C-21/71

JUDGMENT OF THE COURT 15 DECEMBER 1971 1

Heinrich P. Brodersen Nachf., GmbH & Co. KG v Einfuhr- und Voratsstelle für Getreide und Futtermittel

(Reference for a preliminary ruling by the Hessisches Finanzgericht)

'Pearled Barley'

Case 21/71

Summary

1. In the absence of any Community 141/64/EEC of the Council and provisions in the matter, the explana­ Regulation No 60/66/EEC of the tory notes and classification opinions Commission, the Member States provided for by the Convention on could only regard as 'pearled barley' Nomenclature for the Classification of those products which satisfied at least Goods in Customs tariffs, are authori­ the conditions laid down by the Ex­ tative as means of interpreting com­ planatory Notes to heading 11.02 in mon tariff headings. the document known as the 'Brussels 2. Within the context of the application Nomenclature'. Within the context of of the scheme of optional refunds on the application of the abovementioned exports of processed cereal-baked pro­ provisions, the national authorities ducts to third countries which is laid were entitled to add to those mini­ down in Article 20 of Regulation No mum requirements other more pro­ 19/62 of the Council, Regulation No tective conditions.

In Case 21/71

Reference to the Court under Article 177 of the EEC Treaty by the Hessisches Finanzgericht for a perliminary ruling in the action pending before that court between

1 — Language of the Case: German.

JUDGMENT OF 15. 12. 1971 — CASE 21/71

HEIRICH P. Brodersen Nachf., GmbH & Co. KG, Lübeck,

gives the following

JUDGMENT

Issues of fact and of law

I — The provisions applic­ case the general criteria for fixing the able, facts and pro­ amount of the refunds to be granted to cedure processed products have been laid down by Regulation No 141/64/EEC of the The facts and procedure may be sum­ Council of 21 October 1964 (JO No 169, marized as follows: p. 2666). In order to enable exports to take place to third countries on the basis of the Article 5 (1) of that Regulation treats hulled barley differently from pearled prices ruling in the world market, Article 20 (2) of Regulation No 19/62 of the barley, in that the maximum amount of the refunds payable in respect of the Council of 4 April 1962 on the pro­ gressive establishment of a common or­ former is based on the average levy ap­ ganization of the market in cereals (JO plying to 160 kg, while the basis for No 30, p. 933) provides for the possi­ pearled barley is 250 kg. bility of granting refunds. The terms hulled grains' and pearled For the period concerned in the present grains' are contained in the annex to

BRODERSEN V EINFUHR-UND VORRATSSTELLE GETREIDE

grain. The product must show a uni EEC of the Commission (JO No 103, form curvature and the difference in p. 1854) established additional criteria width (that is, the distance between designed to limit the maximum amount the sides) must, for at least 70% of of the refunds permitted. the grains, be at least 0.5 mm and, Within the context or the implementa for all the grains, be a maximum of tion of their right to grant export re 1 mm (finding made by granulometric funds the authorities in the Federal Re analysis by passing through a round- public of Germany adopted measures holed sieve or by measurement of 200 which establish the criteria and condi

follows: Vorratsstelle fur Getreide und Futter (3) hulled grains, under heading ex 11.02 of the Common Customs mittel refused to grant the undertaking Heinrich P. Brodersen the refund which Tariff: according to the conversion it requested on the export of 270 000 rate of 100 kg; 102 kg of each of kg of barley grains, to Denmark on 29 the basic products; June 1967. This refusal was based on (4) pearled grains, under heading ex 11.02 of the Common Customs the fact that the form of the sample tariff: examined did not correspond to that of pearled barley and, moreover, that (a) of barley, of an ash content, ex as a result of the presence of traces of pressed as a ratio of the dry embryo found in most of the grains, the material, of less than 1% (with goods exported did not consist of pearled out talcum): according to the

During the following definition: proceedings the Einfuhr- und Vorrats 'Criteria for identifying pearled bar stelle granted the applicant the amount ley: pearled barley is a product the of the refund provided for by the Ger ash content of which, expressed as a man rules on hulled barley, which is ratio of the dry material, does not considerably lower than that provided exceed a certain percentage (without for in respect of pearled barley. The talcum) and which is hulled, round applicant insists on obtaining the dif and smooth on all sides, with the re- ference.

JUDGMENT OF 15. 12. 1971 — CASE 21/71

received at the Court Registry on 27 Tariff merely showed that the degree of April 1971 the Hessisches Finanzgericht processing must be greater for pearled requested the Court under Article 177 grains than for hulled grains. To dis­ of the EEC Treaty to give a preliminary cover the degree of processing required ruling on the following questions: in order that the grain may be regarded 1. What must be understood by the as 'pearled' it is necessary to interpret terms the Common Customs Tariff. It is for this reason that the Finanzgericht has (a) "Hulled barley grains": ("Ge­ referred the above questions to the treidekörner, geschliffen, von Court. Gerste") Pursuant to Article 20 of the Protocol (b) "pearled barley grains": ("Ge­ treidekörner, perlförmig geschlif­ on the Statute of the Court of Justice fen, von Gerste") annexed to the EEC Treaty, written ob­ appearing under heading 11.02 or the servations were lodged by the undertak­ Common Customs Tariff?' ing H.P. Brodersen and the Commission of the European Communities. 2. How are the two categories of pro­ ducts referred to under 1 above dis­ Upon hearing the report of the Judge- tinguished and in what does this dis­ Rapporteur and the views of the Ad­ vocate-General the Court decided to tinction consist? In particular, in order that the product may be given open the oral procedure without holding the tariff classification described un­ any preparatory inquiry. The parties to the main action and the Commission der 1 (b), is it necessary for the grains to have become approximately presented oral argument at the hearing on 12 October 1971. H.P. Brodersen pearl-shaped (that is, almost spherical or ellipsoidal) and, therefore, for was represented by Mr Modest, Ad­ them to show no grooves or traces vocate, of the Hamburg Bar, the Einfuhr- und Vorratsstelle fur Getreide of embryo, or is it sufficient for al­ most all the pericarp to have been und Futtermittel was represented by Mr removed from the grain and for it Stockburger, Advocate of the Bar of to have been rounded at both ends, Frankfurt am Main and the Commission

the uniform application of Community From its consideration of all the above- law. It is not certain that all the Mem­ mentioned texts Brodersen draws in par­ ber States apply the Court's interpreta­ ticular the following conclusions: tation of a tariff heading in a uniform 1. Since 30 July 1962 no explanatory manner to past situations. notes of a binding nature have been As regards heading 11.02 or the Com­ issued regarding the goods subject mon Customs Tariff, the plaintiff main­ to the agricultural market organiza­ tains that it could not be interpreted in tion, nor are any being issued by the a different manner for exports and for Commission; imports. Thus, the concept of 'pearled 2. The contents of the various German barley' cannot be more restrictive in the explanatory notes, which had no case of exports than in the case of im­ binding force but which have how­ ports. ever been applied in practice are not The plaintiff then enters into technical the same; details, and considers the characteristics The directives from the Einfuhr- und and composition of barley grains both Vorratsstelle laid down additional as regards their chemical and nutritive criteria which did not conform either properties and their ash content. For the purposes of replying to the with the decrees concerning refunds or with the instructions from the questions submitted to the Court, the Federal Minister for Finance; plaintiff considers it useful to refer to the following texts: 3. The German decrees on refunds had

JUDGMENT OF 15. 12. 1971 — CASE 21/71

broken. cient to guarantee that the goods are If the definitions and restrictions of the of high quality, that the pericarp has concept in question are adapted to been almost entirely removed and that modern needs and processes the best the two ends of the grain are suffi method (that is, the method which also ciently rounded, so that the traces of covers past events without infringing the embryo can no longer adhere in ex principle of legal certainty) appeared to cessive Quantities.' be that which adopts the ash content as The Commission of the European Com the criterion of classification; this was munities observe that, in the context of the method normally applied to the the application of the rules concerning wheat-based products referred to in refunds on exports of processed cereal headings 11.01 and 11.02 and which at products, the Einfuhr- und Vorratsstelle present appears at the beginning of für Getreide und Futtermittel only

be fulfilled. empowered, within the context of the Finally Brodersen proposed that the fol scheme of refunds established by Regu lowing replies be given to the questions lation No 19, at the national level to submitted by the Finanzgericht, Kassel: give, by means of definition adopted unilaterally, more precise particulars of The first question the common description of goods. This '(a) Hulled grains: barley ("geschliffen") question, which has not yet been settled are barley grains from which the by the case-law of the Court, must be bracts have been removed and considered in order to give a compre which have been hulled to the point hensive reply to the questions referred at which its ash content, expressed by the Finanzgericht. as a ratio of the dry material, does In this connexion the Commission ob not exceed 1.3%. serves that the common organization of (b) pearled grains of hulled barley ("ge the market in cereals, established by schält perlförmig geschliffen") are Regulation No 19, did not set up a

single internal market in the Community The Explanatory Notes to the Brussels but allowed the markets in the various Nomenclature regarding tariff heading Member States to continue to exist. In 11.02 define hulled grains ('geschälte particular, the rules on prices were not Getreidekörner') as grain from which the yet entirely centralized and this applies pericarp (the skin beneath the husk) has especially to refunds. Unlike the levies, been partially removed and, in the parti­ which were obligatory in nature, the cular case of grains of the bractiferous Community regulations concerning re­ varieties, as grains from which the husks funds simply gave States the power to (or hulls) have been removed (the husks grant refunds and fixed the maximum can be removed only by grinding since amounts thereof. In these circumstances they adhere too firmly to the grain there was nothing to prevent each State kernel to be separated by mere thresh­ from using its discretionary power and ing or winnowing). subject the refund to additional condi­ The Commission maintains that in the tions based on the quality of the pro­ technique of manufacture of hulled ducts. barley the term 'schleifen' describes the As regards the definition of the concepts normal process for barley, which goes of hulled barley grain in Community beyond mere husking and is intended law, the Commission observes that as to round the hulled grains from which the right to the refund claimed by the the bracts have been removed. Grains plaintiff in the main action is deter­ which have been ground three times mined by the legal position existing at are scarcely changed from their original the date of exportation, the concepts re­ elongated shape. Grains which have ferred to must be interpreted on the been ground six to eight times are semi- basis of the scheme of refunds applicable spherical in shape and become spherical on 29 June 1967. Annex A to EEC after being ground nine to twelve times. Regulation No 821/68, which estab­ The more the barley grains are ground, lishes criteria for distinguishing between the more of the pericarp is removed 'hulled grains' and 'pearled grains', is and the points on the barley grains, thus inapplicable in the present case. which were originally long, became As the scheme or refunds established by rounded off. As a result, the Explanatory Regulation No 19 again adopted without Notes to the Brussels Nomenclature

clearly that a product with a higher or fragments rounded by grinding also lower ash content may also be 'pearled'. form part of the same category. Moreover, there is no valid evidence for 2. "Hulled grains: barley" ("Getreide­ saying that pearled barley must not körner geschliffen, von Gerste") are show grooves and traces of embryo, as all other husked barley grains (from the groove or barley is generally too which the bracts have been removed) deep to disappear entirely, with the which has been ground. It is to be result that traces of embryo may remain. regarded as husked barley (from In conclusion, the Commission considers which the bracts have been re­ that the following answers must be moved). given to the questions submitted by the 5. The Member states were empowered order for reference: by virtue of the refund scheme 1. "Pearled grains: barley are husked established by Regulation No 19 to barley grains from which practically limit the grant of a refund on exports the whole pericarp has been removed to third countries to pearled barley by an intensive reducing process of a specific minimum quality and (grinding) and the two ends of to fix the qualitative characteristics which are rounded in shape. Grain therefor.'

Grounds of judgment

1 By order of 25 February 1971, received at the Court Registry on 27 April 1971, the Hessisches Finanzgericht requested the Court to give a preliminary ruling on the interpretation of the terms of 'Hulled grains: barley' and 'pearled grains: barley' appearing in heading 11.02 of the Common Customs Tariff.

5 Within the context of the optional export refunds provided for by the above- mentioned regulations the Member States were bound, in order to respect the maximum amounts allowed by those regulations, to regard as 'pearled barley' only those products which satisfied at least the conditions laid down by the Explanatory Notes to heading 11.02 in the document known as the 'Brussels Nomenclature'. Therefore, although when fixing the conditions for the grant of the refunds which they decided freely to award, the Member States were bound to observe a certain number of rules or principles which were necessary to the application of the general scheme laid down by Regu­ lation No 19, they had, on the other hand, the power to apply more restric­ tive criteria than those established by the Community rules. In particular, and without prejudice to the uniform scope of the concepts contained in the Common Customs Tariff, within the limited context of the regulations referred to above and to the extent to which they were free not to grant any export refund on pearled barley, the Member States were a fortiori em­ powered to limit this grant to types of this product which had additional characteristics to those required by the Community rules.

Costs

6 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable, and 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 Hessisches Finanz­ gericht, the decision as to costs is a matter for that court.

I. Within the context of the application of the scheme of optional refunds on exports of processed cereal-based products to third countries which is laid down in Article 20 of Regulation No 19/62 of the Council, Regulation No 141/64/EEC of the Council and Regulation No 60/66/EEC of the Commission, the Member States could only regard as 'pearled barley' those products which satisfied at least the conditions laid down by the Explanatory Notes to heading 11.02 in the document known as the 'Brussels Nomen­ clature'.

2. Within the context of the application of the abovementioned pro­ visions, the national authorities were entitled to add to those minimum requirements other more restrictive conditions.

Lecourt Mertens de Wilmars Kutscher

Dormer Trabucchi Monaco Pescatore

Delivered in open court in Luxembourg on 15 December 1971. A. Van Houtte R. Lecourt

Registrar President