Report for the Hearing in Case C-33/92

I — Facts and procedure

1. On 17 March 1989, the Oberfinanzdirektion (Regional Finance Directorate) Hamburg issued a binding customs tariff notice in which it classified meat of bovine animals with a total salt content of 1.2% under subheading 02023090 of the Combined Nomenclature of the Common Customs Tariff as ‘meat of bovine animals, frozen, other’.

2. In a further binding customs tariff notice issued to the plaintiff on 9 May 1989, the Oberfinanzdirektion, which had originally classified meat of bovine animals with a total salt content of 0.71% (internal salt content 0.48%) under subheading 02102090 of the Combined Nomenclature as ‘meat of bovine animals, salted, boneless’, rescinded that decision and classified the product under subheading 02023090 instead.

3. The plaintiff in the main proceedings, Gausepohl-Fleisch GmbH, considers that both products should be classified under subheading 02102090 of the Combined Nomenclature.

4. By two decisions of 3 July 1990, the Oberfinanzdirektion rejected its complaints on the ground that meat could not be regarded as salted for customs tariff purposes unless it had been preserved by the addition of salt, bringing its total salt content to at least 2%.

5. Gausepohl-Fleisch brought an appeal against those decisions before the Bundesfinanzhof.

II — The relevant provisions

6. The Combined Nomenclature of the Common Customs Tariff is established in Annex I to Commission Regulation (EEC) No 2587/91 of 26 July 1991 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1991 L 259, p.1).

7. Paragraph 3 of the general notes to Chapter 2 of the Combined Nomenclature, ‘Meat and edible meat offal’, reads as follows: ‘Guidance on the different states in which meat and offal of this Chapter can occur (fresh, chilled, frozen, salted or in brine, dried or smoked) is given in the HS [harmonized system] General Explanatory Notes to this Chapter. It should be noted that deepfrozen meat and partially or totally de-frozen meat are to be classified in the same way as frozen meat. Moreover, ‘frozen’ covers not only meat which has been frozen when fresh but also meat which has first been slightly dried and then frozen in so far as its actual and lasting preservation depends essentially upon such freezing.’

8. The tariff headings and subheadings of Chapter 2 of that regulation which are relevant for the purposes of the present case are Usted below: — 0201 Meat of bovine animals, fresh or chilled: — 02013000 — Boneless: — 0202 — Meat of bovine animals, frozen: — 02021000 — Carcasses and half-carcasses — 020220 — Other cuts with bone in: — 020230 — Boneless: — 02023010 — — Forequarters, whole or cut into a maximum of five pieces, each quarter being in a single block; ‘compensated’ quarters in two blocks, one of which contains the forequarter, whole or cut into a maximum of five pieces, and the other, the hindquarter, excluding the tenderloin, in one piece — 02023050 — — Crop, chuck and blade and brisket cuts — 02023090 — — Other — 0210 — Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and meals of meat or meat offal: — Meat of swine: — 021011 — — Hams, shoulders and cuts thereof, with bone in: — — — Of domestic swine: — — — Salted or in brine: — 02101111 — — Hams and cuts thereof — 02101119 — — Shoulders and cuts thereof — — — Dried or smoked: — 02101131 — — Hams and cuts thereof — 02101139 — — Shoulders and cuts thereof — 02101190 — Other — 021012 — Bellies (streaky) and cuts thereof: — — — Of domestic swine: — 02101211 — — Salted or in brine — 02101219 — — Dried or smoked — 02101290 — Other — 021020 — Meat of bovine animals: — 02102010 — With bone in — 02102090 — Boneless

9. According to the Explanatory Notes to the Combined Nomenclature of the European Communities, 1989 edition, subheadings 02101111 and 02101119 of the Combined Nomenclature cover only:

‘hams, shoulders and parts thereof, with bone in, of domestic swine, which have been preserved by deep dry salting or pickling in brine. They may, however, have been further subjected to some slight drying or smoking but not to the extent that they are regarded as dried or smoked for the purposes of subheadings 02101131 and 02101139 The percentage salt content necessary to ensure preservation may vary considerably between different types and cuts of meat. Although this method of preservation is normally used as a temporary measure, the period of such preservation must considerably exceed the time required for transportation. Meat merely sprinkled with salt in order to ensure its preservation while being transported remains classified as fresh meat.’

10. According to the Explanatory Notes to the Harmonized Commodity Description and Coding System of the Customs Cooperation Council, Chapter 2 on page 14 (a German translation of which appears in ‘Der Ausgabe des Bundesministeriums der Finanzen: Erläuterungen zur kombinierten Nomenklatur’ 02/2 HS, Rz. 17.0 zu Kapitel 2 ‘Unterscheidung zwischen Fleisch und Schlachtnebenerzeugnisse dieses Kapitels und Waren des Kapitels 16’ published by the Bundesanzeiger Verlag), it is stated that:

‘This Chapter covers meat and offal in the following states only ...:

1) Fresh (that is, in the natural state), including meat and meat offal packed with salt as a temporary preservative during transport.

2) Chilled, that is, reduced in temperature generally to around 0°C, without being frozen.

3) Frozen, that is, cooled to below the product's freezing point until it is frozen throughout.

4) Salted, in brine, dried or smoked.’

11. The Bundesfinanzhof considered that the case raised a problem as to the interpretation of the Community legislation in question and it therefore decided, by order of 22 October 1991, to refer the following questions to the Court under Article 177 of the EEC Treaty:

‘(1) Is the Common Customs Tariff (Combined Nomenclature) to be interpreted as meaning that meat of bovine animals to which a quantity of salt has been added for the purposes of preservation such that the total salt content measured (approximately 0.5%) amounts to more than three times the natural salt content (approximately 0.15%) is to be classified as salted under heading 1210?

2) If not, how high must the salt content be and what other conditions (such as depth of salting or period of preservation as compared with the time required for transportation), if any, must be fulfilled for meat of bovine animals to be classifiable as salted under heading 0210?’

III — Summary of observations submitted to the Bundesfinanzhof

12. In the grounds of the order for reference, the Bundesfinanzhof observes that under the system of Chapter 2 of the Combined Nomenclature, salting must constitute a meat preserving process. It is uncertain as to whether the preservation ensured in the present case (I-2 days) adequately meets the requirements of Combined Nomenclature heading 0210. The other methods of preservation covered by that heading (pickling in brine, drying and smoking) suggest that preservation for a longer period is intended. The uncertainty is compounded by the Explanatory Note to the Combined Nomenclature on subheadings 02101111 and 11 19. The question is, therefore, whether that explanatory note is to be regarded as a definition of the concept ‘salted’ generally in relation to all types of meat and applied accordingly, mutatis mutandis, to meat of bovine animals.

13. The Bundesfinanzhof points out that if that definition of the concept of salting is also relevant to meat of bovine animals, it is still necessary to clarify what is to be understood by ‘deep salting’ and at what point the period of preservation (even if used only as a temporary measure) ‘considerably exceed(s) the time required for transportation’. The Bundesfinanzhof is inclined to agree with the plaintiff in regarding meat of bovine animals as (deep) salted when it has a measured total salt content of approximately 0.5%, in other words some three times its natural salt content. The circumstances in which the period of preservation considerably exceeds the time required for transportation should be a question of fact in each case. Where the time required for transportation is approximately one hour, a period of preservation lasting one or two days should be sufficient, unless the explanatory note in question was based on the assumption of, for instance, the time normally required for international transportation.

14. It appears from the order for reference that the Oberfinanzdirektion considers that the system of heading 0210 relates only to meat which has undergone a greater degree of processing, that is ‘deep salted’ meat with a minimum salt content of 2%, as compared with meat under Combined Nomenclature headings 0201 (fresh, chilled) or 0202 (frozen). It maintains, on the basis of the Explanatory Notes to subheadings 02101111 and 02101119, that the concept of ‘preservation’ applies in general to all meat under heading 0210. A salt content of 1.2% cannot possibly be adequate. Even 2% is extremely low in view of the fact that the Bundesanstalt für Fleischforschung (Federal Office for Meat Research) considers that 4 to 5% is necessary to preserve the meat without freezing.

IV — Procedure before the Court

15. The order for reference was received at the Court Registry on 10 February 1992.

16. Pursuant to Article 20 of the Statute of the Court of Justice of the EEC, written observations were submitted on 18 May 1992 by the Commission of the European Communities, represented by Richard Wainwright, Legal Adviser, and Arnold Ridout, a civil servant seconded to the Legal Service of the Commission under the arrangements for exchanges with national civil servants, acting as Agents, assisted by Hans-Jürgen Rabe, Rechtsanwalt, Hamburg, also on 18 May 1992 by the Belgian State, represented by J. Devadder, Administrative Director at the Ministry of Foreign Affairs, Foreign Trade and Development Cooperation, acting as Agent, and on 21 May 1992 by Gausepohl-Fleisch GmbH, represented by Volker Schiller, Rechtsanwalt, Cologne.

17. Upon 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. By decision of 18 January 1993, it assigned the case to the First Chamber.

V — Written observations submitted to the Court

Observations of the pontiff in the main proceedings, Gausepohl-Fleisch GmbH

18. The pontiff observes, first, that the concept ‘salted’ in heading 0210 ‘Meat of bovine animals, salted, boneless’ has never been interpreted by the Court. Any such interpretation must be based on an objective criterion. It recalls the case-law of the Court in this connection (see judgments in Case 175/82 Dinter [1983] ECR 969, Case C-120/90 Ludwig [1991] ECR I-2391, Case 54/79 Hako-Schub [1980] ECR 311 and Case 798/79 Chem Tec [1980] 2639.

19. The plaintiff considers that the first question should be answered in the affirmative. It maintains that the decisive criterion for the purpose of settling that question is that meat should be regarded as ‘salted’ when a quantity of salt has been added such that the total salt content amounts to at least three times the natural salt content, which is 0.15%. The addition of 0.5% salt exceeds the limit of 0.3% beyond which there is a qualitative change both in the taste of the product (which is irrelevant for tariff classification purposes — see judgment in Dinter cited above) and the use to which it can be put. The plaintiff points out in this connection that the formula used in the manufacture of certain sausage and meat preparations varies in respect of the amount of salt used.

20. The plaintiff emphasises that heading 0210 of the Combined Nomenclature is not subject to any condition as regards depth of salting. According to the Explanatory Notes to the Combined Nomenclature, ‘deep’ salting is required only for meat of swine and is not applicable to other tariff headings. The case before the national court is simply concerned with a question about the term ‘salted’. Classification under heading 0210 of the Combined Nomenclature therefore depends solely on whether the quantity of salt added to the meat enables it to be preserved for more than the period of one day normally required for transportation. The plaintiff claims that the addition of salt amounting to more than three times the natural salt content ensures the preservation of meat for a period of up to two days, and generally even longer, over and above the period (one day) normally required for transportation and that the preservative effect of salting, particularly in cooling temperatures of 2 to 7°, is widely recognized.

21. In the alternative, should the Court's answer to the first question be in the negative, the plaintiff suggests that the answer to the second question should be as follows:

‘The Common Customs Tariff (Combined Nomenclature) must be interpreted as meaning that meat of bovine animals to which a quantity of salt has been added for the purposes of preservation such that the total salt content exceeds 0.7% is to be classified under subheading 02102090 of the Combined Nomenclature of the Common Customs Tariff; the depth of salting is irrelevant in this case inasmuch as the actual salting ensures preservation for more than twice the period required for transportation. However, that condition shall be deemed to be fulfilled if the period of preservation is at least two days.’

Observations of the Belgian Government

22. The Belgian Government emphasises, first, that in Belgium meat is classified under heading 0210 of the Combined Nomenclature when it is treated with salt or brine for the purpose of preservation. The salt content resulting from the treatment is not a crucial factor. However the salt content of meat of bovine animals treated in this way must in no circumstances be less than 1.2%.

23. Consequently, meat of bovine animals merely sprinkled with salt in order to prevent it from deteriorating during transportation must be classified as fresh meat. Similarly, the mere fact that meat is injected with a saline solution does not mean that it is ‘salted’ for the purposes of heading 0210 of the Combined Nomenclature.

24. The Belgian Government considers that the Explanatory Note to the Combined Nomenclature on subheadings 02101111 and 02101119 relating to meat of swine should apply mutatis mutandis. Thus, meat should be classified as salted only if it has been evenly and deeply impregnated with salt in all its parts.

25. The Belgian Government also observes that the period for which meat is preserved depends not only on the treatment it has undergone but also on the nature of the environment in which it is preserved (ambient temperature and level of hygiene in packaging). It does not seem right, therefore, to specify a standard preservation period for salted meat that does not take account of the various conditions in which it may be preserved.

Observations of the Commission

26. The Commission draws attention, first, to the case-law of the Court relating to the need for an objective criterion for the tariff classification of products (judgments in Case C-120/90 and Case 175/82, cited above, and Case C-233/88 Gijs van de Kolk [1990] ECR I-265).

27. The Commission considers that the first question should be answered in the negative but emphasises that it is difficult to find a good objective criterion for classifying meat under heading 0210.

28. It points out that under the system of Chapter 2 of the Common Customs Tariff salting must be a preserving process (see judgment in Case 175/82 Dinter [1983] ECR 969, cited above). According to the Explanatory Notes of the Customs Cooperation Council, such preservation must not be for transportation purposes only.

29. The Commission notes that in the case before the national court the addition of salt enabled the meat to be preserved for one or two days, whereas the time at present required for transportation was only one hour. The Commission therefore wonders under what conditions the addition of salt to a product ‘preserves’ it for the purposes of classification under heading 0210 of the Combined Nomenclature.

30. The Commission refers in this connection to the Explanatory Note to the Combined Nomenclature on subheadings 02101111 and 02101119 relating to meat of swine, which it considers should apply mutatis mutandis in the present case. It points out that the current version of that Note owes its form to a question raised in 1979 by the German delegation to the Committee on Common Customs Tariff Nomenclature, which had written to the Commission asking what was the minimum salt content above which meat of bovine animals, in particular, could be regarded as ‘salted’ for the purposes of tariff heading 0206 as it then was (now heading 0210 of the Combined Nomenclature). Also, as the minutes of the relevant meetings show, the comments of the Ad hoc Working Party on Agriculture requested by the Committee to examine the problem with a view to drawing up a draft Explanatory Note refer constantly to ‘products falling within tariff heading 0206’. (See minutes of meetings of the Committee on Common Customs Tariff Nomenclature and the Ad hoc Working Party on Agriculture held on 2 and 13 July 1979 and 18 February and 1 April 1980). The subheadings within heading 0206 covered meat of bovine animals as well as meat of swine. The Commission therefore concludes that the explanatory note in question may be used as a basis for interpreting heading 0210 of the Combined Nomenclature with respect to both sorts of meat.

31. The Commission recognizes, however, that the terms used in that explanatory note do not provide any precise demarcation criteria and cannot be translated into any specific percentage salt content. The terms ‘preservation’ and ‘for the purposes of preservation’ are not absolute concepts. According to the expert opinion of the Federal Office for Meat Research contained in its letter of 26 June 1979 to the Zolltechnische Prüfungs-und Lehranstalt München (Customs Laboratory and Training College, Munich) (Annex 1 to the Commission observations), ‘preservation’ is the state in which a foodstuff can still show certain qualities because the process of decomposition has not yet started. The loss of those qualities is gradual and depends on a great many factors. Time, temperature, and pH and a w values (the action of water) play a part. Other features of the product such as its initial germ count, the composition of its microflora, the conditions in which it is kept and the extent to which it is cut into pieces also affect the period of preservation.

32. The Commission therefore considers that a particular preserving process — in this case, salting — or a specific quantity of a preserving agent (in this case, a total salt content of 0.5%) can serve as a basis for defining the concept of ‘preservation’ only in ‘highly exceptional cases’. It refers in this connection to the second paragraph on page 2 of the letter containing the expert opinion attached at Annex 1 to its observations, which states that the quantity of salt added to meat is a decisive factor only in the aqueous phase of the meat. The Commission also refers to the Explanatory Note to the Combined Nomenclature mentioned above, which states that the salt content ‘may vary considerably between different types and cuts of meat’.

33. The Commission also observes that this view is not incompatible with the expert opinion of the Federal Office for Meat Research, which suggests a salt content of 4 to 5% as a criterion in the case of preservation by ‘deep’ salting. Those figures should not be considered in the abstract but regarded as a logical consequence of the definition of the word ‘treated’ (haltbar gemacht) in Chapter V, paragraph 26 of Annex A to Council Directive 77/99/EEC of 21 December 1976 on health problems affecting intra-Community trade in meat products (OJ 1977 L 26, p.85). According to that definition, meat has been ‘treated’, ‘when either the a w value is less than 0.97 or the cut surface shows that the product no longer has the characteristics of fresh meat’. The Oberfinanzdirektion too appears to be taking that definition as a basis.

34. However, the Commission notes that under Article 2 of Council Directive 88/658/EEC of 14 December 1988 (OJ 1988 L 382, p.2), Annexes A and B to Directive 77/99/EEC were replaced by Annexes A, B and C to the later directive. The whole of Chapter V in Annex A to the earlier directive was deleted and was not replaced. As the definition in question has been dropped, a salt content of 4 to 5%, based on an aw value of less than 0.97, can no longer be adopted as a criterion without further ado.

35. The Commission also points out that there are further difficulties, arising from the uncertainty as to the period of preservation required to ensure preservation ‘considerably exceeding the time required for transportation’. It wonders whether the period of preservation ought to be calculated solely in terms of the time required for transportation and, if so, whether it can be adopted as a valid criterion for charging which can be verified at the time of presentation for customs clearance (see Case C-233/88, cited above, p.281). It notes that, according to the opinion of the Federal Office for Meat Research, the period of preservation is also determined by other factors such as storage, time and temperature, which cannot of course be measured or verified at that time.

36. This, according to the Commission, is why the Member States of the Community have not yet adopted a uniform charging policy.

37. The Commission asks the Court to note that, according to its own investigations in connection with the present case, the information provided by the Federal Office for Meat Research and the various charging policies adopted by the Member States confirm that the salt content of a product can never be the only decisive criterion for interpreting the term ‘salted’ for the purposes of heading 0210 of the Combined Nomenclature. It is consequently impossible to specify a standard percentage salt content.

38. In reply to the first question referred by the national court, the Commission notes that a salt content of 0.5% is not in any case sufficient for the purpose of preserving meat of bovine animals. In view of the uncertainty attaching to the term ‘preservation’ and in the present state of Community law, it is necessary to rely for the purposes of interpretation on descriptive definitions such as those contained in the Explanatory Notes, which are based on objective characteristics and properties.

39. The Commission suggests that the Court should reply as follows to the questions referred to it by the Bundesfinanzhof:

‘(1) The Common Customs Tariff (Combined Nomenclature) must be interpreted as meaning that meat of bovine animals to which a quantity of salt has been added for the purposes of preservation such that the total salt content measured (approximately 0.5%) amounts to more than three times the natural salt content (0.15%) is not to be classified as salted under heading 0210.

2) In the present state of Community law, it is not possible to lay down a minimum salt content for products classified under heading 0210. The Common Customs Tariff (Combined Nomenclature) must be interpreted as meaning that only meat of bovine animals that has been preserved by deep dry salting or pickling in brine falls under that heading. The percentage salt content of such products may vary between different types and cuts of meat.’

D. A. O. Edward

Judge-Rapporteur

1 Language of the case: German.