C-49/76
ECLI:EU:C:1977:9
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JUDGMENT OF 26. 1. 1977 - CASE 49/76
In Case 49/76
Reference to the Court under Article 177 of the EEC Treaty by the Verwaltungsgericht Hamburg for a preliminary ruling in the action pending before that court between
GESELLSCHAFT FÜR ÜBERSEEHANDEL MBH, Hamburg,
and
HANDELSKAMMER HAMBURG,
on the interpretation of Article 5 of Regulation No 802/68 of the Council, concerning the 'origin' of goods,
THE COURT
composed of: H. Kutscher, President, P. Pescatore, President of Chamber, J. Mertens de Wilmars, M. Sørensen, Lord Mackenzie Stuart, A. O'Keeffe and G. Bosco, Judges,
Advocate-General: J.-P. Warner Registrar: A. Van Houtte
gives the following
JUDGMENT
Facts
The facts appertaining to the main I — Facts and procedure action, the order for reference and the written observations submitted under 1. For several years, the Gesellschaft fur Article 20 of the Protocol on the Statute Überseehandel mbH (Company for of the Court of Justice of the EEC may Overseas Trade Limited) (hereinafter be summarized as follows: referred to as 'the Company') has
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
imported casein, in the form of pieces No 802/68. It was however stated in the from the size of a pea to the size of a undertaking that it would be hazelnut, from the Soviet Union and reconsidered should new factors, such as from Poland. In its establishment in a decision of the Community or German Hamburg it grinds the imported product authorities acting in pursuance of their to different degrees of fineness, powers, later arise so as to justify a sometimes according to the preferences different interpretation of the provisions of its customers (screen sizes 30, 60 and of the aforesaid regulation. 90). The product is then sorted and packed. The casein thus treated is sold to By letter of 15 September 1975, the the different consumers. It is used in the Handelskammer did in fact withdraw its human and animal food industry, in the undertaking. It based its action on a manufacture of glues, colours and other communication from the Federal materials capable of being applied in the Minister of Food, Agriculture and form of a coating. Forestry, stating that the grinding, mixing and packing of casein could not From 1967 to June 1972, the Handels be considered as activities conferring a kammer (Chamber of Commerce), particular origin on the product and thus Hamburg, provided certificates of origin, giving it an origin in the country where in accordance with an undertaking to they took place. that effect, naming the Federal Republic of Germany as the country of origin of By decision of 21 January 1976, the the casein treated by the Company. Handelskammer rejected a new request made by the Company on 12 January Article 5 of Regulation No 802/68 of the 1976. On 18 March 1976, the Company, Council of 27 June 1968 on the having failed in the proceedings which common definition of the context of the followed, took the dispute to the origin of goods OJ English Special Verwaltungsgericht (Administrative Edition, 1968, p. 165) provides: Court) Hamburg.
'A product in the production of which By order of 28 May 1976, that court two or more countries were concerned decided to suspend its proceedings and shall be regarded as originating in the to refer the following question to the country in which the last substantial Court of Justice under Article 177 of the process or operation that is economically EEC Treaty: justified was performed, having been carried out in an undertaking equipped 'Is untreated casein obtained in a third for the purpose, and resulting in the country, which has been rendered fit for manufacture of a new product or use by being ground up in a Member representing an important stage of State of the EEC in the way described by manufacture.' the plaintiff it this action, to be regarded as originating in that Member State 2. In June 1972, the Handelskammer according to Article 5 of Regulation for the first time withdrew its (EEC) No 802/68 of the Council?' undertaking, but on 21 July 1972 it again undertook to continue to supply 3. A copy of the order for reference certificates of origin, on the ground that reached the Court on 8 June 1976. the operations carried out by the Company could be considered as the The Gesellschaft für Überseehandel operations carried out by the Company mbH, represented by Jürgen Gündisch, could be considered as the 'last ... Advocate, of Hamburg, the process ... economically justified' within Handelskammer, Hamburg, represented the meaning of Article 5 of Regulation by its Director, and the Commission of
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the European Communities, represented The production of raw casein on the one by its Legal Advisers, Trevor Townsend hand, and the grinding thereof on the and Manfred Beschel, submitted written other, are not normally carried out in a observations under Article 20 of the single process. At any rate such is the Protocol on the Statute of the Court of case for most countries other than the Justice of the EEC. Federal Republic of Germany. Since the quality of the casein produced is often Upon hearing the report of the mediocre, because production is sporadic Judge-Rapporteur and the views of the and concentrated over short periods, it Advocate-General, the Court invited the would not be an economic proposition Commission of the European for the producer undertakings to possess Comunities to produce, before 20 a modern mill in addition to drying November 1976, certain documents equipment. Those undertakings therefore concerning the opinion reached by the prefer to deliver the raw casein to other Committee on origin at its meetings on undertakings possessing their own mill. 17 and 18 December 1975 on the Furthermore, in many countries, such as treating or processing of raw casein. the USSR, there are not enough casein Those documents were lodged on 16 mills and the quality of the milling often November 1976 and the Court decided does not meet consumer needs. That is to open the oral procedure. why the USSR exports large quantities of unmilled casein. Finally, since casein is sold mainly in small quantities, there is II — Written observations sub no point in consumer's purchasing their mitted under Article 20 of own mill, for it would be impossible to the Protocol on the Statute redeem the costs of doing so, as they of the Court of Justice of would not use it enough. the EEC
A — Observations submitted by the The Company concludes that the Gesellschaft fur Überseehandel operations described above, in particular the grinding, constitute a 'substantial' As regards the facts, the Company states process or operation that is 'economically in particular as follows: justified' within the meaning of Article 5 of Regulation No 802/68. In support of Raw casein, which is obtained from curds this conclusion it produces the answers which are washed, pressed and then given by many customers to the dried, comes in the form of fragments questions which it put to them on 28 from the size of a pea to the size of a May 1976 on: (a) the circumstances in hazelnut. Those pieces are not soluble in which the processing and grinding of the water and cannot be used. It is in that casein is carried out; (b) the form that the Company receives the consequences to be drawn from those product, which it then subjects to circumstances in determining the origin cleaning, grinding or pulverizing into of the ground casein, having regard to particles calibrated at 30, 60 or 90 units, Regulation No 802/68 of the Council. and to quality inspection and the necessary grading. In many cases, the As regards the legal position, the casein is ground to specifications Company next observes that it is not supplied by the customers and put up in disputed in this case that two of the four packages according to its state. The requirements that must, under Article 5 process described above, particularly the of Regulation No 802/68, be met if the grinding, is absolutely necessary for using treating of the product is to confer a the casein. After this operation, it is particular origin upon it are fulfilled by soluble under the influence of certain the operations at issue. Therefore the chemical substances. present proceedings are only concerned
GESELLSCHAFT FUR UBERSEEHANDEL v HANDELSKAMMER HAMBURG
with the question whether those When an original product is transformed operations also satisfy the other two by a process comprising several stages, requirements of the said Article 5, that is each stage of operation constitutes a stage to say: of manufacture at the same time. In so (a) whether the treating of the raw far as an operation upon a product is, at a product by the Company constitutes given stage, of a 'substantial' nature, that a 'substantial' process or operation, stage of manufacture is 'important'. (b) resulting in the 'manufacture of a new product or representing an Since the treatment or processing of the important stage of manufacture'. casein carried out by the Company is indeed of a 'substantial' nature within the (a) As to the first point, it appears from meaning of Article 5 of Regulation No the text of Article 5 of Regulation No 802/68 (see above), it must necessarily be 802/68 that the word 'substantial' is, in concluded that those activities are at the semantic terms, similar to the words same time 'an important stage of 'economically justified'. Therefore its manufacture' for the purposes of that meaning should be assessed with regard provision. to the economic justification for the operation or process. An 'economically The Company then deals with the weight justified' operation or process can, in to be given to the opinion expressed in cases of doubt, also be considered as December 1975 by the Committee on 'substantial'. Origin set up under Articles 12 and 13 of Regulation No 802/68, according to An interpretation based on the spirit and which the grinding of casein is neither object of the said Article 5 would lead to an operation nor a process for the the same result.
Given that the treating purposes of Article 5 of Regulation No or processing of products implies an 802/68. Taking into account the economic process, the question whether composition of that committee and the those operations are of a substantial powers conferred upon it by Article 13 of character or not can only be defined in the same regulation, the opinions of the terms of the economic importance of Committee on Origin cannot be that process. Therefore an 'economically considered as measures capable of justified' operation or process and a involving an amendment to or an official 'substantial' operation or process are interpretation of Regulation No 802/68 almost synonymous concepts. or of any regulation implementing it.
As long as the Commission has not adopted Since, therefore, the economic a legally binding definition of the justification for the operation or process question of the origin of ground casein, carried out by the Company is not the declarations of the Committee on contested by the Handelskammer, there Origin have no binding effect. Nor can can be no denying that those activities they be assimilated to the explanations are 'substantial'. and to the opinions on tariffs provided for in the Convention on Nomenclature (b) As for the second point, the very for the Classification of Goods in fact, mentioned above, that the grinding Customs Tariffs, which the Court of of the casein is essential if the product is Justice has considered as decisive criteria to be used shows that the activities under for the interpretation of the different discussion represent 'an important stage provisions of the Common Customs of manufacture', within the meaning of Tariff. On the contrary, the declarations Article 5 of Regulation No 802/68. It is made by the Committee on Origin have not necessary, for this purpose, for no evidential value because ground casein to be regarded as a new representatives of the Member States product as compared with raw casein. alone sit on the committee and the
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Community undertakings concerned are characteristics. The fact that the goods not heard. Such is indeed what happened can only be put to commercial use in the in the present case, for the Company had altered form is not relevant because the
no opportunity of expressing its views 'substantial' nature of a person or before the abovementioned opinion was operation is necessarily linked to the adopted, and had no means of kind and to the attributes of the process ascertaining how the committee obtains or operation. From this point of view, the its information on the various methods grinding of casein carried out by the of operating or of processing or on the Company is solely comparable to turning economic justification for them. sugar into lump sugar, to crushing blocks of granite and so on. On the basis of these observations, the Moreover the two conditions mentioned Company claims that the Court should answer the question referred to it as above are closely linked with each other in the sense that where there is no follows: 'substantial process or operation' then as 'Casein obtained in a third State and a general rule it is also the case that the which has been rendered fit for use by activities in question do not result in a pulverization in a Member State of the new product or in an important stage of European Communities according to the manufacture. In the present case, common sense runs counter to the process described by the plaintiff in the main action, has its origin in that notion that the milling of casein results Member State according to Article 5 of in such a product or represents such a Regulation No 802/68 EEC of the stage. Council'. The Handelskammer considers that the following facts are 'significant pointers' B — Written observations submitted in favour of its argument: by the Handelskammer, Hamburg — As regards the various preferential agreements to which the Federal The Handelskammer, Hamburg, refers Republic of Germany is party, the to its pleadings in the main action, milling of casein does not bring particularly those of 21 January 1976 and about any change in the tariff 5 May 1976, which were lodged with the classification of that product, such Court as an annex to the order for classification being decisive, reference. according to the national rules implementing the said agreements, It admits that the grinding of the casein for the grant of a marketing meets two of the four requirements certificate. under Article 5 of Regulation No 802/68: — Nor is casein mentioned in the lists it takes place in an 'undertaking annexed to those agreements among equipped for the purpose' and is the operations or processes which, 'economically justified'. However, the although not bringing about a change treatment to which the Company in tariff classification, are of such a subjects the product does not constitute a nature as to confer a particular origin 'substantial process or operation' within on the product (cf. for example the the meaning of the aid article and does agreement made with the State of not result in the 'manufacture of a new Israel, in OJ 1975, L 136, p. 169). product' or represent 'an important stage of manufacture'. C — Written observations submitted by the Commission of the EEC That treatment consists of activities which only alter the external aspect of The Commission of the EEC first makes the goods and do not affect its substantial certain remarks of a general order on the
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
significance and the fundamental content concluded that the opinions submitted of the provisions of Community law by the two bodies have the same legal governing the matter. In doing so it status. In its case-law, the Court has points out that the provisions of considered the opinions submitted on Regulation No 802/68 establishing the tariff matters by the Committee on criteria to be applied in determining the Common Customs Tariff Nomenclature origin of goods, that is to say their as an important factor to be taken into economic link with a particular country, account in interpreting the tariff.
In the are provisions arising exclusively under light of these considerations and having Community law. It follows both from the regard to the subject-matter of the nature and from the purposes of those question referred to the Court, it would provisions that they must apply in the therefore be useful if the Court could same manner in all the Member States. also express its view in this case on the Therefore the latter are not entitled to status of the opinions of the Committee draw up unilaterally binding rules of on Origin. interpretation within the field covered by
the regulation. In addition to Regulation No 802/68, other texts, namely agreements However, although, within that field, the concluded between the Community and power of the national authorities is thus third countries, contain provisions on the considerably limited, there can be no origin of goods. However, those denying that a uniform interpretation of provisions cannot be considered as the Regulation No 802/68 is difficult to application of the general principles achieve both because in some Member contained in Regulation No 802/68. States the enforcement of the regulation First, Regulation No 802/68 itself is in the hands of a large number of expressly says in Article 2 that its public bodies, and because of the new provisions shall not affect the special products and processes which make their rules concerning trade, such as those
appearance. Given these circumstances, appearing in the said agreements. and for the very purpose of ensuring that Secondly, the said rules exist only for the the provisions of Regulation No 802/68 specific purposes of the agreements in shall be applied uniformly, Article 12 et which they appear, and are therefore seq. provide for the setting up of a more restrictive than the general Committee on Origin, whose task is to provisions adopted by the Community. prepare the provisions necessary for applying the regulation or to submit From the fact that the agreements and opinions on certain questions. conventions mentioned above are to a large extent concerned with the way in The committee has submitted an opinion which goods are to be treated for tariff concerning the treatment of casein. Such purposes, it may be deduced that the an opinion, although it does not have provisions on origin contained in them direct legal effect, constitutes an are all directly connected with the important factor in interpreting the Common Customs Tariff.
As regards that provisions of Regulation No 802/68 on tariff, there is applied the general the origin of goods. By reason of its principle that a change in the tariff purpose, its constitution, its composition, classification of goods, resulting from an and its method of working, the operation or process, has the result that Committee on Origin is in every way those goods originate in the country similar to the Committee on Common where the operation or process takes Customs Tariff Nomenclature.
The place. wording of the provisions setting up the two committees and defining their tasks There are, however, exceptions to this is identical. From this it may be principle, the Common Customs Tariff
JUDGMENT OF 26. 1. 1977 - CASE 49/76
having been organized according to The requirements mentioned at (b) and criteria peculiar to itself and not in order (c) are satisfied in the present case, but to determine the origin of goods. This is various difficulties emerge as regards why the said agreements normally have requirements (a) and (d). In order to appended to them lists of the activities clarify the scope of the latter two involving a process or operation which, requirements, the Commission first while bringing about a new tariff mentions the cases in which some of its classification, do not confer a particular regulations have given a clear answer to origin on the goods (list A) or which, the question of what factors may be conversely, while not bringing about a taken as the basis for the proposition that change in tariff heading, confer a the said requirements are met. For these particular origin on the goods (list B). In purposes, it mentions cases in which the the context of this system, the grinding existence of a 'substantial' process or of casein cannot be considered as operation has, or has not, been accepted, conferring a particular origin on that and in which an activity has been product. The tariff classification of casein recognized as resulting in the does not change (at subheading 35.01 of manufacture of a new product, or as an the Common Customs Tariff), but it is important stage of manufacture. not included in list B as one of the operations which confer a particular Secondly, the Commission mentions the origin. Furthermore, since the general cases on the application of Article 5 of provisions of Regulation No 802/68 Regulation No 802/68 in respect of recognize the fundamental importance of which the Committee on Origin has the determination of origin for applying submitted an opinion. More particularly, the Common Customs Tariff, the fact it points out that at its meeting on 17 that the tariff classification of casein and 18 December 1975, the committee remains unchanged leads to the view that in fact adopted an opinion to the effect activities involving a process or operation that the following processes and carried out by the Company dp not operations do not confer a particular confer any particular origin on the origin on the product treated: ground casein. This conclusion is also — very fine milling or pulverizing confirmed by the fact that certain (screen sizes 30, 60 or 90) in a mill of regulations in implementation of foreign unground or roughly ground Regulation No 802/68 consider a tariff casein; change as a decisive criterion in — indispensable quality control carried determining origin. out by grading at the same time as the milling; Passing next to a more particular — replacement ot the packing of the examination of the question referred, the foreign casein by a new packing Commission notes first of all that adapted to the very finely ground according to Article 5 of Regulation No casein. 802/68, four requirements must be met simultaneously in order that a process or The committee maintained that opinion operation applied to a product shall at its meeting on 22 and 24 June 1976, confer a particular origin upon it. The taking into account the observations process or operation must: made by the Company on 24 February (a) be substantial; 1976.
(b) be 'economically justified; (c) have been carried out in an under Finally, the Commission mentions a taking equipped for the purpose; number of cases met with by the national (d) have resulted in the manufacture of a authorities of the Member States new product or represent an concerning the grant of certificates of important stage of manufacture. origin, and which, so far as it is aware,
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
are in line with a general and undisputed Conversely, the criteria 'manufacture of a practice in this matter. Such cases new product' or 'important stage of support a clear finding that the national manufacture' express more of a 'static' authorities have not considered the point of view since they involve making milling of casein as an operation some sort of comparison between the conferring a particular origin on the product as it was before the process and product. the one obtained after it. If upon making
that comparison it can be said that there Taking these considerations into account, is a significant qualitative change, it is the Commission is of the opinion that it possible to speak of an 'important stage is not possible to draw up a rule which is of manufacture'. If the change is such general and at the same time precise on that the original properties of the the question of when a process or product have disappeared, there is a 'new operation must be considered as product'. 'substantial' and when it results in the 'manufacture of a new product' or Such being the position, it can be stated, represents 'an important stage of at least as regards industrial production manufacture'. In determining origin, it is and craftsmanship, that simple mechanical or manual activities carried necessary to take into account in particular the characteristics of the out on a product generally do not suffice product itself or of a group of products. to fulfil the requirements of a 'substantial Moreover, it must not be forgotten that process or operation'. For this purpose,
technical and economic progress either the process should be of a certain constantly face us with different methods complexity, or very special skills should of production which cannot be assessed be necessary in order to apply it. In addition, account should be taken of the according to the criteria currently in force. significance of the activity as such from the point of view of the production process as a whole, though not as an Although it is true that there is a certain indispensable condition, but having connexion between the two criteria in regard to its importance in the question: 'substantial process or manufacturing process in terms of operation' on the one hand, and quantity and quality. 'manufacture of a new product' or 'an important stage of manufacture' on the As regards the milling of casein, first it other, it nevertheless remains a fact that represents nothing other than a simple it is possible for a substantial process not mechanical operation, similar in every to result in a new product or not to way to the milling and crushing carried represent an important stage of out on other material of varying manufacture.
The two criteria represent hardness, and which indisputably do not two different elements for assessing represent a substantial process or processing. operation. In addition, it would not appear that the significance of that The criterion 'substantial process or operation in the process of manufacture operation' expresses a 'dynamic' point of is such as to render it 'substantial'. view, because in order to decide whether processing is substantial, it is necessary to The way in which the production of examine whether that activity as such casein is described in specialized works plays an important part in the confirms this assessment.
In many cases, production as a whole. As regards this, the activity in question is not even the question whether such an activity is mentioned. The fact that the said activity indispensable to putting the product to is associated with others (cleaning, its final economic use is not decisive. grading, packing) does not alter this
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analysis in any way, for those activities the production and printing of textiles, are mere preliminaries to packing. the manufacture of powdered egg yolk, etc. which, it claimed were analogous in Secondly, the grinding of casein does not every way to the processing of raw casein, lead to the 'manufacture of a new and which, it alleged, had been product', because it does not alter the considered as constituting a substantial physico-chemical composition of the operation or process. casein in any way. It is only the external aspect of the product that is affected. It also argued that the soundness of its Nor, moreover, since the substantial argument was confirmed by the attitude characteristics typical of casein are not adopted in the past by the changed at all by the grinding which Handelskammer, Hamburg, which had therefore does not bring about any for several years issued certificates of significant qualitative change in the origin on the basis of the contested product, is it possible to speak of an operation on casein. 'important stage of manufacture'. The Handelskammer objected that in the The Commission thus concludes that the Federal Republic of Germany and in Committee on Origin correctly other Member States, such as the interpreted Community law governing Netherlands, the classifying, for the the matter in its opinion of 17 and 18 purposes of article 5 of Regulation No December 1975 and of 22 and 24 June 802/68, of the activities whereby raw 1976. It suggests that the Court should casein is treated has for long constituted answer the question referred to it as a difficult and complex problem. follows: The Commission of the European 'The grinding, cleaning, grading and Communities stressed, amongst other packing, performed in a Member State of matters, the fact that opinions adopted the Community, of unground casein by the Committee on origin were not imported into the Community from a binding, and emphasized that it was third country do not confer a community necessary and appropriate to dispose of origin on the casein thus treated under the matter by a judicial decision of the Article 5 of Regulation No 802/68 of the Court.
Council, because the said operations do not represent a substantial process or In answer, moreover, to two questions operation, do not result in the put by the Court, the Commission stated manufacture of a new product and do not that it felt that it could support the represent an important stage of opinion of the said Committee in the manufacture'. present case.
Furthermore, since casein imported into III — Oral procedure the Federal Republic of Germany from third countries is in free circulation as The oral observations of the Gesellschaft regards intra-Community trade, the für Überseehandel mbH, the certificates of origin at issue are only Handelskammer, Hamburg, represented necessary in order to export the casein to by Herbert Flohr, and the Commission third countries which require those of the European Communities were certificates for the purpose of made at the hearing on 1 December importation. 1976. The Advocate-General delivered his The Gesellschaft für Überseehandel opinion at the hearing on 12 January mentioned a number of cases, such as 1977.
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
Law
1 By order of 28 May 1976, which reached the Court on 8 June 1976, the Verwaltungsgericht Hamburg has referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty a question on the interpretation of Article 5 of Regulation No 802/68 of the Council of 27 June 1968 on the common definition of the concept of the origin of goods (OJ English Special Edition, 1968, p. 165).
More particularly, the national court asks the Court of Justice to say whether untreated casein obtained in a third country, which has been rendered fit for use by being ground up in a Member State of the EEC in the way described by the Gesellschaft für Überseehandel is to be regarded as originating in that Member State according to Article 5 of Regulation (EEC) No 802/68 of the Council.
2 The question has arisen in a dispute concerning the refusal of the Handelskammer, Hamburg, to issue to the Gesellschaft für Überseehandel certificates stating for the purposes of Regulation No 802/68 that the Federal Republic of Germany is the country of origin of the casein treated by the said undertaking.
It appears from the file in the main action that in the establishments of the Gesellschaft für Überseehandel, raw casein is cleaned, ground to various degrees of fineness, graded and then appropriately packaged.
The Handelskammer explained as the reason for its refusal that the cleaning, grinding, grading and packing of the raw casein did not constitute activities conferring a particular origin on the product, according to Article 5 of Regulation No 802/68 of the Council of 27 June 1968.
3 Article 5 of Regulation No 802/68 provides:
'A product in the production of which two or more countries were concerned shall be regarded as originating in the country in which the last substantial process or operation that is economically justified was performed, having been carried out in an undertaking equipped for the purpose, and resulting in the manufacture of a new product or representing an important stage of manufacture.'
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It appears from the order for reference that it is not denied that, in accordance with the said provision, the process or operation to which the raw casein is subjected in this case constitutes an activity 'carried out in an undertaking equipped for the purpose', and that it is 'economically justified' because it is necessary for the industrial use of the product.
Thus, the dispute is concerned in essence with the question whether the said activity constitutes a 'substantial' process or operation for the purposes of Article 5 of Regulation No 802/68, resulting in 'the manufacture of a new product' or representing 'an important stage of manufacture'.
It is therefore in respect of this question that an answer should be given to the national court.
4 Although the Court has no jurisdiction under Article 177 of the EEC Treaty to apply the provision of Community law to actual cases, it may nevertheless furnish the national court with the interpretative criteria necessary to enable it to dispose of the dispute.
5 According to the last recital in the preamble to Regulation No 802/68 and to Article 1 of that regulation, a common definition of the concept of the origin of goods constitutes an indispensable means of ensuring the uniform application of the Common Customs Tariff, of quantitative restrictions and of all other measures adopted, in relation to the importation or exportation of goods, by the Community or by the Member States.
For those purposes, Articles 4 and 5 of the regulation base such a definition on objective criteria, making it possible to ensure the uniform application in all the Member States of the concept of the origin of goods and thus to avoid deflections of trade and abuses.
In particular, there can be seen in Article 6 of the regulation the intention to prevent the origin of goods in the production of which two or more countries are concerned from being determined by way of a non-substantial process or operation in such a manner as to defeat the purposes of Article 1 or to circumvent the measures adopted by the Member States in relation to importation or exportation.
In these circumstances, it would not seem sufficient to seek criteria defining the origin of goods in the tariff classification of the processed products, for
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
the Common Customs Tariff has been conceived to fulfil special purposes and not in relation to the determination of the origin of products.
On the contrary, in order to meet the purposes and requirements of Regulation No 802/68, the determination of the origin of goods must be based on a real and objective distinction between raw material and processed product, depending fundamentally on the specific material qualities of each of those products.
6 Therefore, the last process or operation referred to in Article 5 of the regulation is only 'substantial' for the purposes of that provision if the product resulting therefrom has its own properties and a composition of its own, which it did not possess before that process or operation.
In providing that the said process or operation must, in order to confer a particular origin, result in the manufacture of a new product or represent an important stage of manufacture, the abovementioned Article 5 shows in fact that activities affecting the presentation of the product for the purposes of its use, but which do not bring about a significant qualitative change in its properties, are not of such a nature as to determine the origin of the said product.
7 The grinding of a raw material such as raw casein to various degrees of fineness cannot be considered as a process or operation for the purposes of Article 5 of Regulation No 802/68, because the only effect of doing so is to change the consistency of the product and its presentation for the purposes of its later use; it does not bring about a significant qualitative change in the raw material.
Furthermore, the quality control by grading to which the ground product is subjected and the manner in which it is packaged relate only to the requirements for marketing the product and do not affect its substantial properties.
8 In its opinions expressed at its meetings of 17 and 18 December 1975 and of 22 to 24 June 1976, the Committee on Origin set up under Article 12 of Regulation No 802/68 has found that the grinding to different degrees of fineness, the sorting and packaging of casein do not constitute activities
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involving a process or operation conferring on the product resulting from those activities a particular origin for the purposes of the said regulation.
Although opinions expressed by the Committee are not binding, except in so far as the Commission has adopted implementing provisions in application of Article 14 (3) (a) of Regulation No 802/68, nevertheless, until such time as the Commission adopts contrary provisions under subparagraphs (b) and (c) of the said Article 14 (3), they constitute an important criterion for interpreting Article 5 of the said regulation, the scope of which they define in respect of specific cases.
9 It is therefore to be concluded that the cleaning and grinding of a raw material, such as raw casein imported from a third country into a Member State, together with the grading and packaging of the product obtained, do not constitute a substantial process or operation for the purposes of Article 5 of Regulation No 802/68, and do not confer a Community origin on the said product, according to that regulation.
Costs
10 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable.
As these proceedings are, in so far as the parties to the main action are concerned, a step in the action pending before the national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT
in answer to the question referred to it by the Verwaltungsgericht Hamburg by order of 28 May 1976, hereby rules:
The cleaning and grinding of a raw material, such as raw casein imported from a third country into a Member State, together with the grading and packaging of the product obtained, do not constitute a substantial process or operation for the purposes of
GESELLSCHAFT FÜR ÜBERSEEHANDEL v HANDELSKAMMER HAMBURG
Article 5 of Regulation No 802/68, and do not confer a Community origin on the said product according to that regulation.
Kutscher Pescatore Mertens de Wilmars
Sørensen Mackenzie Stuart O'Keeffe Bosco
Delivered in open court in Luxembourg on 26 January 1977.
A. Van Houtte H. Kutscher
Registrar President
OPINION OF MR ADVOCATE-GENERAL WARNER
DELIVERED ON 12 JANUARY 1977
My Lords, all cases where such certification is required by the authorities of the This case comes to the Court by way of a importing countries, in particular where reference for a preliminary ruling by the advantages derive from that certification'. Verwaltungsgericht of Hamburg. The It goes on to record that there is no question it raises, shortly stated, is international definition of the concept of whether casein which has been imported the origin of goods and to point out the from the Soviet Union in the raw state necessity of drawing up, on the subject, and has been cleaned, ground, graded rules common to all the Member States. and re-packed in Hamburg is a product It then states that 'goods produced of Soviet origin or of German origin. The wholly in a particular country and not question is one of interpretation of containing products imported from other Council Regulation (EEC) No 802/68 countries are to be considered as of 27 June 1968 'on the common originating in that country,' but that definition of the concept of the origin of 'the manufacture of any one product goods'. (OJ L 148 of 28. 6. 1968). tends increasingly to be carried out by undertakings located in different The preamble to the Regulation explains countries;' that 'it must therefore be that 'Member States have to determine or determined which of those countries is to verify the origin of imported goods be considered as the country of origin of whenever application of the Common the product in question;' and that 'there Customs Tariff, of quantitative re are good grounds for accepting as the strictions or of any other provisions country of origin that in which the last applicable to trade so requires and also substantial process or operation that was to 'certify the origin of exported goods in economically justified was performed'.