Report for the Hearing delivered in Case 232/86

I — Legislatíve background

1. The dispute before the Finanrgericht relates to the grant of customs exemption for a scientific instrument imported into the Community. Its legal basis is Regulation No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975, L 184, p. 1), as amended by Council Regulation No 1027/79 of 8 May 1979 (Official Journal 1979, L 134, p. 1), and by Commission Regulation No 2784/79 of 12 December 1979 laying down provisions for the implementation of Council Regulation No 1798/75 (Official Journal 1979, L 318, p. 32).

2. Those regulations are intended to ensure the implementation by the Community of the Florence Agreement drawn up under the auspices of Unesco. By Article 1 of that agreement, which entered into force in 1952: Annex D to the agreement covers, with certain provisos, ‘scientific instruments or apparatus, intended exclusively for educational purposes or pure scientific research’.

‘The contracting States undertake not to apply customs duties or other charges on, or in connection with, the importation of:

...

b) ... scientific ... materials, listed in annexes... D ...’

3. Under the terms of Article 3 (1) (b) of Regulation No 1798/75, duty-free admission may be granted only where instruments or apparatus of equivalent scientific value are not being manufactured in the Community. Article 5 (2) of Regulation No 2784/79 provides that only technical characteristics may be regarded as essential for the purpose of determining ‘equivalent, scientific value’. It provides expressly that account may not be taken of the ‘fact that an instrument or apparatus is able to achieve performances superior to those which are necessary for a proper execution of the specific work to be carried out’.

4. According to Article 7 (1) of Regulation No 2784/79, the competent national authority is to take a direct decision on requests for duty-free admission in all cases where the information at its disposal, if necessary after consultation with the trade circles concerned, enables it to assess: (a) whether or not the instrument or apparatus is scientific, and (b) whether or not there exist instruments or apparatus of equivalent scientific value which are currently manufactured in the Community. In all other cases, the request for duty-free admission must be forwarded to the Commission, which then seeks the opinion of the Member States and, if there is an objection, refers the matter to a group of experts for examination.

II — Facts and procedure before the Finanzgericht

1. The parties are in dispute as to whether a measuring instrument imported from the United States of America is eligible for duty-free admission or whether duty-free admission is precluded by the fact that an instrument originating in the Community of equivalent scientific value but with a performance in excess of actual needs was available. It is not in dispute that the imported apparatus is a scientific instrument within the meaning of Regulation No 1798/75.

2. Nicolet Instrument GmbH, the plaintiff in the main proceedings (hereinafter referred to as ‘Nicolet’), imported the instrument, a Fourier-Transform infrared spectrometer system model MX-1 E with accessories, from the United States of America and sold it to the Robert Koch Institute of the Bundesgesundheitsamt (Federal Health Board) in West Berlin. The purchaser stated on the relevant form that: ‘Fourier-Transform spectrometers are not produced by German manufacturers. The same applies to other manufacturers in the EEC’.

3. It is common ground that the instrument is required for a research group which intended to use it, in the words of an expert witness heard in the course of the preparatory inquiry by the Finanzgericht, for the ‘examination of bacterial cell walls under the influence of antibiotics and chemotherapy, examination of intact bacteria for the purposes of their description and identification, and the examination of the membranes of such bacteria from the medical standpoint’.

4. The Hauptzollamt Berlin-Packhof, the defendant in the main proceedings (hereinafter referred to as ‘the Hauptzollamt’), refused exemption from customs duties by a decision dated 23 February 1982, inter alia on the ground that the IFS 110 and IFS 85 models produced by Bruker Analytische Meßtechnik GmbH in the Federal Republic of Germany were instruments of equivalent scientific value.

5. The aforementioned expert witness confirmed that the research project could have been carried out using one of the two German instruments. For the purposes of the project, however, a resolution of two to four units was necessary while the resolution of 0.2 possessed by the IFS 110 model was considerably in excess of those requirements. The resolution of 0.5 offered by the IFS 85 model, which was unknown to the Institute at the material time, came somewhat closer to the requirements of the research group.

6. Nicolet lodged an objection which was unsuccessful, whereupon it instituted the main proceedings before the Finanzgericht. It argued that the German manufacturer Bruker had no instrument of equivalent scientific value on the market until 1982 when it brought out the IFS 45 model. The performance of the instruments available before then was technically disproportionate to the needs of the research project. It claimed that the Finanzgericht should annul the customs decision of 23 February 1982 and the decision on its objection.

7. The Hauptzollamt argued that it was irrelevant whether the instruments manufactured by Bruker were disproportionate to the research requirements because whether or not an instrument was of equivalent scientific value depended solely on whether it could be used to carry out the necessary measurements. It added that Bruker's IFS 85 model, which had a much more modest performance than the IFS 110 model, was already available at the material time and that Nicolet should have been aware of it. It contended that the Finanzgericht should dismiss the action.

8. By an order of 27 June 1986, the Finanzgericht stayed the proceedings and submitted trie following question to the Court: In its order for reference, the Finanzgericht states that it tends to the view that the proportion between means and ends is a criterion of equivalent scientific value despite the wording of Article 5 (2) of Regulation No 2784/79 because it would be contrary to scientific method to solve problems with inappropriate means. In that connection the Finanzgericht notes that the preamble to Regulation No 1798/75 states that its purpose is to facilitate scientific research within the Community.

‘Is an instrument “of equivalent scientific value” within the meaning of Regulation (EEC) No 1798/75 of the Council if, although it may be used in carrying out the intended research, its performance is so disproportionate that on objective consideration it cannot reasonably be considered for use in such research?’

9. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted by Nicolet, the Netherlands Government and the Commission.

10. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to assign the case to the Second Chamber pursuant to Article 95 of the Rules of Procedure and to open the oral procedure without any preparatory inquiry.

III — Written observations

1. Nicolet stresses that the purpose of the EEC rules on exemption from customs duties is to promote and facilitate scientific research, as is shown by the preamble to Regulation No 1798/75. Those rules must serve to promote the use of instruments specifically adapted to the needs of the research in question; otherwise they would serve no purpose because in very many cases an instrument with a higher performance is available for which the researcher has no need. It would be contrary to scientific method to solve problems with inappropriate means and to allow the choice of instruments for research to be determined by fiscal advantages. Accordingly the means must always be proportionate to the end.

2. The Netherlands Government states that the definition rules laid down by Regulations Nos 1798/75 and 2784/79, particularly as regards performances superior to those required, must take precedence in determining questions regarding the interpretation of the concept of equivalent scientific value such as that submitted by the Finanzgericht. The Netherlands Government concludes that, for the purposes of duty-free admission, an instrument manufactured in the Community whose potential applications exceed what is required for the research to be carried out is unquestionably scientifically equivalent to an instrument imported from a nonmember country.

3. The Commission makes the preliminary point that in any event it is not certain that the instrument in question can be regarded as a scientific instrument in view of its limited performance. As regards the question submitted for a preliminary ruling, it notes that Article 5 (2) of Regulation No 2784/79 provides expressly that the superior performance of an instrument is not to be taken into account in determining equivalent scientific value. That provision applies in the first place to an imported instrument but is equally applicable to an instrument manufactured in the Community. The application of Regulation No 1798/75 is limited to imported instruments whose use is made indispensable by the fact that the research project in question cannot be carried out using instruments available in the Community. The purpose of the regulation is to promote research in the Member States without unduly disadvantaging Community industry in comparison with foreign competitors. Accordingly there is no obligation, even by virtue of the principle that the means should be proportionate to the end, to promote by means of a customs exemption the importation of less sophisticated instruments manufactured outside the Community in so far as Community industry is able to provide considerably more powerful instruments. A user is perfectly free to choose the Community or non-Community instrument which he considers fit for his purposes but, if he chooses an imported instrument, he must pay the corresponding import duties.

O. Due

Judge-Rapporteur

1 Language of the Case: German.