and the remaining costs shall be home in equal parts by the Contracting Parties. The arbitration tribunal may decide on other allocation of costs. The arbitration tribunal shall, determine its own procedure.
(1) Disputes relating to investments between one of the Contracting Parties and an investor of the other Contracting Party should as far as possible be amicably settled between the parties in dispute.
(2) If a dispute cannot be settled within a time period of six months from the point in time when it was raised, it will be submitted to arbitration at the request of the investor of the other Contracting Parly. Unless the parties in dispute have agreed otherwise, the provisions of Article. 9(3) to (5) shall be applied mutatis mutandis on condition that the appointment of the members of the arbitration tribunal in accordance with Article 9(3) is effected by the parties in dispute and that, in so far as the periods specified in Article 9(3) are not observed, either party in dispute may in the absence of other arrangements, invite the Chairman of the Arbitration Institute of the Stockholm Chamber of Commerce, if not otherwise agreed, to make the required appointments. The Arbitral Award shall be recognised and enforced according to the rules of the Agreement of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.
(1) This Treaty shall be ratified; the instruments of ratification shall be exchanged as soon as possible in Bonn.
(2) This Treaty shall enter into force 30 days after the date of exchange of the instruments of ratification. It shall remain in force for a period of ten years and shall be extended thereafter for an unlimited period unless denounced in writing by either Contracting Party twelve months before its expiration. After the expiry of the period of ten years this Treaty may be denounced at any time giving twelve months’ notice.
(3) In respect of investments made prior to the date of termination of this Treaty, the provisions of Articles 1 to 12 shall continue to be effective for a further period of fifteen years from the date of termination of this Treaty.
CHAPTER ONE - DEFINITION OF BASIC TERMS
For the purposes of this Act, the following definitions shall apply:
(i) "customs debt" means the obligation of n person to pay the amount of the Import duties (customs debt on Importation) or export duties (customs debt on exportation),
(j) "customs supervision" means the complex of acts and measures for securing observance of laws and other generally binding legal regulations the implementation of which is within the competence of the customs authorities,
(l) "customs approved treatment" means:
the placing of goods under a customs procedure,
(m) "customs procedure" (hereinafter "procedure") only means:
2. transit (Sections 139 et seq.),
(n) "declarant" means the person making the customs declaration in his own name, or the person in whose name a customs declaration is made,
(o) "customs declaration" means the act made in the form prescribed by the customs rules, whereby the declarant indicates the wish to place goods under a given procedure or to terminate such procedure, and provides the data required by the customs authorities for the application of the given procedure in accordance with the customs rules,
(p) release of goods'' means the act whereby the customs authorities make goods available to an individually defined person for purposes stipulated by the procedure under which they are placed.
CHAPTER TWO - CUSTOMS AUTHORITIES AND THEIR ORGANISATION, CONTROL AND TASKS
(1) The customs authorities are authorities of state administration having jurisdiction in the area of customs, customs policy, customs tariff and customs statistics.
(2) The customs authorities shall also administer
(a) the value added tax and excise taxes collected on Importation,
(b) charges relating to Importation and exportation,
(c) the road tax In the case of foreign persons.
(1) Customs offices shall be established and their territorial jurisdiction shall be defined by Ordinance issued by the Ministry [of Finance].
The customs office shall
(a) make decisions on the release of goods under the proposed customs procedure,
(b) assess and collect duty, taxes and charges on importation, exportation or transit,
(e) determine the customs value,
(f) grant deferral of payment of duty and payment of duty in instalments,
(h) enforce the payment of outstanding amounts of duty, taxes and charges levied on importation, exportation or transit,
(1) carry out direct supervision of the movement of persons, goods and means of transportation in the customs border zone as part of customs supervision,
(n) cany out control after the release of the goods,
CHAPTER SIX - CUSTOMS DUTY AND CUSTOMS TARIFF
Goods subject to customs duty
(1) All imported goods. shall be subjected to import duty except goods explicitly designated as duty-free in the customs tariff.
(2) Exported goods shall be subject to export duty only if the customs tariff explicitly establishes such a duty,
(3) Goods explicitly designated as duty-free in international treaties shall not be subject to duty.
CHAPTER EIGHT- ENTRY OF GOODS TO THIS COUNTRY
ENTRY OF GOODS ACROSS THE STATE BORDER
(1) Persons who carry goods across the state border shall declare the goods at the border customs office and present therewith the documents relating to the goods.
(4) Transport of goods along a customs route shall he realised without delay, without a change in the ' cargo and without departure from the customs route.
(5) Customs checkpoint means a place designated for the movement of persons and transport of goods across the state border.
PRESENTATION OF GOODS FOR CUSTOMS SUPERVISION
(1) Goods brought into this country shall be conveyed by the person bringing them into this country without delay with an intact customs seal and in accordance with instructions issued by the customs authorities:
(a) to the competent customs office or to a different place designated or approved by the customs authorities,
(1) Any person who assumes responsibility for the carriage of goods after they have been brought to this country shall become responsible for the compliance laid down in Section 81.
(2) If so provided by an international treaty, goods shall be subject to customs supervision although still outside the customs territory of this country and shall be cleared in the same manner as goods already brought into the country;
PRESENTATION OF GOODS TO CUSTOMS
(1) The person who brought goods to this country or the person who assumed responsibility for carriage of the goods in this country following their entry and who delivered them to the locations specified in Section 81 shall present the goods to customs.
CHAPTER NINE - CUSTOMS-APPROVED TREATMENT OR USE
The purpose of customs proceedings which are being held within the framework of customs supervision shall be to decide on placing the goods in question under the proposed customs procedure.
Initiating customs proceedings
Customs proceedings shall be initiated by lodging a customs declaration proposing that the goods in question should be placed under a specified customs procedure.
(1) Customs proceedings shall be held al a customs office or in customs zones.
(2) Customs zones are marked sections or railway depots, ports of airports und other areas specified bythe customs authorities in agreement with the owners or authorised users of such areas.
(3) At the request and at the expense of the declarant, customs proceedings may also be conducted outside a customs zone.
(4) the Ministry shall lay down in an Ordinance the conditions under which proceedings are conducted outside a customs zone and set the amount of expenses to be charged for conducting such proceedings.
(6) Customs proceedings shall be conducted in the presence of the declarant.
Decisions in customs proceedings
(1) The basic requisites of decisions issued in customs proceedings shall be:
(a) designation of the customs office which issued the decision,
(b) the serial number of the decision, the date of receipt of the customs declaration, the date of Issue of the decision,
(c) the exact designation of the declarant,
(d) the designation of the goods in question,
(e) the subheading of the customs tariff and the rate of duty levied on the goods,
(f) the amount of the duty, tax and charge, and the number of the bank account to which this amount is to be paid,
(g) the signature of the authorised officer of the customs office which issued the decision, with his name, surname and official rank added, and the official seal.
Form and requisites of a customs declaration
(1) The customs declaration shall be made:
(a) in writing or
(b) using a data processing and transmission technique where permitted by the competent customs authority, or
(c) by means of an oral declaration or any other act whereby the holder of the goods expresses his wish to place them under the customs procedure in question.
(2) A customs declaration made in written form shall be always signed by the authorised person.
Section 107 The declarant
(1) A customs declaration may be made by any person who is able to present the goods in question, orto have them presented, to the competent customs office together with all the documents which are required "to^be produced for the application of the-rules governing the customs procedure in -respect of which the goods were declared,
(1) The declarant may be only a Czech person.
(2) The provision of paragraph 1 shall not apply to cases where a person:
(a) makes a declaration to place goods under a transit or temporary use procedure,
(b) declares goods on an occasional basis, provided that the customs office considers this to be justified.
DISPOSAL OF GOODS
At the declarant’s request, the customs office may permit that the goods be disposed of prior to their release. The customs office shall grant the request in every case when the grounds for not releasing the goods are merely the necessity of determining the origin of the goods, the place of their dispatch, their tariff classification or their customs value. Security shall be provided for any customs debt which does or could arise.
(1) Where the implementation of the procedures in question is properly ensured, the customs office may, in order to simplify completion of formalities and procedures, grant permission for
(a) the written customs declaration made on the prescribed form (Section 105, para. 5) to omit all the prescribed particulars, or some of the prescribed documents not to be attached thereto or presented, or
(b) the goods to be entered at the declarant’s request for the procedure in question on the basis of a commercial or administrative document replacing the customs declaration.
CHAPTER TEN - CUSTOMS PROCEDURES
RELEASE FOR FREE CIRCULATION
Release for free circulation shall confer on foreign goods the status of Czech goods. Release for free circulation shall entail application of the pertinent commercial policy measures and other formalities laid down In respect of the importation of goods and the charging of any duties due.
SUSPENSIVE ARRANGEMENTS AND CUSTOMS PROCEDURES WITH ECONOMIC IMPACT
Provisions common to several procedures
(1) The term "suspensive arrangement’' Is understood ns applying to the following procedures:
(3) "imported goods" means goods placed under a suspensive arrangement and goods which, under the inward processing procedure In the form of the drawback system, have met the conditions laid down for release for free circulation and the conditions set in Section 175.
(1) A suspensive arrangement with economic impact shall be discharged when a new customs-approved treatment or use is assigned to the goods.
(2) The customs office shall take all the measures necessary to place the status of the goods in harmony with the conditions laid down for the procedure in question.
(1) Transit means a procedure covering goods transported under customs supervision from one customs office to another customs office.
(2) Transit operation means the movement of goods in transit from the customs office of dispatch to the customs office of destination.
(4) The customs office of dispatch means any customs office where the transit operation begins.
(5) The customs office of destination means any customs office where the transit operation ends.
(9) Internal transit means transit from the customs office of entry to an inland customs office.
(1) Any person who is entitled to dispose of the goods may propose that the goods be released under the transit procedure. The customs office may require the declarant to prove that he is entitled to dispose of the goods.
(2) The declarant shall bear responsibility towards the customs office for fulfilment of the obligation arising from the transit procedure; he shall, in particular, ensure that the goods are produced under conditions laid down by the customs office of dispatch to the customs office of destination in an unaltered state, with an intact customs seal and with the accompanying documents.
(1) Save where an international treaty or this Act provides differently, the proposal to releasing the goods under transit procedure shall be filed with the customs office of dispatch on a form issued or approved by the General Customs Directorate.
(4) The customs office of dispatch shall decide whether and under what conditions it will release the goods and how their identity is to be•secured, When the declarant fails to present a proposal for securing a. customs debt, the manner of securing the customs debt shall be determined by the customs office,
(1) Before goods are released for transit procedure, the declarant shall provide security for any customs debt which may arise in respect of such goods.
CHAPTER THIRTEEN - CUSTOMS DEBT
(1) A customs debt on importation shall be incurred through the unlawful removal from customs supervision of goods liable to import duty.
(2) The customs debt shall be incurred at the moment when the goods are removed from customs supervision.
(3) The debtor shall be:
(a) the person who removed the goods from customs supervision,
(b) any person who participated in such removal and who was or should have been aware that the goods were being removed from customs supervision,
(c) any person who acquired or held goods removed from customs supervision and who was or should have been aware at the time of acquiring or receiving the goods that they had been removed from customs supervision,
(d) the person required to fulfil the obligations arising from temporary storage of the goods or from the use of the customs procedure under which those goods were placed.
Where several persons are liable for payment of one customs debt, they shall be liable for such debt jointly and severally.
SECURITY TO COVER CUSTOMS DEBT
(1) Where, in accordance with customs rules, the customs authorities may require security to be provided for ensuring payment of a customs debt, such security shall be provided by the debtor or by the person who may become liable for the debt.
(3) The customs authorities may permit the security to be provided by a person other than the person from whom it is required.
The following shall be deemed equivalent to a cash deposit as security covering a customs debt:
(a) submission of a cheque the payment of which is guaranteed by a bank,
(b) submission of any other instrument recognised by the customs office as a means of payment.
(1) The guarantor shall undertake in his letter of guarantee in writing to pay jointly and severally with the debtor the secured amount of a customs debt.
(2) The guarantor may be only:
(a) a bank,
(b) any person approved by the customs authorities.
(3) The customs authorities may reject or refuse to approve the proposed guarantor when they have warranted doubt that the customs debt will be paid within the prescribed term.
TIME-BARRING AND EXTINCTION OF CUSTOMS DEBT
Time-barring of the right to claim outstanding duty
(1) The right to recover and enforce the payment of outstanding duty shall be time-barred after six years following the year when such duty became due.
REPAYMENT AND REMISSION OF; DUTY
(1) Where no deception or obvious negligence can be attributed to the person concerned, the customs office may repay or remit Import or export duty also for other reasons than those referred to In Seclions 286 to 288, in particular if payment of the duty would seriously impair the livelihood of the debtor or of persons depending on him for their livelihood, or if enforcing the payment of the outstanding amount of duty would result in the economic ruin of the debtor.
(2) The customs office shall repay or remit the duty for the reasons stated in paragraph 1, If an application is submitted to it within twelve months of the day on which the amount of duty was communicated to the debtor.
CHAPTER SEVENTEEN - JOINT, INTERIM AND FINAL PROVISIONS
Where an international treaty contains provisions differing from this Act or from regulations issued thereunder, the provisions of the international treaty shall apply.
Save where this Act provides differently, proceedings before customs authorities shall be governed:
(a) in matters of customs transgressions by the general regulations governing transgressions,
(b) in other matters by the general regulations governing administrative procedure.1
Securing and determining the customs debt and time-barring of the right to enforce payment of outstanding duty (Sections 254 to 282) shall also cover securing and determining the obligation io pay taxes and fees on importation and time-barring of the right to enforce payment of taxes and fees on Importation.
Customs proceedings outside the customs area
(in relation to Section 102, subsection 4 of the [Customs] Act)
(1) If a declarant requests the realisation of customs proceedings outside the customs area, the declarant must make the request sufficiently In advance, inform the customs authority of the approximate amount of goods and the type of goods using the nomenclature which Is common In commerce and propose the time for the realisation of the customs proceedings; the declarant is obliged to inform the customs authority of any subsequent changes to this information. and to do so without any undue delay.
(2) Customs proceedings may take place outside a customs area, if this is justified by reasons of economy, especially if it simplifies the transportation of the goods, or if it is otherwise imperative and does not breach the regular. activities of the customs authority.
(3) Customs proceedings do not take place outside the customs area, if the customs authority designates that the customs supervision will only be realised by means of an inspection of the documents and written materials.
(4) the customs authority will realise the customs proceedings outside a customs area, provided that all of the necessary documents pertaining to the product and the means of transport, in which the goods are transported, are prepared in the period proposed by the declarant, so that the customs proceedings can be commenced immediately and concluded without delay.
(5) If the customs authority undertakes the customs proceedings outside a customs area, the declarant will defray the customs authority the costs of the proceedings as follows.
Upon application of the declarant, who proposes the release of goods into free circulation, the customs authorities may, subject to the conditions stated in Sections 44 to 46, permit the imported goods to be presented at the premises used for business by the declarant, or in other places outside the customs area as authorised by the customs authorities.
(1) The customs authorities may issue an authorisation under Section 43, if
(a) the applicant’s records enable efficient control by the customs authorities, in particular control after the release of the goods,
(b) the adherence to prohibitions and restraints and other provisions, which govern the release of goods, into free circulation, can be assured.
(2) The customs authorities do not grant a permit under Section 43, if the person, who applies for the permit,
(a) repeatedly has violated customs regulations,
(b) only occasionally proposes the release of goods into free circulation.
(1) If the customs authorities discover that the applicant has repeatedly violated customs regulations, they will withdraw the permit granted.
(2) The customs authorities may withdraw the granted permit, if they discover that the applicant only occasionally proposes the release of goods into free circulation.
(1) A person, who is granted a permit, is obliged, after presentation of the goods at the location specified in Section 43,
(a) to inform the customs authorities immediately about -delivery of goods, in the form and under conditions set by the customs authorities,
(b) to enter the delivered goods into its records which must, in particular, include data making it possible to determine the character of the goods and the date when it was entered into the register,
(c) to prepare such documents as are necessary for the release of goods into free circulation.
(2) If the proper execution of customs supervision is not effected, the customs authorities may authorise à person who is granted a permit pursuant to Section 43,
(a) to submit a declaration pursuant to paragraph 1 (a) already at the time of imminent delivery of the goods,
(b) in special cases, depending on the kind of goods and the frequency of imports, not to inform the customs authorities about each delivery of goods, if all data, which the customs authorities consider necessary for the performance of any possible customs control, are presented to the customs authorities.
The entry of the goods into the declarant’s records in these cases is considered as an authorisation to dispose of the goods.
An application for the permission listed in Section 43 has to contain the following information:
a) the exact denomination of the goods which it concerns,
b) a proposal form of notification that the goods were delivered outside the customs area,
c) a proposal for the mode of record of the goods delivered outside the customs area,
d) a commitment to prepare documents that are necessary for the release of the goods into free circulation or into the regime of storing goods in the customs storage area,
e) a proposal for the time-limit, within which the customs declaration will be submitted to the customs office,
f) a proposal for the designation of the day from which it will be possible to consider the goods as released.
A permission mentioned in Section 43 has to contain the information given in the application that was handed in according to Section 47.
(a) at the Claimant 's request:
(b) at the. Respondent 's request:
(a) a declaration that the Czech Republic has acted in breach of the following provisions of the Czech-German BIT:
(i) the obligation of fair and equitable treatment [Article 2(1)],
(ii) the obligation not to impair investments by arbitrary or discriminatory measures [Articles 2(2), 3(1) and 3 (2)],
(iii) the obligation of full protection and security [Articles 2(3) and 4(1)],
(iv) the obligation not to deprive the Claimant of his investment [Article 4 (2)], and
(v) the obligation to treat investments at least as well as required by international law [Article 7(1)],
(b) a declaration that the Tribunal retains jurisdiction and that the Tribunal, in a third phase of this arbitration, will address the appropriate redress for the Treaty breaches, including questions of quantum, and
(c) an order that the Czech Republic pay the costs accrued in this arbitration, including the costs of the Tribunal and the legal and other costs incurred by the Claimant.
(a) dismiss all the Claimant’s claims pursuant to the Czech-German BIT,
(b) order the Claimant to pay all the costs and expenses of this arbitration, including the fees and expenses of the Arbitral Tribunal and the fees and expenses of the Respondent’s legal representation, on a full indemnity basis, and
(c) award such other relief as the Arbitral Tribunal considers appropriate.
(a) When arriving at the Czech border point Breclav-dálnice, the driver of the tank truck, as a first step, reported to the local CARGO office, CARGO being a duly licensed customs agent. The driver handed in the bottom part of the Part 5 slip from any previous TCP, duly signed, numbered and stamped by the inland customs office. This document constituted proof that the haulier had complied with the procedure of presenting any previous shipment for final customs clearance at an inland customs office. The haulier then requested that CARGO prepare and deliver a TCP for the new customs transit procedure.
(b) The CARGO office of Breclav-dálnice verified that the previous transport under the TCP regime, issued to that particular haulier, had been finally presented at the relevant inland customs office. This was done by inspection of the Part 5 slip and the customs stamp and signature affixed to it. The Part 5 slip was then retained by CARGO and filed for verification purposes. The CARGO office further verified that the requisite shipping documents were complete and in good order, i.e. the CMR way-bill together with a commercial invoice, packing lists/specification and an export customs declaration, including the necessary data and seals. CARGO would also check the driver’s identity on the basis of his passport and check his signature on the TCP under the text containing the haulier’s guarantee undertaking.
(c) Provided that these shipping documents were found to be in order, the CARGO office would prepare the requisite TCP. The particulars of the TCP were also entered into CARGO’S computer data base, and, additionally, transferred to the customs authorities’ central data base (SLIGOS), which was accessible for all Czech border and inland customs offices. CARGO had its own intranet system, which was also linked to the customs authorities’ database by way of a third party provider (Transoft). CARGO could - and did - enter data into SLIGOS but could not get access to information from that'facility,
(d) The TCP was printed in hard copy and handed over to the truck driver for presentation at the adjacent customs office at the border crossing Breclav-dálnice, At the same time, the TCP was communicated to that border customs office by intranet in electronic mode. As soon as the TCP had been received and accepted by the customs office, the specific customs transit operation would be accounted for as "open" in the customs administration’s data base. At the same time, a hard copy of the TCP, duly signed and stamped, was issued by the customs office. It would remain "open" as long as presentation of the goods, at the inland customs office had not taken place.
(e) Additionally, CARGO would print out and issue the so-called "zárucní listina" — a surety bond - for the particular transit operation, The surety bond was printed out together with the TCP and the TCP number (at the bottom) was also printed out in full by the CARGO computer. The name of the particular "'declarant" was added, as well as the date. The surety bond was additionally signed and stamped by CARGO.
(f) The truck driver, provided With an admission slip, would go to the customs desk of the Breclav-dálnice Customs Office and.,hand.over.the TCP and the surety bond issued by the CARGO office, together with the shipping documents. The customs officer at the customs office would undertake an inspection of the documents to ensure their consistency and compliance with the pertinent requirements. As for the surety bond, the customs officer would add by hand the provisional assessment and sign and stamp the document. In addition, an optical inspection of the physical condition of the customs seal on the cargo would be made.
(g) Further, a time-limit for presentation of the goods at the inland customs office (two or a maximum of three days) would be noted, after which the customs officer would register the TCP in a binder, "Expedited deliveries", and, additionally, record the opening of the TCP prepared by CARGO electronically in the customs software data base.
(h) The driver would proceed to the passport control and then return to his tank truck with the TCP and associated shipping documents, He would continue to the physical checkpoint, present the documents and hand over his admission slip to the customs officer, who would authorise the onward transport in the customs transit regime. The driver would then leave the border crossing with the shipment, the TCP and the shipping documents.
(i) The customs officer at the Breclav-dálnice Customs Office would then make a copy of the surety bond and return this copy to CARGO with the provisionally determined amount of customs charges (or, in this case, the amount of excise taxes) filled in. This would enable CARGO - as well as the customs authorities themselves - to continuously monitor the aggregate amount of CARGO’s potential guarantee exposure (and that of the hauliers/drivers) by reason of outstanding "open" shipments in the customs transit regime.
(j) The Breclav-dálnice Customs Office sorted, after receipt of its mail, the Part 5 slips (upper part) in a specific file and also verified the computer-stored update of pending ("open") customs operations and their due finalisation.
(k) The truck driver would forward the shipment "under the customs transit regime" to the inland customs office (or to another place, if a "simplified customs procedure" had been authorised). There, he would present the goods indicated in the TCP transit document within the prescribed time-limit and in an unmodified condition to a customs official.
(l) The customs officer at the inland customs office would review the documents and inspect the condition of the customs seal affixed to the cargo, Having ascertained that the documents were in order and that the seal had not been tampered with, the customs official would confirm that the shipment had been duly presented at the "customs office of destination". This he would do by applying a customs stamp to the Part 5 slip of the TCP, together with his signature, and noting the serial number of the TCP concerned. Additionally, he would enter the arrival of the transit goods In an "incoming transit book" and in electronic mode.
(m) Moreover, the customs officer of the inland customs office would return the upper part of the Part 5 slip (return note) - by internal routing within the customs authorities’ administration - and the driver would receive the bottom part of the Part 5 slip. This stamp constituted proof that the shipment had been presented at the customs office of destination, and that the liability of the haulier/driver and CARGO had come to an end.
(n) After having made the necessary verification of the accuracy and completeness of the shipping documents and an inspection of the cargo seals, the customs office would calculate and determine the amount of excise taxes payable. The Final Customs Declaration ("JCD") and the shipping documents would be handed out to the importer against payment of the determined amounts (or posting of Security).
(a) [REDACTED] succeeded in a two months period (13 June - 14 September 1994) to import and spirit off no less than 643 tank trucks fully loaded with oil products, thereby avoiding to pay a customs debt of almost CZK 200 million (approximately EUR 6 million). In the next few months (6 September - 29 December 1994), he also, through the entirely insolvent company HOREX Zlin s,r.o., managed to avoid payment of excise taxes by its failure to honour tax assessments relating to the import of 764 truck loads of oil products in the amount of approximately CZK 230 -million (approximately EUR 8 million). He would not have been able to do this without the active involvement of the customs authorities.
(b) [REDACTED] participation in the tax fraud involved CZK 55 million (approximately EUR 2 million), and CZK 25 million (approximately EUR 1 million), respectively, rightfully due to the Czech treasury. [REDACTED] acted under the trading name [REDACTED] which carried out 207 shipments of oil products in the period 1-6'November - 5 December 1994. During the same period [REDACTED] ran up a tax debt of CZK 54.6 million (approximately EUR 2 million), more than fifteen times the amount of the required security. This bears witness of the inadequacy of the requested security and the complicity of the customs authorities in the tax fraud.
(c) [REDACTED] who in all likelihood was also involved in the tax fraud, was sentenced to a 10 year prison sentence by a judgment of the Brno District Court in the year 2000.
(a) free circulation regime reference to Sections 128 to 132 of the Customs Act,
(b) active treatment-contact regime in return system (EU terminology inward processing relief) reference to Sections 163 to 178 of the Customs Act,
(c) imported back into free circulation from the passive treatment contact regime (EU terminology: outward processing relief) - reference to Sections 197 to 213 of the Customs Act,
(d) temporary use (EU terminology: temporaly import) - reference to Sections 238 to 253 of the Customs Act.
(a) In cases where the driver is formally stated in a customs declaration as the ¡customs declarant it cannot be automatically inferred that this person really is the customs declarant, as in some cases the driver acts on behalf of his employer on the basis of a power of attorney. When investigating whether the driver actually is the customs declarant, all relevant means of evidence.must be considered.
(b) The obligation of the driver to pay the customs debt cannot be imposed automatically and based only on a formal application of the appropriate provisions of the Customs Act to the data and information included in the customs declaration, if the circumstances indicate that someone else might have committed an unlawful action resulting in failure to deliver the goods to the customs office of destination.
(a) The interventions of a public authority in the private sector are significantly restricted by the running of time. If the law tends to create a special group of state receivables that are not subject to any time limitation, the legal certainty of those addressed by the legislation is threatened (Section 1(1) of the Constitution).
(b) The purpose of applying the time fear is to enhance the legal certainty of those participating in legal relations, stimulating creditors (regardless of whether it. concerns a private or a public entity) to assert their rights within the required time period. For a public authority’s claims, the time bar reduces tire possibility of wilfully intervening in the legal rights of individuals and legal entities.
(c) Since the Customs Act did not determine the lapse period for customs assessment and with respect to Section 320(b) of the Customs Act, it is necessary to follow Section 4(2) of Act No. 212/1992 on the Tax System, according to which tax can neither be assessed, nor be recovered, after a period of three years from the end of the calendar year in which the taxpayer or a person responsible for the tax must file a tax return or in which the debtor is liable to withhold tax or make a relevant tax prepayment.
(a) the imposition of illegal guarantee claims leading to the destruction of the Claimant’s investment in the Czech Republic caused by a tax fraud made possible by the complicity of public officials or by failure to provide a functional customs administration as regards supervision and control,
(b) imposition of illegal guarantee claims on hauliers/drivers - and, hence, on CARGO -without providing the primarily indebted persons with protection of their fundamental rights of due process in respect of matters relevant to Section 240(3) (a) and (b) of the Customs Act,
(c) failure to heed domestic court decisions by enforcing guarantee claims in cases not yet set aside by a Czech court in the presence of analogous cases which have been set aside, and
(d) enforcing guarantee claims for unpaid excise taxes and VAT on the basis of CARGO’s guarantee undertaking, covering "customs debt" only.
(a) formalities at customs office of dispatch and beginning of transit procedure (step 1),
(b) end of transit and customs clearance at customs office of destination (step 2) or at importer’s location (step 2 bis),
(c) discharge of transit procedure by customs office of dispatch (step 3), and
(d) inquiry procedure (step 4) in case of suspected breach of conditions of transit regime.
(a) The security for the customs debt had to be provided by the declarants tin the present case the drivers, by way of a deposit in-cash. The customs authorities could also permit a customs debt to be secured by a person other than the declarant, i.e. a customs agent like CARGO.
(b) The amount of the security should be either the precise amount of the customs-debt in question or the maximum amount estimated by the customs authorities. In the present case, the amount of the customs debt was calculated by reference to the quantity of oil imports declared by the drivers with respect to each of their transit shipments.
(c) When the customs debt was secured by a guarantor, the latter should undertake in his surety bond to pay jointly and severally with the debtor the secured amount of a customs debt.
(a) Fraudsters involved in the Diesel case started importing oil from the Slovnaft refinery in the month of February 1994, first in small quantities (16 shipments between February and May 1994). Starting in June 1994, relatively large quantities were imported (215 shipments in June 1994, 173 in July, 283 in August, 406 in September).
(b) Among the 259 transit shipments performed between February and 7 July 1994, only six were fraudulent and led the customs administration to raise CARGO’s guarantee. This technique is classically implemented by fraudsters so as to initiate a climate of confidence with the customs agent before starting their unlawful activities.
(c) Between 7 July 1994 and 2 May 1995, a total of 1,805 oil shipments imported by fraudsters in the Diesel case were accepted for internal transit procedure from the Breclav-dálnice Customs Office, the vast majority of these shipments taking place before 31 December 1994.
(d) A large number of these transit procedures were fraudulently closed by two stamps on the TCPs, copy 5, i.e. one stamp of the inland customs office of Olomouc 1366, with the sequential number 21, and one stamp of the inland customs office of Olomouc 1373 with the sequential number 12.
(e) A report from the Institute of Criminology Prague dated 20 March 1996 has established that these stamps were forged. This conclusion was confirmed in a police report of the Section of Technical Expertise in the Area of Documents and Communications in Writing dated 22 July 1996. A total of 1,245 transit shipments were concerned by such fraud and remained open.
(f) Despite extensive criminal investigation ¡including the examination of a large number of witnesses such as representatives and employees of CWA, [REDACTED] Horex UNITIP, [REDACTED] CARGO and the customs authorities no evidence was ever found that the customs administration was implicated in the fraud.
(a) On 4 November 1994, a shipment of diesel oil exported by Slovnaft and imported through Horex was presented at the Breclav-dálnice Customs Office. The declarant was a driver [REDACTED]. This shipment was released into the internal transit procedure under cover of CARGO’S guarantee,
(b) On the same day, the bottom part 5 of the TCP was stamped with the false stamp Olomouc 1373, serial number 12. This stamp is one of the two stamps that were later established to be forged. In other words, the transit procedure was fraudulently completed. The goods in question were never submitted to the customs office of destination and were instead dumped on the market without excise taxes being paid.
(c) On 7 March 2000, the Breclav-dálnice Customs Office issued a payment order against CARGO to fulfil the guarantee claim in the amount of CZK 341,721.
(a) Firstly, the true meaning of the decision of the Regional Court of Brno was that the guarantee claims were reasoned on the Customs Act as amended in 199 7 whereas this legal text was not in force when the facts complained of took place in 1994-1995. Never did the Regional Court of Brno rule that the guarantee claims lacked merit.
(b) Secondly, the Regional Court of Brno never ordered the customs administration to reimburse any sums to CARGO. Far from that, the Regional Court of Brno returned the matter to the Breclav-dálnice Customs Office "for further procedure", i.e. it invited the customs office to issue a new decision based on the Customs Act as applicable in 1994-1995.
(c) Thirdly, the customs administration was perfectly right in refusing to reimburse any sums to CARGO between the day of the judgment returning the matter to the customs office and the day a new decision was issued by this customs office. The reason is that the state was entitled under Czech law to set off any amounts due by the state to a private party against any amounts due to the state by this private party. These explanations were made clear to CARGO on numerous occasions, for instance in a decision dated 22 February 2003 by the Breclav-dálnice Customs Office that was confirmed by the Customs Directorate Brno on 16 April 2003.
(d) Finally, on the merits, the Regional Court of Brno has ruled that "the issue of the existence of a customs debt had been solved by another decision of the customs organs that entered into force". In other words, the Czech court ruled that, on the merits, the existence of a customs debt may no longer be challenged.
(a) the permits allegedly granted to [REDACTED] Horex and UNITIP by the Zlin Customs Office on 1 May 1994, 1 June 1994 and 7 April 1995 respectively, and
(b) the permit granted to CWA by the Customs Office Ceske Budejovice on 27 June 1994.
(a) Section 124(1)(b) of the Customs Act was aimed at simplifying the customs procedures from an administrative point of view by allowing a declarant to release goods into a customs regime on the basis of a commercial/administrative invoice only. Of critical importance here is the fact that such simplification of customs declarations applied to any customs regime except transit. This is what the Regulation SPC 126 (OS-35) clearly states: "Under the permitted simplified procedure a declarant may submit a customs declaration for the release of goods into a relevant regime, except for the transit regime - - - ".
(b) Goods presented to a border customs office under the umbrella of the simplified procedure of Section 124(1)(b) were released into free circulation on the basis of a commercial invoice instead of a TCP. However, such simplified procedure allowed the importer to present such goods accompanied by commercial invoice only to the customs office which granted such procedure. in other words, a simplified procedure granted by the Customs Office Ceské Budejovice could never be used for deliveries of goods elsewhere (neither the Zlin/Otrokovice Customs Office nor CWA's premises). The authorisation granted to CWA may therefore not apply to the present case where CARGO’S guarantee was enforced as a result of the unlawful removal of transit shipments from customs supervision.
(c) A simplified procedure granted in accordance with Section 124(1)(b) of the Customs Act also implied that no customs agent was involved in the procedures performed under the umbrella of such permit. Indeed, in accordance with the terms of Section 124(1)(b), simplified procedures implied that no TCP was issued since it did not apply to transit operations. Furthermore, no specific surety bond had to be issued either, since the authorisation for the simplified procedure under Section 124(1)(b) required another type of securing of the customs debt. In the case of CWA, this was done by the Agreement on Securing Customs Debt concluded between CWA and the Customs Office Ceské Budejovice on 29 June 1994, which is an inseparable part of the decision of the Customs Office Ceské Budejovice allowing CWA to use the simplified procedure.
(a) First of all, even if there was an authorisation to deliver the goods directly to CWA’s premises in accordance with Section 102(3) of the Customs Act, a customs officer would still have had to be present at CWA's premises in order to confirm the présentation of the goods and to have the customs clearance performed at that place. The absence of any customs officer at CWA’s premises is corroborated by some drivers who testified that they never dealt with any customs officer upon their arrival at Lipová or Slusovice.
(b) Secondly, by handing over the TCPs to CWA’s employees and believing they would attend the customs proceedings instead of them, the drivers clearly breached -their duties as declarants of the transit shipments. Indeed, by virtue of Sections 140(2) and 102(6) of the Customs Act, the drivers acting as declarants of the transit shipments were under a duty to "ensure that the goods are produced under the conditions laid down by the customs office of dispatch to the customs office of destination in the unaltered state, with an intact customs seal and with the accompanying-documents" and to attend the customs proceedings. As a result of their non-compliance with their duties as declarants of the goods, the drivers allowed the unlawful removal of the goods from customs supervision by CWA’s employees, thus giving rise to an obligation for which they were jointly and severally liable with CARGO acting as the guarantor for these transit shipments.
(a) First of all, the documents issued for transit shipments where [REDACTED] Horex and UNITIP were the "consignees" were systematically. handed over to the head of the dispatching of CWA, i.e. [REDACTED] and not to the customs office of destination specified in the TCP as prescribed by the Customs Act. The fact that the transit declarations were kept by [REDACTED] and that no one, neither at CWA nor at the Zlin Customs Office, ever saw him attending the customs proceedings, necessarily leads to the conclusion that those documents were never handed over to the customs office of destination specified in the TCP.
(b) Secondly, one may also note that the Claimant’s assertion that CWA’s employees brought the customs documents to the customs office of destination cannot be reconciled with the Claimant’s position in this arbitration. According to him, the goods were delivered and cleared directly at CWA’s premises by virtue of a simplified procedure. However, since the customs clearance had to be performed in the presence of a customs officer (even under the simplified procedure), the Respondent does not understand why CWA’s employees would have to bring the customs documentation to the Zlin Customs Office when these documents could have been directly taken over by the customs officer who was supposed to attend the customs clearance at CWA’s locations,
(a) to assess the financial situation of the declarants it accepts to guarantee,
(b) to have as large a number as possible of drivers ensuring transit shipments, in order to avoid some drivers being accountable for a customs debt they could not support,
(c) to verify the notoriety of the importers, especially when large quantities of goods are regularly imported,
(d) to be particularly cautious when transit shipments concern goods that are subject to high excise rates (cigarettes, alcohol, oil), and that are known to be more fraud sensitive than other items,
(e) when large quantities of goods are imported, to verify that other customs agents also guarantee their transit, so as to divide the possible customs debt with as large a number of customs agents as possible, and
(f) when a driver frequently carries the same goods to check with him that the transit procedure went well and that no irregularity was noticed.
(a) Only haulier companies were acting as acceptable declarants in the transit procedure. In other words, customs agents did not secure customs debts for individual drivers.
(b) Surety bonds were issued only on the basis of the guarantee contract between haulier, company and the customs agent.
(c) The drivers were required to sign a declaration obliging them to return the TCP Part 5 slip to the customs agent.
(d) Customs agents were issuing "black-lists" containing names of hauliers which had transits that were not closed, and those which did not pay their customs debts.
(e) Customs agents issued a list of "sensitive goods". Securing transit of such sensitive goods required signature of the customs agent’s director. Oil products were always considered as "sensitive goods".
(f) It was not usual practice during the relevant period to establish exclusivity between a customs agent and a haulier or driver.
(a) Shipments of goods with special excise tax regime (oil, cigarettes, alcohol) are well known to be more fraud-sensitive than others, especially in the peculiar circumstances of the present case (new border, new customs office, enormous quantities of oil migrating through the Breclav-dálnice border crossing). Contrarily, CARGO guaranteed these shipments as if it was "business as usual" on apples or pears.
(b) Shipments of enormous quantities of oil products were set up by entities which the Claimant acknowledges were unknown, ruled by very young, inexperienced and insolvent persons, Manifestly, CARGO has offered its guarantee to the transit on such shipments without more investigation.
(c) Shipments of these oil products were declared by the drivers, i.e. natural persons with limited financial resources, mostly in their own name. Given the risk of such declarants’ insolvency, CARGO should obviously have been more vigilant towards them as opposed to institutional clients. Additionally, these shipments were performed by a limited number of drivers (approximately 60), some of them performing up to 75 shipments each. Yet, CARGO accepted to guarantee these drivers in full knowledge that they would not be capable of supporting the customs debts in case something went wrong.
(d) Parts 5 TCPs of all fraudulent shipments were actually stamped by only two stamps (the stamp of [REDACTED] (No. 1366.21) and the stamp of [REDACTED] (No. 1373.12). This very unusual situation did not attract CARGO’s attention. It later happened that these stamps were proved to be forgeries,
(e) CARGO often issued surety bonds to drivers/hauliers before it received the bottom part 5 of TCPs related to previous shipments performed by the same driver/hauiier. For instance. CARGO issued 69 surety bonds to Cetrans after 9 August 1994 although it never received the bottom part 5 TCP of the transit procedure opened by Cetrans on 9 August 1994. The same situation occurred with [REDACTED] (29 shipments after 2 November 1994) and Transpolar Hope (27 shipments after 23 November 1994).
(f) CARGO did not verify the notoriety of the consignees - especially [REDACTED] and his company Horex, although they all of a sudden started to import a very large number of tank trucks. It later appeared that [REDACTED] was notoriously insolvent.
(g) Transit always ended in the same surprising way, namely the drivers were asked to stay outside the importers’ premises and never met any customs officer at the end of the transit, as the drivers have repeatedly declared during the criminal proceedings. The Claimant has never provided a piece of evidence nor any declaration that the drivers had informed CARGO of this very astonishing situation. This means either that CARGO did not especially enquire with the drivers about the way the transit terminated, or that CARGO knew that something unusual was afoot. In both cases, it is not for the Czech Republic to suffer the consequences of such behaviour.
(h) The bottom parts 5 of TCPs were not delivered to CARGO by the declarants but by two CWA employees (Mr. [REDACTED] and Mr. [REDACTED]), even though the drivers were doing their more or less regular shuttles. This should have been an indication for CARGO that the drivers did not fulfil their obligations within the transit regime.
(a) Section 3(2)(a) of the Customs Act, Section, 2(e) of the Act on Excise Taxes and Section 2(2)(i) of the Act on VAT entrusted the customs authorities with the function of tax administrator in respect of excise taxes and VAT payable upon imports of goods.
(b) "Import" is defined in both the Act of Excise Taxes (where it only designates the release of goods. into free circulation or active treatment contact in return system) and the Act on VAT (where it designates the release of goods into free circulation regime, active treatment..contract regime in return system, temporary use and goods imported baçk into free circulation from the passive treatment contact regime).
(c) In the present case, since the payment assessments occurred in relation to a customs debt which had arisen in accordance with Section 24.0 of the Czech Customs. Act the custóms debt did not arise upon The release. into the free circulation regime or any other regime-constituting "import" and since customs bodies were the administrators of excise taxes and VAT only in connection with imports, the Breclav-dalnice Customs Office wag not the administrator of such. taxes, i.e. it was, not materially competent to assess and collect such taxes.
(d) Due to the lack of material competence of the Breclav-dálnice Customs Office the administrative acts issued in relation to payment assessments in this case are void and not binding.
(a) not to deprive the investor of its investment [Article 4(2)],
(b) to treat investments fairly and equitably [Article 2(1)],
(c) not to impair tire enjoyment of investments by arbitrary or discriminatory measures [Articles 2(2), 3(1) and 3 (2)],
(d) to provide investments with full protection and security [Articles 2(3) and 4(1)], and
(e) to ensure treatment of investments that complies with the standard of international law [Article 7(1)].
(a) CARGO was never deprived of judicial recourse before Czech courts in order to object to the enforcement of its guarantee undertakings. To the contrary, CARGO seized Czech courts in order to challenge the decisions taken by the Breclav-dálnice Customs Office ordering CARGO to pay the customs debt due by the drivers by virtue of CARGO’s guarantee undertakings. Furthermore, it cannot be seriously sustained that the outcome of these proceedings and the way in which they were undertaken were inequitable. If a limited number of decisions taken by the Breclav-dálnice Customs Office were set aside because they were based on legal provisions that were then inapplicable, new decisions were subsequently adopted in accordance with the relevant provisions and submitted to CARGO which still had the opportunity to challenge them on other grounds.
(b) Finally two principles of international law are important. The first one is that the standard of due process and procedural fairness applicable in administrative proceedings is not the same as in a judicial process. Hence, even if one were to see administrative irregularities in the decision taken by the Breclav-dálnice Customs Office (which is not the case), it would not reach a sufficient level of gravity to breach the fair and equitable treatment rule. The second one is that acts that would amount to a breach of the minimum standard of treatment under customary international law are only those that constitute a gross denial of justice or manifest arbitrariness falling below acceptable international standards.
(a) CARGO and CWA were not in comparable situations as they were performing very different functions in the Diesel case, In its capacity as customs agent, CARGO had very specific duties which cannot be compared with those carried out by CWA and other entities involved in the tax fraud scheme, such as the consignees
(b) More generally CARGO cannot deemed to have been placed in a situation comparable to that of any other economic operator in the Czech Republic. CARGO was the only customs agent involved in the Diesel tax fraud scheme. It could therefore not have been discriminated against in the absence of any other investor placed in the same circumstances.
(c) The Claimant's statement according to which CARGO was. treated less fayourably than CWA is simply not true since the Respondent. took all measures‚ it had at its disposal against CWA in order to collect the amounts of unpaid excise taxes and VAT.
The present arbitration is based on the bilateral Treaty between the Federal Republic of Germany and the Czech and Slovak Federal Republic concerning the encouragement and reciprocal protection of investments, here called the BIT. The question that the Arbitral Tribunal is called upon to answer is whether the Respondent, i.e. the Czech Republic, as one of the two successor states of the Czech and Slovak Federal Republic, has violated its obligations under the BIT in regard to the Claimant’s investment in the Czech Republic.
(a) the obligation to accord investments a fair and equitable treatment [Article 2(1)],
(b) the obligation not to impair investments by arbitrary or discriminatory measures [Articles 2(2), 3(1) and 3 (2)],
(c) the obligation to give investments full protection and security [Articles 2(3) and 4(1)],
(d) the obligation not to deprive investors of their investments [Article 4 (2)], and
(e) the obligation to treat investments at least as favourably as required by international law I Article 7(I)].
The BIT is an international treaty and should be interpreted in accordance with the principies of international treaty law, as codified in the Geneva Convention on the Law of Treaties. The Arbitral Tribunal derives its competence exclusively from the BIT and is not competent to decide how Czech law is to be interpreted, this being a matter for the Czech courts. Consequently, the Tribunal cannot review the interpretation of domestic law in Czech court decisions. Nor can the Tribunal express an opinion on the interpretation of Czech law on matters which have not been decided by Czech courts.
As a general rule, the Claimant has the burden of proof in respect of the facts which are alleged to violate the BIT. Moreover, it is also incumbent on the Claimant to be specific in regard to his allegations. The obligations in the BIT are defined in general terms, such as fair and equitable treatment, arbitrary or discriminatory measures and full protection and security, and the Claimant should indicate which particular acts or omissions, or which specific domestic laws or regulations, he considers to have violated the Claimant's rights under the BIT. In so far as this has not been sufficiently specified by the Claimant, the Tribunal may find it appropriate, having regard also to the Respondent’s right of defence, to limit its examination accordingly.
The Claimant’s company CARGO was held liable, as guarantor for payments of excise taxes and VAT on oil products transported in 1994 and 1995 from Slovakia to the Czech Repulic. He objects to such liability on the ground that, in his view goods imported at that time from Slovakia were not subject to excise taxes and value added tax (VAT) in the Czech Republic. He relies in this respect on the definition ofthe term "customs debt’’ in the Czech Customs Act. In Section 2 of the Act, "customs debt’ was defined as the obligation of a person to pay the amount of the import duties (customs, debt on importation) or export duties (customs debt on exportation)". However, as a result of the customs union between-the Czech and Slovak Republics, there were no customs dutíes on imports into the Czech Republic of goods coming from Slovakia. Consequently, the Claimant considers that no customs debt could arise in the present case which concerned import of oil products from Slovakia. In the Claimant’s opinion, this would have the further consequence that there could`be no excise tax or VAT on such goods, since in the Excise Taxes Act and the VAT Act the duty to pay taxes arose on the day a customs debt occurred.