CJEC, November 19, 1975, No 38-75

1 By decision of 11 June 1974, received at the Court registry on 16 April 1975, the tariefcommissie referred to the Court of justice under article 177 of the EEC treaty three questions concerning the validity of an additional note incorporated in chapter 90 of the common customs tariff (hereinafter referred to as 'the CCT ') pursuant to regulation (EEC) No 1-71 of the council of 17 December 1970 amending, with effect from 1 January 1971, regulation (EEC) No 950-68 on the common customs tariff (oj l 1 of 1. 1. 1971 p.335).

2 The note provides as follows: 'apparatus for the automatic reproduction of documents by means of static electricity, equipped with an optical picture-recording system, is also classified under subdivision a (photographic cameras) of heading 90.07 '.

3 Pursuant to this provision, the Netherlands customs authorities charged duty at 14 per cent, on the importation on 28 April 1971 from a third country of a xerographic duplicating machine - apparatus of a type which answers to the description given in the additional note.

4 The plaintiff in the main action contests the decision of the authorities on the ground that the product in question ought to have been classified under sub-heading 84.54 b (other office machines) and to have been charged to the 7.2 per cent duty under the general agreement on tariffs and trade (GATT).

5 The plaintiff relies mainly on the decisions of the tariefcommissie of 2 February 1970 concerning goods imported into the Netherlands before the entry into force on 1 July 1968 of the CCT, which, interpreting the Benelux customs tariff previously in force in the Netherlands, classified the type of apparatus in question under subheading 84.54 b.

6 As a result of these decisions and despite the entry into force meanwhile of the CCT, the Netherlands customs authorities, in view of the identical wording of the headings concerned in the CCT and in the Benelux tariff, continued to classify these goods under subheading 84.54 b and to charge duty at 7.2 per cent until the entry into force on 1 January 1971 of regulation No 1-71 of the council amending the CCT and containing the additional note in question, as a result of which they applid heading 90.07 a and duty at 14 per cent.

First question

7 In its first question the tariefcommissie asks whether it is legal to classify under subheading 90.07 a apparatus which, in its view, comes under subheading 84.54 b by a regulation of the council by means of an additional note to chapter 90 without a corresponding amendment of the wording of heading 90.07.

8 Under article 28 of the treaty, any autonomous alteration or suspension of duties in the common customs tariff is to be decided by the council.

9 In the version in force at the time when the importation in question took place, section i a of part i of the CCT provides, in the rules for the interpretation of the nomenclature, that for legal purposes the classification of the headings is to be determined according to the terms of the headings and any relative section or chapter notes.

10 The additional note in dispute, decided upon by the council, becomes part of the heading to which it refers and has the same binding effect whether it constitutes an authentic interpretation of the heading or supplements it.

11 It is, accordingly, not possible to impugn this method of legislation which is, moreover, current practice in this field and was provided for under regulation (EEC) No 97-69 of the council of 16 January 1969 on measures to be taken for uniform application of the CCT (oj English special edition 1969 (i), p.12).

12 Thus, the contested note in itself constitutes either an interpretation which does not call for amendment of the wording of the heading concerned or, if need be, a legitimate supplement to the wording which is thereby adapted to meet the new situation.

Second question

13 The second question is as follows:

In the light of the fact that on the basis of articles 60 and 65 of the constitution of the kingdom of the Netherlands agreements with other powers and with organizations in international law have legally binding force after they have come into existence in the prescribed manner and have been published, further in the light of the fact that the GATT treaty, to which the Netherlands are a party, constitutes such an agreement and finally in the light of the fact that the aforementioned heading 84.54 together with the duty attaching thereto, was bound on the occasion of the so-called Kennedy round within the framework of GATT, is permissible contrary to the aforementioned binding and without any provision being made in relation to the Netherlands, for a higher duty to be charged in respect of the goods falling within this heading by classifying this product under another chapter and another heading by means of a regulation of the council of the EEC?

In the light of the priority of the treaty obligations of the community over acts of its organs and - independently of the question whether a GATT provision is or is not suited to create rights in relation to the citizen upon which he can rely before a Court - is not a Netherlands Court bound in cases which are submitted to it to apply GATT provisions which are suitable for direct application even though it may thereby come into conflict with community law?

14 With effect from 1 July 1968 and, moreover, in accordance with article xxiv of GATT, the CCT replaced the national customs tariffs of the member states and, subject to review by the Courts responsible for applying and interpreting community law, in particular on questions raised under article 177 of the treaty, the community authorities alone have jurisdiction to interpret and determine the legal effect of the headings which it comprises.

15 Whatever may have been the mandatory force under a national legal system of an interpretation placed up on a heading of a national customs tariff, or of one which was common only to some member states, by the competent authority of a member state before 1 July 1968, and even if the wording of the heading in the CCT has remained the same, that interpretation cannot as such hold good under the community legal system, which is applicable throughout the member states.

16 Similarly, since so far as fulfilment of the commitments provided for by GATT is concerned, the community has replaced the member states, the mandatory effect, in law, of these commitments must be determined by reference to the relevant provisions in the community legal system and not to those which gave them their previous force under the national legal systems.

17 Furthermore, the additional note in dispute is wholly consistent with a classification opinion expressed in 1962 and maintained until 1 January 1972 by the customs co-operation council and, again, with the most common practice in the states which are signatories of GATT and, more particularly, in all the member states of the community except the netherlands.

18 The tariff concessions and bindings achieved under GATT were negotiated before 1 July 1968 by the community authorities pursuant to article 111 of the treaty and related to the CCT which entered into force on 1 July 1968.

19 Accordingly, these concessions and bindings covered headings 84.54 and 90.07, as interpreted and applied in accordance with the opinion of the customs cooperation council, which means that, in maintaining these interpretations and applications after 1 July 1968, the community authorities have not, in any sense, unilaterally increased a duty bound under GATT.

Third question

20 The third question asks whether the additional note infringes the obligations arising from the convention of 15 December 1950 on nomenclature for the classification of goods in customs tariffs, in particular article ii (b) (ii), containing a provision prohibiting the amendment of the notes to the chapters and sections in such a way as to change the purport of the chapters, sections and headings in the nomenclature.

21 Just as, in the case of commitments arising from GATT, the community has replaced the member states in commitments arising from the convention of 15 December 1950 on nomenclature for the classification of goods in customs tariffs and from the convention of the same date establishing a customs cooperation council, and is bound by the said commitments.

22 Among the commitments embodied in the first of these conventions is to be found, under article ii (b) (ii) the obligation of each contracting party that 'it will make No changes in the chapter or section notes in a manner modifying the scope of the chapters, sections and headings as laid down in the nomenclature '.

23 It has already been established that, in including apparatus for the automatic reproduction of documents by means of static electricity equipped with an optical picture-recording system in subdivision a of heading 90.07, the additional note in dispute accorded with a classification opinion of the customs cooperation council and with the general practice of states which were signatories of the convention of 15 December 1950.

24 It is true that these classification opinions do not bind the contracting parties but they have a bearing on interpretation which is all the more decisive because they emanate from an authority entrusted by the contracting parties with ensuring uniformity in the interpretation and application of the nomenclature.

25 When, furthermore, such an interpretation reflects the general practice followed by the contracting states, it can be set aside only if it appears incompatible with the wording of the heading concerned or goes manifestly beyond the discretion conferred on the customs cooperation council.

26 In view of the degree of similarity, recognized by the Court making the reference, between photographic processes and xerographic picture-recording processes, the conditions under which a classification opinion must be rejected as incompatible with the heading in question are not present, as far as its application under the community legal system is concerned.

27 It follows from the foregoing that consideration of the file has not disclosed any factors of such a nature as to affect the validity of the additional note to chapter 90 of section xviii of the common customs tariff as amended by regulation No 1-71 of the council of 17 December 1970.

28 The costs incurred by the council and the Commission of the European Communities, which submitted observations to the Court, are not recoverable.

29 As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national Court, the decision on costs is a matter for that Court.

The Court

In answer to the questions referred to it by the tariefcommissie by decision of 11 June 1974 hereby rules:

Consideration of the questions raised has not disclosed any factors of such a nature as to affect the validity of the additional note to chapter 90 of section xviii of the common customs tariff as amended by regulation No 1-71 of the council of 17 December 1970.