The Court of Justice of the European Union Judgment in the Hamamatsu Case: Defending EU Customs Valuation Law from the ‘Transfer Pricing Folly’ in Customs Matters

In the last few years there has been a tendency by most of the companies in the European Union and elsewhere to indiscernibly rely on the so-called transfer pricing agreements together with related to them studies, which are tax law matters, also for the determination of the customs value for customs valuation purposes. This practice seems to be highly questionable taking into account the different natures and objectives of tax and customs law. With the Hamamatsu judgment, the Court of Justice of the European Union restores the order in such matter by reaffirming the primacy of pure customs valuation rules and providing for a clear refusal for the automatic application of the transfer pricing agreements to the customs valuation of goods. This judgment is fully in line with previous case law on the nature of the customs valuation rules and objectives. As a result, the Hamamatsu judgment created justified concerns to those companies that have unjustifiably relied on transfer pricing methodologies also to adjust a posteriori the customs value of goods. However, the Court of Justice has done nothing more than reaffirm the obvious. Following the ruling, companies will have to set up a proper customs valuation assessment system, which are separate from the transfer pricing one. Nevertheless, this does not mean that transfer pricing studies are not to be taken into account as ‘context’ for such customs valuation purposes.