C-169/80

o n the interpretation of certain tariff headings of the C o m m o n C u s t o m s Tariff concerning t h e classification of French E m m e n t a l e r cheese a n d of certain regulations o n the c o m m o n organization of the m a r k e t in milk and milk p r o d u c t s ,

T H E C O U R T (Third chamber)

composed of: L o r d M a c k e n z i e Stuart, President of C h a m b e r , A. Touffait and U . Everling, J u d g e s ,

Advocate G e n e r a l : Sir G o r d o n Slynn Registrar: H . A. Rühi, Principal Administrator

gives the following

JUDGMENT

registered office in Aix-les-Bains, importers and notices to exporters Gondrand Frères SA, a company having published in the Official Journal of the its registered office in Paris, made 64 French Republic that there may be only export declarations relating to French one tariff heading for the import and the Emmentaler cheese exported to Belgium export of a specified, classified product and Italy during the periods from and that, on the other hand, tariff 12 August to 24 September 1974, heading 04.04 A I applies to Emmentaler 20 January to 28 April 1975 and 27 cheese whether or not the cheese was March to 24 September 1976. The originally imported from non-member declarations referred to tariff subheading countries. 04.04 A I of the Common Customs Tariff which, during the periods in On 11 September 1978 the customs question, was not subject to the authorities instituted an appeal in application of monetary compensatory cassation against the judgment of the

January 1975 to 28 April 1975 and 27 March 1976 to 24 September 1976 under either tariff heading 04.04 A I or tariff Gondrand Frères SA contested this order heading 04.04 A II". by the customs authorities and sought indemnity from Garancini SA. By judgment of 9 February 1978 the 2. (a) The monetary compensatory Tribunal d'Instance [District C o u r t ] / amounts which are to be levied or Nantua, declared the objection to be granted either on importation from well-founded, held the order to be null Member States or non-member countries and void and dismissed Garancini SA or on exportation to Member States or from the action. On appeal brought by non-member countries are fixed for each the customs authorities, the Cour Member State concerned by Commission d'Appel [Court of Appeal], Lyon, upheld regulations adopted in implementation of that judgment by decision of 28 June Regulation No 974/71 of the Council of 1978 on the ground that it followed from 12 May 1971 on certain measures of Community rules and the notices to conjunctural policy to be taken in

agriculture following the temporary numbers contained in Annex II to Regu- widening of the margins of fluctuations lation N o 823/68 of the Council of for the currencies of certain Member 28 June 1968 determining the groups of States (Official Journal, English Special products and the special provisions for Edition 1971 (I), p. 257). calculating levies on milk and milk products (Official Journal, English Those regulations refer to the numbering Special Edition 1968 (I), p. 199). in the Common Customs Tariff, adding in certain instances a specific description The tariff description in subheading of the goods. In the present case 04.04 A I is also followed by a footnote reference is merely made to tariff sub- which states that: heading 04.04 A II (without any specific description). Tariff subheading 04.04 A I "Inclusion under this tariff subheading is of the Common Customs Tariff is subject to conditions to be laid down by however nowhere mentioned amongst the competent authorities". the headings subject to the application of monetary compensatory amounts. Regulation N o 823/68, which was adopted in implementation of Article 14 (6) of Regulation N o 804/68 of the (b) During the periods in question the Council of 27 June 1968 on the common tariff subheadings of the Common organization of the market in milk and Customs Tariff which are at issue were milk products, (Official Journal, English worded as follows: Special Edition 1968 (I), p. 176) gives in Annex II the tariff description of the "04.04 Cheese and curd milk products which are divided into groups in Annex I. A. Emmentaler, Gruyère, Sbrinz, Bergkäse and Appenzell, not grated or Regulation No 1053/68 of the powdered: Commission of 23 July 1968 defining the conditions for the admission of certain I. Of a minimum fat milk products to certain tariff headings content of 4 5 % by (Official Journal, English Special Edition weight, referred to dry 1968 (II), p. 332), which was adopted in matter, matured for at implementation of Article 14 (7) of least three months . . . Regulation No 804/68, provides, in Article 1 thereof, that: II. Others . . . " "the admission of products from third The tariff description in subheading countries to subheadings . . . 04.04 A I 04.04 A I is followed by a reference to a . . . listed in Annex II to Regulation footnote which states : (EEC) N o 823/68 shall be subject to the production of a certificate which satisfies at least the requirements laid down in "Entry under this subheading is subject this regulation". to conditions to be determined by the competent authorities". Article 6 (1) of the same regulation provides that (c) For the periods in question the wording of the relevant subheadings of "a certificate shall be valid only if duly the Common Customs Tariff is identical authenticated by an agency appearing on to that of the subheadings with the same a list to be determined".

Regulation No 1054/68 of the its written observations that it does not Commission of 23 July 1968 determining appear from any Community legislation, the list of agencies certifying the in particular from Regulations Nos admissibility to certain tariff headings of 804/68, 823/68, 1053/68 and 1054/68, certain milk products from third that during the periods in issue the countries (Official Journal, English cheese in question was subject to Special Edition 1968 (II), p. 338), also monetary compensatory amounts on adopted in implementation of Article 14 exportation from France to Belgium or (7) of Regulation No 804/68, contains in Italy. the annex thereto the list of the issuing agencies in certain non-member countries which are referred to in Article 6 (1) of Regulation No 1053/68. Regulation No 804/68 is concerned essentially with the system of trade with non-member countries and does not deal 3. The judgment making the reference with monetary compensatory amounts. was received at the Court Registry on The same also applies to Regulation 23 July 1980. No 823/68, which was adopted in implementation of Regulation No 804/68 and which has as its purpose the In accordance with Article 20 of the calculation of levies in the sector in Protocol on the Statute of the Court of question. So far as tariff heading 04.04 is Justice of the EEC, written observations concerned, Annex II to that regulation were submitted by Gondrand Frères SA, repeats the definitions in the Common the defendant in the cassation pro- Customs Tariff. Thus both Regulation ceedings, represented by J. Budin, G. No 804/68 and Regulation No 823/68 Descorps-Declère and F. Girard, fix the levies, that is to say, the amount Advocates at the Cour d'Appel, Paris, which shall be charged by each country and by the Commission of the European in the Community importing milk or Communities, represented by F. milk products from non-member Lamoureux, a member of its Legal countries on the entry of the goods into Department, acting as Agent. Community territory. They are not, however, concerned with intra- Community exports such as the export of On hearing the report of the Judge- Emmentaler cheese to Belgium or Italy. Rapporteur and the views of the Advocate General, the Court decided, by order of 3 December 1980, to assign the case to the Third Chamber in accordance with Article 95 of the Rules Regulation No 1053/68 provides that the of Procedure and to open the oral admission of certain products, including procedure without any preparatory amongst others those falling within sub- enquiry. heading 04.04 A I, from non-member countries is subject to the production of a certificate. Those certificates, a pro- forma of which is to be found in the annex to that regulation, must II — W r i t t e n o b s e r v a t i o n s accompany the goods when they enter the Community. The regulation does not, however, govern intra-Community 1. Gondrand Frères SÄ, the respondent exports such as those in the present case. in the cassation proceedings, submits in Finally, Regulation No 1054/68 specifies

the agencies in non-member countries application or non-application of com- only which issue or authenticate the pensatory amounts in this case depends certificates accompanying goods in- on the answer to be given since only tended for entry into the Community. It products falling within tariff subheading is not concerned with French agencies. 04.04 A I I and not those falling within As with the Community rules, French tariff subheading 04.04 A I are subject to legislation in this matter has always monetary compensatory amounts. The provided for a zero monetary Commission considers tnat the exports in compensatory amount for tariff sub- question fall within subheading 04.04 heading 04.04 A I. A I I and are therefore subject to the application of compensatory amounts. That is the result of the provisions relating to the organization of the Consequently, the French authorities are market in milk. mistaken in considering that tariff sub- heading 04.04 A I applies only to imports of the cheese in question. In fact, in customs law any given goods may only Entry under tariff subheading 04.04 A I, be of one kind, that being the legal the tariff description of which appears in definition of their true nature. The Annex II to Regulation N o 823/68, is Communities adopted the nomenclature linked to compliance with a Community of the 1950 Brussels Convention for all minimum free-at-frontier price, to a provisions of Community law and not specific levy and, by virtue of the merely for the application of the footnote, to production of the certificate Common Customs Tariff. More parti- required by Regulation N o 1053/68. cularly, for the agricultural sphere, the That certificate, which is to be issued by specifications are always the same the exporting country, must confirm that whether levies, refunds or monetary the exported product conforms to the compensatory amounts are involved. description of the goods in question and that the free-at-frontier price has been complied with. It appears from the provisions on the matter that subheading Contrariwise, there is no identity of 04.04 A I is confined to Emmentaler character between levies and refunds cheese imported subject to certain on the one hand and monetary conditions whereas both imports of compensatory amounts on the other, the Emmentaler cheese which do not satisfy latter being governed by Regulation No those conditions and exports of 974/71 and the regulations adopted in Emmentaler cheese, irrespective of implementation thereof. whether the country of destination is a Member State or a non-member country, fall within subheading 04.04 A II.

"This subheading covers only "green rate". In fact, the free-at-frontier Emmentaler, Gruyère, Sbrinz, Bergkäse price to which cheese imported under and Appenzell accompanied by a certi- tariff heading 04.04 A I must conform ficate recognized by the competent auth- and the specific levy are expressed in orities. If this condition is not fulfilled, European Currency Units. As the sum of they are classified in subheading 04.04 the free-at-frontier price and the levy A II." converted into national currency with the use of the green rate already allows the price of cheese imported from certain non-member countries to be balanced with the threshhold price calculated in national currency, the application of The special rule on entry to certain tariff monetary compensatory amounts in such positions, which in this case results cases ~would have no effect on the level in the exceptional situation whereby of the Community price. Emmentaler cheese falls within different headings depending upon whether it is imported or exported, is justified, as appears from the last recital in the In conclusion, the Commission suggests preamble to Regulation No 823/68, by that the following answer be given to the the need to observe the Community's question asked: international commitments in the matter, since the products in question have been bound under GATT, which results parti- cularly in the application of a reduced "French Emmentaler cheese exported to levy. Italy and Belgium during the periods from 12 August to 24 September 1974, 20 January to 28 April 1975, and 27 March to 24 September 1976 falls within tariff subheading 04.04 A II."

3 It is apparent from the file that Gondrand, acting as customs agent on behalf of the cheesemongers Garancini, made in respect of the said periods a number of export declarations referring to subheading 04.04 A I of the Common Customs Tariff which did not attract monetary compensatory amounts for the relevant periods. Since they at first took the view that the cheese did in fact fall within that subheading the customs authorities in accordance with the customs opinions published in the Official Journal of the French Republic did not claim monetary compensatory amounts on export. On 8 April 1977 the customs authorities made an order, which was immediately enforceable, against Gondrand for what was then alleged to be due as monetary compensatory amounts on the exports, since the authorities then took the view that exports of French Emmentaler cheese to other countries of the Community fell within subheading 04.04 A II under which monetary compensatory amounts were payable for the relevant periods.

4 The Chambre Commceriale of the Cour de Cassation took the view that the proceedings depended upon the classification of the goods in question and referred the following question to the Court for a preliminary ruling on "the application of Community Regulations Nos 804/68, 823/68, 1053/68 and 1054/68 to the classification of French Emmentaler cheese exported to Italy

ADMINISTRATION DES DOUANES ν GONDRAND FRÈRES

and Belgium during the periods from 12 August to 24 October 1974, 20 January 1975 to 28 April 1975 and 27 March 1976 to 24 September 1976 under either tariff heading 04.04 A I or tariff heading 04.04 A II".

II. Others . . . "

JUDGMENT OF 9. 7. 1981 — CASE 169/80

8 The tariff description in subheading 04.04 A Iis followed by a reference to a footnote which states :

"Entry under this subheading is subject to conditions to be determined by the competent authorities".

9 It is not denied that the cheeses in question satisfy the characteristics referred to in subheading 04.04 A Ibut no condition as mentioned in the footnote has been specifically determined either in the Common Customs Tariff or in the rules relating to monetary compensatory amounts.

10 Nevertheless Regulations Nos 1053/68 and 1054/68 of the Commission of 23 July 1968 (Official Journal, English Special Edition 1968 (II), pp. 332 and 338)), adopted as part of the common organization of the market in milk and milk products, provide that the admission of products from non-member countries to subheading 04.04 A I for the purpose of the application of Regu- lation No 823/68 shall be subject to the production of a certificate issued by the agencies of certain non-member countries, a list of which is annexed thereto.

1 4 Nevertheless, for the purpose of calculating the monetary compensatory amounts the conditions of entry laid down in the present case for the purpose of calculating levies are not in substance of such a nature as to concern intra-Community trade since their sole purpose is to limit the entry under subheading 04.04 A I of products imported into the Community from non-member countries. They can therefore reasonably be understood as excluding entry under that subheading of all products other than those imported into the Community and coming from non-member countries and in particular products originating in a Member State and exported to another Member State.

15 Further, it is to be observed that the intention of the said note, which refers to a subheading of the Common Customs Tariff, is only to ensure that the specific criteria of that subheading are satisfied. It cannot however be understood as giving the competent authorities the power to exclude application of that subheading by omitting to lay down the conditions of entry. As a result if the conditions of entry have not been laid down or, as in the present case, have been laid down only for the import from non-member countries, the subheading in question applies both on export to non-member countries and in intra-Community trade.

JUDGMENT OF 9. 7. 1981 — CASE 169/80

16 The Commission referred to the purport of the rules and the logic of the system of monetary compensatory amounts in support of its argument to the contrary. It claimed that the entry of the products in question under sub- heading 04.04 A I and consequently their exemption from monetary compensatory amounts in intra-Community trade would make the system ineffective and give rise to distortions in the market in milk. For that reason it is necessary to interpret the rules referring to the Common Customs Tariff for the purpose of calculating the monetary compensatory amounts as meaning that subheading 04.04 A I applies by reason of the note only to imports from certain non-member countries in respect of which international obligations require a specific treatment.

Costs

21 The costs incurred by the Commission, which has submitted observations to the Court, are not recoverable. Since 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 national court, the decision on costs is a matter for that court.

On those grounds,

THE COURT (Third Chamber)

in answer to the question put to it by the Chambre Commerciale of the French Cour de Cassation by a judgment of 1 July 1980, hereby rules:

For the purposes of the application of monetary compensatory amounts Emmentaler cheese exported from France to Italy and Belgium during the periods from 12 August to 24 October 1974, 20 January to 28 April 1975 and 27 March to 24 September 1976 fell within tariff subheading 04.04 A I.