66
Opinion of the Court
Conventions thus disallow only those taxes imposed based on the act of importation itself. In contrast, Itel's interpretation would bar all taxes on containers covered by the Conventions, because each covered container is, by definition, in the United States as a result of its temporary importation. This reading makes superfluous the Conventions' qualifying language that the only taxes proscribed are those "collected on, or in connexion with, the importation of goods" and those "chargeable by reason of importation." 1972 Container Convention, Art. 1; 1956 Container Convention, Art. 1.
In an attempt to counteract the interpretation that the Conventions prohibit only those taxes based on the importation of containers, Itel asserts that the consistent practice of other signatory nations and a prior interpretation of the 1956 Convention by the United States prove that signatory nations read the Conventions to proscribe all taxes on containers within their borders. See Factor v. Laubenheimer, 290 U. S. 276, 294-295 (1933). Itel, however, overstates the probative value of these actions.
As evidence that other signatory nations free cargo containers of all domestic taxation, Itel places primary reliance on the Economic Community Sixth Directive and the United Kingdom Value Added Tax (VAT), as illuminated in an amicus brief filed by the United Kingdom. Brief for United Kingdom of Great Britain and Northern Ireland as Amicus Curiae 7-9. Under the European VAT system, no direct tax, be it a VAT, sales, or use tax, is imposed on the value of international container leases. See Sixth Council Directive of May 17, 1977, Arts. 14(1)(i) and 15(13), reprinted in CCH Common Mkt. Rep. ¶¶ 3165P and 3165Q.
The value of international container leases, however, is included in the cost of transporting goods, which in turn is added to the value of the goods when calculating VAT tax liability. Itel admits this is tantamount to an indirect tax on the value of international container leases, but claims the distinction between an indirect tax (paid by the consumer of
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