Returned Goods Relief: CJEU Sets the Record Straight
- Madni Laghari
- Jul 21
- 5 min read
EU’s top court clarifies that good faith, not perfection, is what matters for Returned Goods Relief—no more confusing negligence with deception.
The world of Customs Compliance never stops evolving, and last week, the Court of Justice of the European Union (CJEU) handed down a ruling every EU customs professional, importer, and customs consultant needs to understand. If you handle goods returning to the EU—especially under Returned Goods Relief (RGR)—this case could mean the difference between costly import VAT and a fair exemption. For those navigating the maze of EU Import Regulations, it’s a decision that cuts through years of uncertainty and sets a new standard for authorities. Let’s break down what you need to know and what it means for trade compliance across the EU.
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Key Questions Covered in This Blog
What is Returned Goods Relief (RGR) and why is it important for EU trade compliance?
How did the CJEU clarify the difference between “negligence” and “attempt at deception” in customs cases?
What are the practical implications of the ruling for customs professionals and importers?
How should national authorities apply Article 86(6) UCC after this judgment?
What’s the best approach for importers and exporters dealing with unintentional non-compliance?
Abbreviations Used In This Blog
RGR: Returned Goods Relief
UCC: Union Customs Code
VAT: Value Added Tax
CJEU: Court of Justice of the European Union
“The new CJEU ruling confirms that honest mistakes should not cost businesses their VAT exemption—provided there’s no bad faith. This is a win for practical, fair trade compliance across the EU.” Arne Mielken, Managing Director, Customs Manager |
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What is Returned Goods Relief (RGR) and why is it important for EU trade compliance?
Returned Goods Relief is a vital customs relief in the EU, offering exemption from import duties and VAT when goods previously exported are re-imported. For customs professionals and compliance officers, RGR can mean significant savings—but only if you follow the rules. Traditionally, the slightest misstep—like forgetting to present goods on arrival—risked triggering a customs debt and losing VAT exemption. In today’s competitive global market, the margin between profit and loss often rests on these details. That’s why this new ruling matters so much for anyone responsible for import regulations in the EU.
How did the CJEU clarify the difference between “negligence” and “attempt at deception” in customs cases?
This is the real game-changer. For years, national customs authorities have often treated any procedural mistake, even minor ones, as grounds for denying RGR—arguing that “negligence” equals “deception.” But the CJEU has now drawn a clear line: negligence is not the same as an “attempt at deception.” The latter requires bad faith—a deliberate intent to deceive. Forgetting a formal step is not the same as trying to cheat the system. The court’s recognition of this difference echoes what compliance professionals have argued for years: honest mistakes deserve a fair chance at relief. The emotional relief across the trade compliance community is tangible—finally, the law recognizes the realities of complex global trade.
What are the practical implications of the ruling for customs professionals and importers?
Here’s the good news: the court confirmed that as long as you meet the substantive conditions for RGR, you may still be eligible for relief—even if you slip up on some formal requirements. For example, in the case at hand, a Swedish importer failed to present racehorses to customs on re-import, and authorities denied RGR. The court ruled that this formal slip, without evidence of deception, should not block the relief. This new standard gives businesses and customs consultants room to correct honest errors without facing the full penalty of import VAT. It’s a clear sign that the EU wants a proportionate approach—punishing bad actors, not honest traders.
How should national authorities apply Article 86(6) UCC after this judgment?
National authorities must now stop conflating honest mistakes with fraud. Article 86(6) UCC allows relief if the failure is not an attempt at deception. The CJEU’s judgment directly addresses how this should be interpreted: the burden of proof for deception is high, and authorities cannot simply presume bad faith from a technical error. Authorities must assess whether the intent behind non-compliance was fraudulent. This decision should promote more consistent, fair application of customs reliefs across the EU, benefiting compliance officers and importers who act in good faith.
What’s the best approach for importers and exporters dealing with unintentional non-compliance?
First, keep meticulous records and demonstrate your good faith at every stage of the customs process. If you make a mistake, act fast: explain, correct, and document everything. If relief is denied, reference this CJEU ruling in your appeal. Use the template letter available in our premium resources to build your case. And most importantly, stay informed—customs regulations are evolving fast, and proactive compliance is your best defense. If in doubt, get advice from a trusted customs consultant—sometimes one call can save thousands in unnecessary taxes.
Arne’s Takeaway
The CJEU’s landmark ruling on RGR sends a clear message: EU trade compliance is about substance, not perfection. Negligence is not deception. If you act in good faith and meet the core requirements, the law is now on your side. Let’s use this opportunity to build a more trusted, efficient, and fair trading environment in the EU.
Expert Recommendations
Review your RGR processes: Ensure your team understands the difference between formal and substantive conditions.
Train staff: Regular compliance training can prevent costly mistakes.
Engage early with authorities: If you slip up, transparency is key.
Stay informed: Subscribe to our updates for future rulings and compliance tips.
Sources & Further Information
Disclaimer
This blog is for educational purposes only. Always consult a qualified customs consultant or legal professional for tailored advice.
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