Report for the Hearing delivered in Joined Cases C-153/88 to C-157/88

I — Facts and procedure in the main proceedings

1. In the five cases which are the subject of these proceedings, the main proceedings, between the customs authorities and certain traders, are concerned essentially with the question whether or not account should be taken, in calculating the weight which determines the import quota and customs duties on importation, of the accessories which normally accompany the textile part of a camping tent, namely, the poles, pegs, ropes or other accessories.

2. On 23 October and 18 November 1986, the French customs authorities summoned several importers to appear before the tribunal correctionnel (Criminal Court), Nanterre, charged with the offence of making false declarations or engaging in fraudulent practices in respect of imports. The alleged offence related to imports of camping tents originating in South Korea carried out in 1983, the effect of which was to evade restrictive measures and payment of customs duties, value-added tax and other taxes.

3. At the material time, imports of such products were governed, on the one hand, by Council Regulation (EEC) No 3589/82 of 23 December 1982 on common rules for imports of certain textile products originating in third countries (Official Journal 1982, L 374, p. 106), as amended by Council Regulation (EEC) No 3762/83 of 19 December 1983 (Official Journal 1983, L 380, p. 1) and, on the other, by Council Regulation (EEC) No 3378/82 of 8 December 1982 (Official Journal 1982, L 363, p. 92) applying generalized tariff preferences for 1983 to textile products originating in developing countries.

4. Regulation No 3589/82 provides, inter alia, in regard to imports of the products at issue into the Community for quantitative limits for each supplier country, expressed in terms of weight, and Regulation No 3378/82, provides, inter alia, in regard to the same products, for the total suspension of customs duties within the framework of the Community tariff ceilings, also expressed in terms of weight.

5. Since, in such cases, the quantities laid down were divided into national quotas among the Member States, Regulation No 3589/82 sets up a double checking system to ensure compliance with the quantitative limits. On the one hand, the competent authorities of the supplier countries are to issue export licences in respect of all consignments of textile products subject to the quantitative limits established and, on the other, the authorities of the Member State designated on the export licence as the country of destination of the goods concerned are to issue an import licence automatically within a maximum of five working days of the presentation by the importer of the original of the corresponding export licence.

6. When the quantitative limit is reached, the supplier country is to issue no further licences and no further imports are thus possible. Furthermore, Article 10 of Regulation No 3378/82 provides that imports are to be charged against the national shares and Community ceilings as and when they are entered for free circulation and accompanied by a certificate of origin. Suitable machinery is provided for the reintroduction of the levying of normal customs duties as soon as possible once the ceiling is reached. Above the ceiling, ‘normal’ imports are possible only within the quantitative limits laid down generally each year.

7. The quantitative limits and ceilings in regard inter alia to camping tents, are expressed in terms of weight (tonnes) and, consequently, if the accessories which normally accompany the textile part of the tent, namely, the poles, pegs, ropes or other accessories, were included in the calculation of the weight, the quantitative limits and ceilings would be very rapidly reached. In the first case, no excess could be accepted and in the second, any excess would have to be imported at the normal rate of customs duty.

8. By judgment of 25 June 1987, the tribunal correctionnel de Nanterre decided to stay the proceedings in Cases C-153/88 to C-157/88 and to refer a question to the Court of Justice for a preliminary ruling on the interpretation of the Community regulations, in particular Council Regulation (EEC) No 2894/79 of 10 December 1979 (Official Journal L 332, p. 1), and Nos 3589/82 and 3762/83, cited above, in order to ascertain whether, for the determination of the import quota, account should be taken of the weight of the textile material or the total weight including tent poles and tent pegs. On 2 July 1987, the direction nationale des enquêtes douanières, the civil plaintiff, lodged an appeal against that judgment before the Eighth Chamber of the cour d'appel de Versailles, which, in an interlocutory judgment in Case 154/88 Shin, asked the Court, in addition to the question already referred to it by the tribunal correctionnel de Nanterre, ‘whether, for the determination of customs duties payable on the import of tents originating in Korea, account should be taken only of the weight of the textile material or the total weight of the textile material together with the accessories’.

9. The judgments making the reference were received at the Court Registry on 3 October 1988.

10. Pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the European Communities, written observations were submitted by the defendant in the main proceedings, Kühne et Nagel, represented by Mireille Famchon, avocat with the right of audience before the cour d'appel, the French Government, represented by Edwige Belliard, acting as Agent, and by the Commission of the European Communities, represented by Guido Berardis, acting as Agent.

11. By order of 23 November 1988, the Court decided to join Cases C-153/88, C-154/88, C-155/88, C-156/88 and C-157/88 for the purposes of the written and oral procedure and the judgment.

12. After hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry and to assign the cases to the Fourth Chamber.

II — Written observations submitted to the Court

1. Kühne et Nagel, the defendant in the main proceedings, draws attention to the import formalities which it completed and indicated that the actual form of the declaration that goods are to be placed on the market does not make it possible to draw a distinction between the total net weight of the goods and the weight of the textile fabric subject to the quota. It deduces from the legislation in question that the references concerned relate only to textile products and states that, in order to simplify import transactions, a single declaration may be made, the heading ‘tent’ applying by extension to the various accessories. It points out that the weight covered by the import licences or declarations is that of the fabric and not of the fabric and accessories together. If that were not the case, tent pegs, made of relatively heavy materials, and which are totally outside the scope of the Multifibre Arrangement, would be charged to the Korean textile quota. That quota necessarily excludes all accessories made of other materials even if, for reasons of convenience, the rules of the Brussels Nomenclature imply that a single declaration should be made for the tent and its accessories. According to Kühne et Nagel, to decide otherwise would give rise to discrimination between consignments of complete tents, in regard to which the weight of the accessories would be charged to the textile quota, and consignments in which the textile products and the accessories and other materials were put up separately and which therefore would not give rise to the same difficulties, an absurd result from an economic point of view. It is therefore logical that the weight covered by the import licences and declarations should be the weight of the textile fabric and not of the tent with its accessories. Moreover, it considers that the corollary of the quota considered above is a privileged position in regard to tariffs in the form of an exemption from customs duties. It is correct that if the tent and its accessories had been cleared separately through customs, the said poles and accessories would have attracted customs duty on a value which was in fact marginal and it was thus in accordance with the spirit of the rules to declare the tents and poles together and obtain the benefit of the exemption from duty in respect of all of them. Kühne et Nagel also observes that Regulation No 3762/83 resolved the problem in practical terms by mentioning in one of its annexes ‘the equivalence in pieces of quantitative limits indicated in the annex’. It considers that to say that the weight has an equivalence in pieces amounts to an express statement that the accessories are to be regarded as marginal and, for that reason, included in the exemption. Kühne et Nagel propose that the Court should answer the question referred to it as follows:

‘(1) Account should be taken only of the weight of the textile part of the tent in determining the import quota.

2) In determining the amount of the customs duties, account should also be taken only of the weight of the tent, without the accessories.’

2. The French Government considers that account should be taken of the fabric and the accessories in determining the import quota (in tonnes) for tent fabric originating in and coming from Korea and other nonmember countries. That interpretation is confirmed, in the first place, by an explanatory note issued by the Customs Cooperation Council in February 1971. Such a classification also complies with the general rules for the interpretation of the Tariff Nomenclature annexed to the Convention on Nomenclature for the Classification of Goods in Customs Tariffs, on which the Common Customs Tariff is based. According to the French Government, it appears first from settled case-law of the Court of Justice that ‘the Explanatory Notes drawn up by the Customs Cooperation Council are, in the absence of specific provisions of Community law, an authoritative source for interpreting the headings to the Common Customs Tariff’ (judgment of 4 October 1979 in Case 11/79 Cletoti v Inspecteur der Invoerrechten en Accijnzen [1979] ECR 3069). It points out that an explanatory note issued by the Customs Cooperation Council in February 1971 stated, in regard to Heading 62.04 that: ‘Tents are made of fairly thick or, in some cases, of lightweight canvas ... they may have double roofs, and may be imported complete with tent poles, tent pegs, guy ropes or other accessories.’ In those circumstances, the French Government considers that it clearly follows from the Customs Cooperation Council's explanatory note that not merely the fabric of tents but also the accessories (ground sheets, tent pegs, tent poles, packing ... ) should be classified under Heading 62.04. Since, in this particular case, no note to a section or chapter refers specifically to tents, Heading 62.04 should be interpreted on the basis of the general rules for the interpretation of the tariff nomenclature. The French Government considers that the classification of tents and their accessories under Heading 62.04 complies with the rules of interpretation laid down in the Convention on Nomenclature for the Classification of Goods in Customs Tariffs. In conclusion, the French Government proposes that the reply to the question referred to the Court by the cour d'appel, Versailles, should be that in determining the import quota (in tonnes) of tent fabric originating in and coming from the Republic of Korea, account should be taken of the weight of the fabric and its accessories.

3. The Commission considers, with regard to the Community legislation in question, that the reference in the judgment of the national court to Regulation No 2894/79, cited above, appears to be incorrect if the importations at issue took place in 1983. In any event, the regulations involved are annual measures which are repeated from year to year and the reasoning of principle is not affected, regardless of whether reference is made to one or the other. It considers that the problem raised is one of tariff nomenclature rather than of interpretation of the regulation cited in the judgment of the national court. Those regulations contain no specific provision on the matter. However, their common characteristic is that they determine the products to which they apply by reference to the nomenclature of the Common Customs Tariff and to the Nomenclature of Goods for External Trade Statistics of the Community and Statistics of Trade between Member States (Nimexe), as they existed at the material time. That reference is quite explicitly made in Article 1(2) of Regulation No 3589/82. Consequently, in the absence of any other contrary indication, it must be concluded that, for the purposes of determining the weight of the goods, the decisive element is the tariff classification of those goods. The same is true in regard to Regulation No 3378/82, although the text of the regulation does not contain any direct and explicit reference to the Common Customs Tariff and Nimexe. The reference emerges quite plainly in the annexes to the regulation in regard to the designation of the products to which it applies, since the form in which that designation is made is exactly the same. Moreover, the nomenclatures of the Common Customs Tariff and of Nimexe are, by definition, uniform and apply to all imports, independently of the rules to which they are subject. The central question is the interpretation of the tariff nomenclature applicable to the products at issue at the material time. The Commission considers that the reply to the question whether the classification remains unchanged whether the tent was prescribed with or without accessories should be in the affirmative. Normally, tents are offered for sale with the necessary accessories, namely tent poles, tent pegs, guy ropes and other accessories, and they should therefore be classified on the basis of the material or article which gives them essential character. The factor which determines the essential character varies according to the nature of the goods. It could, for example, follow from the nature of the material of which they are made or the articles which compose them, their volume, their quantity, their weight or their value, or the importance of one of the materials of which they are made for the use of the goods. Having regard to those considerations, it seems clear that in regard to goods consisting of a tent and its accessories, the tent is the most important item and determines the classification of the entire product under subheading 62.04 B II of the Common Customs Tariff. If the tent was presented for customs clearance without the accessories, it would be classified under the same heading. If the poles, pegs, etc. were presented without the tent, they would be classified under subheading 73.40 B. According to the Commission, that interpretation is confirmed by the Explanatory Notes to the Brussels Nomenclature which, although they have no legal value, none the less constitute guidance for the interpretation of the Common Customs Tariff. Essentially, it considers that in the absence of any contrary indication in the regulations at issue and by virtue of the direct reference made therein to the nomenclatures of the Common Customs Tariff and Nimexe, the determination of the weight of camping tents for the purpose of verifying the quantitative limits and tariff preference ceilings laid down must be carried out by including the tent poles and tent pegs. It points out that the Community negotiated and concluded the agreements on trade in textile products on the basis of earlier statistics, themselves based on the Nimexe nomenclature, which is in its turn derived from the nomenclature of the Common Customs Tariff. The Commission considers that having regard to the abovementioned interpretation of the nomenclature and the fact that it would be abnormal to present tents without their accessories, the negotiations themselves must have taken place on the basis of that interpretation. The Commission proposes that the Court should reply as follows to the question referred to it:

‘For the determination of the import quota and the tariff preference ceilings for camping tents coming under subheading 62.04 B II of the common customs tariff, referred to in Council Regulations Nos 3589/82 and 3378/82, respectively, the weight to be taken into account is the total weight of the tents, including accessories.’

III — Oral Procedure

Daewoo SARL, which did not submit written observations in this case, was represented at the hearing on 10 October 1989 by M. Menant and argued essentially that account should be taken only of the weight of the textile part of the tent which determines the import quota and customs duties on importation.

In that regard, it points out that the permit and the export declaration supplied by the Korean authorities were drawn up solely on the basis of the quota available under the Multifibre Arrangement. It points out that account was taken of the textile part of the tent and not of the accessories such as pegs, poles, ropes or other items which represent nearly one third of the weight of a tent.

M. Diez de Velasco

Judge-Rapporteur

1 Language of che case: French.