C-74/69

JUDGMENT OF 18. 6. 1970 — CASE 74/69

Community must be interpreted as product, it may only do so by observing meaning that Member States are not per­ Community law, without the national mitted to adopt provisions of national authorities' being able to issue rules of law affecting the scope of the regulation interpretation having binding effect. itself, and in particular the descriptions of goods appearing therein. 4. An unofficial interpretation of a regula­ tion by an informal document of the 3. The provisions to which the common Commission is not enough to confer on organizations of the markets in agri­ that interpretation an authentic Com­ culture give rise must be applied in a munity character. Such documents have uniform manner in all the Member no binding effect and thus cannot ensure States. The descriptions of the goods that the provisions to which they refer which are subject to these organizations have the same scope in all the Member must therefore have, in all the Member States. The uniform application of Com­ States, the same scope and must be inter­ munity law is only guaranteed if it is the preted in a manner which respects Com­ subject of formal measures taken in the munity jurisdiction. It follows that context of the Treaty. Member States may not, where there are difficulties in classifying a product for 5. The interpretation of one tariff heading tariff purposes, themselves fix this scope in relation to another must, in a case of by way of interpretation. Although, in doubt, take into account both the func­ such a case, the national administration tion of the customs tariff in regard to the may find it advisable to take implement­ necessities of the systems of organization ing measures and to elucidate thereby of the markets and its purely customs the doubts raised by the description of a function.

THE COURT

composed of: R. Lecourt, President, R. Monaco (Rapporteur) and P. Pescatore,

HAUPTZOLLAMT BREMEN ν KROHN

Presidents of Chambers, A. M. Donner, A. Trabucchi, W. Strauß and J. Mertens de Wilmars, Judges,

Advocate-General: K. Roemer

Registrar : A. Van Houtte

I — Facts and procedure under tariff heading 11.06 A, decided by order of 21 October 1969 to submit to the 1. On 11 July 1966 the firm Waren-Import- Court of Justice, pursuant to the first and Gesellschaft Krohn & Co. cleared through third paragraphs of Article 177 of the EEC the Customs Office of Bremen—Übersee­ Treaty, the following questions : hafen 204 796 kg of residues of starch manufactured from tapioca' ('waste'), '(a) Is Article 23 (1) of Regulation No 19/62 having a starch content in excess of 40%, of the Council on the progressive coming from Thailand. In its customs de­ establishment of a common organiza­ claration Krohn asked for these goods to be tion of the market in cereals of 4 April classified under tariff heading 23.03 of the 1962 (OJ 1962, No 30, p. 933), according German Customs Tariff, the products under to which Member States shall take all this heading not being subject to levy.­ measures with a view to adapting their The Customs Office, relying on the Ex­ provisions laid down by law, regulation planatory Notes on the German Customs or administrative action so that the pro­ Tariff', took the view on the other hand that visions of this regulation may take effect the said goods constituted 'manioc flour' in practice as from 1 July 1962, to be within the meaning of tariff heading 11.06 A understood as meaning that Member of the tariff of levies, the products under States are entitled and obliged to state that heading being, according to Regula­ and specify, by provisions of internal tions Nos 19/62 and 141/67, subject to levy. law, the descriptions of the products After the Finanzgericht (Financial Court), subject to levy (Article 1 of the regula­ Bremen, to which Krohn appealed, had tion)? found on 27 January 1966 that tapioca waste does not come under heading 11.06, the (b) If not: Hauptzollamt (Principal Customs Office) Is Article 1 of Regulation No 19/62 of lodged a further appeal against that decision the Council, which lists the goods ap­ to the Bundesfinanzhof (Federal Finance pearing in the Common Customs Court), Munich, in May 1967. Tariff, to be understood as meaning that That court, having found that the answer to these descriptions of products are the problem in question was bound up with capable of being interpreted by the the interpretation of Article 1 (d) of Regula­ national legislature for so long as there tion No 19/62, the annex to which repeats is no interpretation according to Com­ verbatim the description 'manioc flour' munity law?

(c) If not: cannot, in its opinion, prevent the funda­ Is the expression "manioc flour", ap­ mental principles worked out by the Court pearing in the annex referred to in in that judgment from being applied to the Article 1 (d) of Regulation No 19/62 of present case. the Council, to be understood as The problems of substance are the same in meaning that it covers, irrespective of the two proceedings and the solution the manufacturing process, any product adopted by the Court was intended to be derived from manioc roots when its general in nature, going beyond the case of a starch content is in excess of 40%, or particular common organization of the are maximum and minimum contents in markets. other constituent elements, such as raw The German Government recalls that in its fibres, sugar or proteins, also to be taken judgment in Case 40/69 the Court stressed into consideration?' the necessity for safeguarding uniformity in the application and interpretation of the 2. The order making the reference was regulations establishing a common organ­ received at the Court on 4 December 1969. ization of markets, as well as of the provi­ Waren-Import-Gesellschaft Krohn & Co., sions of the Common Customs Tariff. the Government of the Federal Republic of However, the application and interpretation Germany and the Commission of the Euro­ of the Community rules in question in the pean Communities submitted written ob­ present case are the same in all the Member servations in accordance with Article 20 of States so that uniformity is assured in this the Protocol on the Statute of the Court of instance. The German Government more­ Justice annexed to the EEC Treaty. over has complied, as regards the classifica­ Upon hearing the report of the Judge- tion in dispute, with a communication from Rapporteur and the views of the Advocate- the Commission of 13 May 1966 : General, the Court decided not to order any preparatory inquiry. — informing it of the fact that the Member Waren-Import-Gesellschaft Krohn & Co., States had decided to consider as coming the Government of the Federal Republic of under tariff heading 23.03 the residues Germany and the Commission presented from the production of starch from oral argument at the hearing on 21 April manioc roots with a starch content in 1970. excess of 40% at the maximum, and to The Advocate-General delivered his opini­ classify under heading 11.06 A residues on at the hearing on 12 May 1970. having a higher starch content ; and

the interpretation of the description in dis poses of such interpretation, by means, if pute, the German Government draws need be, of explanatory notes on the attention to the consequences entailed by 'Brussels Nomenclature'. Member, States the fact of having in the future—in accord cannot be recognized as having powers ance with the judgment in Case 40/69— to which are not compatible with the principle confine itself to adopting, for the inter of the precedence of Community law. pretation of the descriptions of goods in the Although it is conceivable that, for practical Common Customs Tariff, internal ad reasons, national authorities may on

The Commission of the European Commun it is only on the basis of the customs tariff ities, referring inter alia to the judgment of itself that it is possible to define the re the Court in Case 40/69, recalls that Com spective areas of application of the two munity law constitutes an independent legal tariff headings in question. It follows order having precedence over the internal directly from the wording of heading 11.06 law of the Member States. From this it —taking into account the place which that infers that the States no longer have the heading occupies in the Common Customs power to legislate in matters which the Tariff and the reference which it has to Treaty leaves to the Community authorities, heading 07.06—that what must be concern unless specific powers are conferred on the ed are roots and tubers under heading 07.06 Member State expressly or by implication which have been processed solely by grind under the system laid down by the rules of ing. the Community. However the concept of milling current in In the present case it cannot be inferred trade circles does not apply to operations in from Regulation No 19/62 that such powers the course of which the product undergoes have been conferred. Such an inference chemical or physical treatment which alters follows neither from Article 23—which is its nature. More particularly, it does not clearly inspired by the fundamental prin cover heat-treatment or washing, since the ciple already stated in Article 5 of the result is a new and better product.

times require to be interpreted. But in that The decision of the German administration case Community law itself provides the to enlarge the scope of heading 11.06 at the criteria and rules to be followed for the pur- expense of heading 23.03 as far as including

all tapioca products irrespective of the The German Government, after giving de means of manufacture used in so far as their tailed technical information on the produc starch content is in excess of 40% is due in tion and starch content of manioc flours, the final analysis to concerns of a fiscal observes in particular that the description nature: it seeks to prevent the importation 'tapioca flour' indicates, in international without levy of tapioca products which have trade, all flour obtained from manioc roots, been subjected to superficial processing. irrespective of the manufacturing process, Although these concerns are justified in and that the starch content of these prod themselves the quantitative criterion chosen ucts varies considerably according to their for the purpose of deciding on the classifica

For it duced on the Commission's recommenda would be absurd that, by reason of the tion, it should be stated: simple fact of this process, the flours should automatically come within the category of — with the exception of that government, residues, although still having a starch no other Member State followed such a content as high as that of other qualities of recommendation—one which, more tapioca flours. Only the starch quantity con over, had no binding effect—in adopting tained (or still contained) is thus decisive for such a criterion for the classification of the purposes of a distinction between flours tapioca products under the two tariff coming under the two tariff headings in headings in question ; question and not for the manufacturing

of the product. As for the 'residues from the 23.03 or heading 11.06, a distinctive general manufacture of starch from tapioca', this criterion, based on objective technical data, value is appreciably less than that of ground had to be established in order in particular manioc roots. to ensure a uniform classification of The Krohn undertaking states that the term products and the implementation of the 'manioc flour' within the meaning of Article common organization of the markets. 1 (d) of Regulation No 19/62 must in its The German Government also contests, by opinion be interpreted as applying solely to means of extensive technical data, the dis products deriving from the grinding of tinction between tapioca flours within the manioc roots and not to the residues of the meaning of heading 11.06 and residues production of tapioca starch. The fact that a under heading 23.03 founded on the state of product deriving from tapioca has a starch the starch grains, the colour, the fibre con content in excess of 40 % is not enough for it tent and other constituents (proteins, to be regarded as 'manioc flour'. sugar etc.).

It states that in its opinion 'manioc flours' missible since it is clear that, if a regulation within the meaning of Article 1 of Regula establishing a common organization of the tion No 19/62 are distinguished from the markets adopts a heading of the Common 'residues' referred to by tariff heading 23.03 Customs Tariff, it adopts it according to the solely by reason of their starch content. The significance and scope which that tariff percentage of 40 % adopted for this purpose attaches to it. corresponds to an objective criterion for However, by virtue of the rules of interpre making a distinction for tariff purposes. tation which may be deduced from the The Commission takes the view that the Common Customs Tariff and also from the argument of the Krohn undertaking finds explanatory notes on the Brussels Nomen support neither in the wording of tariff clature, the tapioca residues which, on the heading 11.06 nor in the fundamental prin basis of the aforesaid concept of 'flour', are ciples of the German Tariff and that it fails not precisely shown in either of the two to correspond to the ultimate purposes of tariff headings in question must, in case of

manufacturing process used. The tariff products and those of domestic products heading in question applies therefore to but also to ensure for the latter the benefit of tapioca flour of normal commercial quality, a preferential system. Unlike tariff heading including tapioca residues with a high 23.03, heading 11.06 applies to all products starch content, which are ground manioc imported from third countries capable of roots from which part of the separable constituting a threat to similar domestic natural starches have been removed by products which must be protected.

of those notes. Lastly, according to the 'tapioca waste', which was exempted from customary interpretation of the Common levy from the outset. Customs Tariff, even flours corresponding to the limited concept proposed by the firm (d) For all these reasons, and having Krohn can be submitted to manipulative regard to the explanatory notes on the processes without thereby losing their Brussels Nomenclature, the distinction essential features. between 'tapioca waste' under heading 11.06 and the residues under heading 23.03 (b) Moreover, even on the basis of that must be based on their starch content which limited concept; the fundamental principles determines the value and the intended use of of the Common Customs Tariff do not the product. permit 'tapioca residues' to be classified According to the Commission s experience, otherwise than under tariff heading 11.06. this content can be fixed, in view of the Resort to such principles for the interpreta extraction processes used in the Commun tion of the descriptions of the goods con ity, at approximately 40% of the total tained in Regulation No 19/62 is quite per- weight of the dry material.

JUDGMENT OF 18. 6. 1970 — CASE 74/69

necessarily constitutes a fixed value but it in its opinion be interpreted as meaning that complies with the rules of interpretation of it covers, irrespective of the manufacturing the Common Customs Tariff and does not process, the products obtained from manioc rest on considerations foreign to the roots and having a starch content in excess problem. of 40% by weight of dry material, without The Commission concludes that the term any necessity to take into account maximum 'manioc flours' within the meaning of or minimum contents of other constituent Article 1 (d) of Regulation No 19/62 must elements.

Grounds of judgment

1 By order of 21 October 1969 which was received at the Court on 4 December 1969 the Bundesfinanzhof of the Federal Republic of Germany has referred to the Court of Justice, pursuant to Article 177 of the EEC Treaty, several questions seeking to obtain an interpretation of Regulation No 19 of the Council of the EEC of 4 April 1962 (OJ 1962, No 30).

The first question

2 By the first question the Court of Justice is asked to rule whether Article 23 (1) of Regulation No 19/62 is to be understood as meaning that the Member States are entitled and obliged to state and specify, by provisions of internal law, the descriptions of the products subject to levy (Article 1 of the regulation).

The second question

7 Should the first question be answered in the negative, the Bundesfinanzhof asks the Court if Article 1 of Regulation No 19/62 of the Council, which lists the goods appearing in the Common Customs Tariff, is to be understood as meaning that these descriptions of products are capable of being interpreted by the national legislature for so long as there is no interpretation according to Community law.

8 Since the description of the goods referred to by the regulations establishing a common organization of the market comes under Community law, its interpre­ tation can only be fixed by respecting Community jurisdiction. The common organizations of the agricultural market such as that referred to by Regulation No 19/62 can only fulfil their functions if the provisions to which they give rise are applied in a uniform manner in all the Member States. The descriptions of the goods which are subject to these organizations must therefore have the same scope in all the Member States. Such a requirement would be called in question if, in the case of difficulty in the tariff classification of a product, each Member State could itself fix this scope by way of interpretation.

9 An unofficial interpretation of a regulation by an informal document of the Commission is not enough to confer on that interpretation an authentic Community character. Such documents, which no doubt have their value for the purpose of applying certain regulations, have, however, no binding effect, and thus cannot ensure that the descriptions of the goods to. which they refer have the same scope in all the Member States. The uniform application of Community law is only guaranteed if it is the subject of formal measures taken in the context of the Treaty.

13 Article 1 of Regulation No 19/62 on the progressive establishment of a common organization of the market in cereals subjects to a system of levies the importation of cereals and certain non-cereal products including those under heading 11.06 of the Common Customs Tariff, including manioc flours, imported especially as feeding-stuffs, by reason of their high starch content. These products are liable to a 28 % ad valorem levy. On the other hand, the products under heading 23.03, including, inter alia, the residues of starches, were left outside the area of appli­ cation of Regulation No 19/62 and are not liable to any customs duty or levy.

14 Following the entry into force of Regulation No 19/62, crushed manioc roots were imported into the Federal Republic of Germany after undergoing treatment in their country of origin intended to extract the starch. Even after this treatment these goods still exhibited a high starch content which rendered them capable of being marketed as manioc flours. However, they were declared to the customs as 'starch residues' under heading 23.03—which was intended to exempt them from the levy affecting these flours. The question referred thus seeks, as regards the products derived from manioc, to establish what criteria make it possible to distinguish the 'starch residues' of manioc under heading 23.03 from manioc flours under heading 11.06.

15 The interpretation of one tariff heading in relation to another must, in a case of doubt, take into account both the function of the customs tariff in regard to the

18 This interpretation would give to heading 11.06 a content which it does not possess. By classifying flours as the products of the. milling industry the Common Customs Tariff does not contemplate a specific form of processing vegetable products into flours. On the other hand, the expression 'by simple grating' used by the explana­ tory notes concerns the. stage of processing roots into flour and not the treatment which those roots may or, in certain cases, must have undergone previously. More­ over, the prior extraction of a small part of their starch content leaves the roots, before they are crushed, with properties such that they continue to come under heading 07.06 which includes all roots or tubers having a high starch content. The result of this treatment is thus not to remove from heading 11.06 flours deriving from the grating of the roots treated in this way.

19 The Commission and the Federal Government on the one hand and the plaintiff in the main action on the other take issue with each other on the question of the

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JUDGMENT OF 18. 6. 1970 — CASE 74/69

percentage of the starch content which enables flour residues to be distinguished and rely on the authority of experts whose evaluations, as regards the starch con­ tent of the residues, vary between 30% and 70% of starch in relation to dry material. According to the Commission and to the Federal Government only primitive and superficial extraction methods leave starch contents in excess of 50% or 60%, whereas with modern extraction methods the residues have a starch content which does not exceed 40 %. The plaintiff in the main action on the other hand states that residues with a starch content under 40% do not exist and that, even after treatment by modern processes, manioc roots still have a starch content in excess of 60%, particularly by reason of the peculiarities of their fibrous struc­ ture.

22 During the year 1966, when the Committee on Common Customs Tariff Nomen­ clature set up by Regulation No 97/69 of the Council of 16 January 1969 (O.J. Special Edition 1969 (I), p. 12) was not yet operative, a group of officials from the Member States presided over by a representative of the Commission was of the unanimous opinion that only products which, after being subjected to treatment designed to extract starch, contained no more than 40 % of that product, could be regarded as residue from the manufacture of starch from manioc and placed under heading 23.03. The result of this discussion was communicated by the Com­ mission's departments to the Permanent Representatives of the Member States, and in particular to the Representative of the Federal Government by letter dated 13 May 1966. The Federal Minister of Finance of that government, by regulation of 27 June 1966, fixed the limit of starch content at 40%.

23 In the absence of express Community provisions, an interpretation fixing the limit of heading 23.03 at 40% of starch content, as regards the 'residues from the

HAUPTZOLLAMT BREMEN ν KROHN

manufacture of starch' from manioc, is calculated to ensure that at any event, despite the peculiarities of the trade concerned in the different Member States, manioc products which could, without the addition of other substances, be marketed as manioc flour shall be subject to the levy.

24 Although this limit may be regarded as fixed at the lowest level, it does not, how­ ever, have the effect of destroying the substance of the concept 'residues from the manufacture of starch'. Whilst it leads to a narrow interpretation of the concept 'residues from the manufacture of starch' from manioc, this interpretation finds its justification, however, in the fact that, unlike residues from the manufacture of starch from other products, what is left over from the manufacture of starch from manioc constitutes a product which has nothing in common with waste but has from the commercial point of view the characteristics of a raw material from which it is still possible to obtain manioc flour.

Having regard to the Treaty establishing the European Economic Community, especially Articles 38 to 47, 177 and 189; Having regard to Regulation No 19 of the Council of the EEC of 4 April 1962; Having regard to Regulations of the Council of the EC Nos 950 of 28 June 1969 and 2451 of 8 December 1969; Having regard to Regulation No 97 of the Council of the EC of 16 January 1969; Having regard to the Protocol on the Statute of the Court of Justice of the EEC, especially Article 20; Having regard to the Rules of Procedure of the Court of Justice of the European Communities;

THE COURT

in answer to the question referred to it by the Bundesfinanzhof of the Federal Republic of Germany under the order made by that court on 21 October 1969 hereby rules :

1. Article (1) 23 of Regulation No 19/62 of the Council of the EEC must be interpreted as meaning that Member States are not permitted to adopt provisions of national law affecting the scope of the regulation itself, and in particular the descriptions of goods appearing therein;

2. Even in the absence of an express Community interpretation, Article 1 of Regulation No 19/62 of the Council of the EEC, which lists the goods appearing in the Common Customs Tariff, does not empower national authorities to issue, for the purpose of defining those descriptions, rules of interpretation having binding effect ;

3. The expression 'manioc flours' within the meaning of Article 1 (d) of Regula­ tion No 19/62, read in conjunction with heading 11.06 of the Common Customs Tariff, mentioned in the annex to that regulation, must be inter­ preted as referring to all farinaceous substances obtained from manioc roots, irrespective of the treatment which those roots may have undergone, where the product has a starch content in excess of 40 %.