C-236/83

on the interpretation of Article 3 of Regulation (EEC) N o 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials,

T H E C O U R T (Second Chamber)

composed of: O. Due, President of Chamber, P. Pescatore and K. Bahlmann, Judges,

Advocate General: P. VerLoren van Themaat Registrar: D. Louterman, Administrator

gives the following

JUDGMENT

The ultracentrifuge is designed to The multiple contact switch unit consists analyse molecular weight distribution in synthetic and natural polymers. It is essentially of a large number of electrical composed essentially of the following and electronic components. parts: As a result of the extremely fast (a) The centrifuge itself, consisting of acceleration of the rotor (up to 68 000 the propulsion mechanism ("drive"), revolutions per minute), the measuring comprising an electric motor with cells (sensors) themselves accelerate by transmission and instruments for up to 200 000 times the speed of gravi- measuring and regulating the speed, tational acceleration. Under the influence and the rotor chamber with rotor; of the huge gravitational field, the separated molecules drift towards the base of the apparatus. The speed at (b) A system for cooling (refrigeration which the molecules travel varies unit) and heating (resistance wire) according to their nature and they are the rotor chamber and for measuring thus separated. By measuring those and regulating the temperature; processes it is possible to ascertain molecular weight distribution. Optical (c) Oil and diffusion pumps for empty- systems are used to project a beam of ing the rotor chamber; light through the measuring cells and measure, with the aid of a large number of subsidiary components, the optical (d) Two optical systems (an ultra-violet difference in the refractive index of the optical system and a Schlieren/ solution of the substances for analysis Interference optical system) com- and of the solvent. Those measurements prising light sources, lenses and other are recorded on a photo-sensitive plate optical components as well as and it is thus possible to ascertain the photographic and electronic ap- different speeds at which the molecules paratus, including the multiple con- travel by means of a large number of tact switch unit. exposures. At the same time the optical signals are recorded on paper in the form of a graph with the aid of other The rotors are made of titanium, a light, equipment. The multiple contact switch highly resistant material, and are unit makes it possible to select certain specially shaped so as to stabilize measuring cells and phases during the rotation and prevent vortical movement. process. The bases of the rotors are fitted with a thermistor needle for measuring the temperature in the rotor. Variations in By decision of 26 September 1977, the the resistance of the needle produced Hauptzollamt admitted free of customs by fluctuations in temperature are duty the rotors and the multiple contact transmitted to the regulating mechanism switch unit imported by the University of through a small container of mercury in Hamburg.

That decision was justified by the I. H o w is Article 3 (1) of Regulation consideration that the rotors and the N o 1798/75 of 10 July 1975 (in its multiple contact switch unit were not in original version) to be interpreted as themselves of a scientific character and, regards the phrase "scientific instru­ therefore, could not be admitted free of ments and apparatus"? duty under Article 3 (1) of Regulation (EEC) N o 1798/75 of the Council of 1. Can it also include materials which 10 July 1975 on the importation free are components, spare parts or of Common Customs Tariff duties of accessories of a unit of equipment? educational, scientific and cultural ma­ terials (Official Journal 1975, L 184, p. 1). Article 3 (2) of that Regulation was If Question 1 is answered in the also inapplicable, in the Hauptzollamťs affirmative : view, on the ground that components, spare parts and accessories required for the operation of scientific instruments 2. Does the phrase "instruments and and apparatus could be admitted free of apparatus" include materials of all duty only if the principal item had also kinds or only those which are so been imported free of duty, which had designed that they can be used for not been done in the present case. performing a specific operation or for producing specific effects in relation to other materials? What The University of Hamburg filed an other criteria, if any, are decisive objection which was dismissed and it for the definition of that phrase? then brought an action against the notice of reassessment of 8 November 1979 before the Finanzgericht München. 3. In the case of materials which are components, spare parts or ac­ cessories of a unit of equipment, The University of Hamburg contended does the question whether they are essentially that the imported materials in instruments or apparatus depend themselves were, in the light of their on whether, in relation to that objective characteristics, of a scientific unit of equipment or its other character and that, moreover, it was components, they are wrong to make the duty-free admission of components, spare parts and ac­ cessories conditional on the principal (a) structurally autonomous (for apparatus being imported free of duty. example, they have their own

casing, their own baseplate or (a) the instruments and apparatus the like) and/or are incapable of functioning without the component, spare (b) they perform an independent part or accessoiy concerned; function? or is the decisive factor whether If Question 3 (a) is answered in the negative and Question 3 (b) is (b) the components, spare parts or answered in the affirmative: accessories arc specially made for or adapted to the in- struments and apparatus con- (c) Where a component, spare cerned and are therefore part or accessory performs an components, spare parts or independent function within a accessories specific to those unit of equipment, is the instruments or apparatus? decisive factor whether it is capable of working on its own, thus, in particular, whether in 2. Does the phrase "which quality for addition to the operative com- duty-free admission" entail that ponent itself, it also contains the instruments and apparatus for the propulsion mechanism the operation of which the com- therefor? ponents, spare parts or accessories are required: 4. Is the decisive factor as regards the scientific character of instruments (a) are or were themselves im- and apparatus which are com- ported, or is it sufficient that ponents of a unit of equipment, they whether those instruments and apparatus, viewed in themselves, (b) satisfy the requirements laid serve scientific purposes, par- down for admission free of ticularly in the light of their own characteristics and the functions Common Customs Tariff (or parts of functions) performed duties, with the result that by them, or is their scientific Article 3 (2) of Regulation No character established by the mere 1798/75 applies even where fact that the unit of equipment of some of the components of the which they form part is scientific instruments and apparatus are and that, since they are specific imported from a non-member components of that unit, they can countiy and some are manu- be employed only in conjunction factured in the Community, with it and thus, like it, they are provided that no instruments used mainly or exclusively for or apparatus of scientific value scientific research? equivalent to that of the in- struments and apparatus as- sembled from those com- II. How is Article 3 (2) of Regulation ponents are manufactured in No 1798/75 to be interpreted? the Community?

In accordance with Article 20 of the themselves qualify for duty-free ad- Protocol on the Statute of the Court of mission. Justice of the EEC, written observations were submitted on 30 January 1984 Since they are treated in the same way, it by the Commission of the European is not usually necessary to distinguish the Communities, represented by Jörn Sack, concept of "scientific instruments and a member of its Legal Department. apparatus" from that of "components, spare parts and accessories" of such On hearing the report of the Judge- equipment. The importation of com- Rapporteur and the views of the ponents, ' spare parts or accessories free Advocate General, the Court decided to of duty is even simpler since they do not open the oral procedure without any themselves need to be of a scientific preparatory inquiry. It did, however, put character. The maxim that accessories a question to the Commission asking for follow the principal item is implicitly a reply in writing which was duly applied. furnished within the period prescribed. By order of 14 March 1984 the Court The question whether components, spare decided, pursuant to Article 95 (1) and parts or accessories may themselves be (2) of its Rules of Procedure, to assign classified as scientific instruments or the case to the Second Chamber. apparatus would arise only if the principal scientific instrument or ap- paratus is not admitted free of duty on I I — Written observations sub- the ground that apparatus of equivalent m i t t e d to t h e C o u r t scientific value is manufactured in the Community whilst the components, spare parts or accessories are not. In the Commision's view, it would be useful if the Court's interpretation of Regulation No 1798/75 were as com- In order to answer the question raised prehensive as possible in view of the it is necessary to ascertain whether large number of questions raised by that "scientific instruments and apparatus" Regulation. are to be distinguished from "com- ponents, spare parts and accessories" in (a) Question LI conceptual terms or in terms of their function. Article 3 of Regulation N o 1798/75 is based, from a structural point of view, in A definition in conceptual terms is not both its original version and as amended only extremely problematic but may also by Council Regulation (EEC) No ultimately lead to fine distinctions that 1027/79 of 8 May 1979 (Official Journal cannot subsequently be applied in 1979, L 134, p. 1.), on a clear separation practice. The Commission, therefore, between instruments, apparatus and considers it appropriate to seek a "Geräte" (the latter term — literally definition in terms of function, which, in "devices" — appears in the German the present case, means that Question 1.1 version but not in the English or French should be answered in the negative. versions), on the one hand, and components, spare parts and accessories intended for such equipment, on the What is important, according to that other. However, there is no difference in approach, is not the structure of the effects of duty-free admission for apparatus, or the manner in which it components or accessories for scientific functions, but only the question whether instruments and apparatus which it is to be used on its own, to be incor-

porated in other apparatus as a com- that provision taken on its own would ponent or spare part or to be fitted on to undoubtedly be highly desirable since, as other apparatus as an accessory. That far as the point at issue is concerned, the may often be difficult to establish in original text is drafted in much stricter practice but an abstract interpretation terms than the later version. That would can do little to mitigate that difficulty. In lead to unsatisfactoiy results, however. the present case, there cannot in practical The more liberal rule in the new version terms be any serious doubt that the of Article 3 (2) is therefore, as far as rotors and the multiple contact switch possible, to be regarded as already unit are components or accessories of the incorporated in the initial version of high-speed centrifuge. that provision. Accordingly, components, spare parts and accessories need not be A distinction between instruments and indispensable to the operation of the apparatus, on the one hand, and principal instruments or apparatus. It is components, spare parts and accessories, sufficient to establish that they have been on the other, purely in functional terms specially made for the scientific in- corresponds to the scheme of Regulation struments or apparatus in question. In No 1798/75 and to the practical the case of accessories, Article 12 of requirement that the provisions in Commission Regulation (EEC) No question be as simple to apply as 2784/79 of 12 December 1979 laying possible. down provisions for the implementation of Council Regulation No 1798/75 (Official Journal 1979, L 318, p. 32) The answer to Question 1.1 should expressly provides for that solution. The therefore be as follows: interpretation thus suggested is also appropriate inasmuch as the high per- Materials that are intended to serve as formance required of scientific apparatus components, spare parts or accessories of can in most cases be achieved only by a scientific instrument or apparatus must means of parts and accessories specially not be treated as scientific instruments designed for such equipment. or apparatus within the meaning of Article 3 of Regulation No 1798/75. The answer to Question ILI should be as follows: The other questions raised under Ques- tion I thus become devoid of purpose. Components, spare parts and accessories are required, within the meaning of (b) Questionili Article 3 (2) of Regulation No 1798/75 in its original version, for the operation of scientific instruments and apparatus The purpose of this question is where they have been specially made for essentially to ascertain whether Article 3 or adapted to such equipment. (2) of Regulation No 1798/75 in its original version is to be given an auton- omous interpretation on the basis of its wording or whether it is to be (c) Question II. 2 interpreted in the light of the subsequent amendment by Regulation No 1027/79. This question is also concerned with the impact of the new version of Regulation From a purely theoretical point of view, No 1798/75 on the interpretation of the interpretation of the original wording of initial version.

The German text of the original version where the importer has not previously is unclear. It may be understood as availed himself of the possibility of duty- meaning that admission of components, free admisson, although he was entitled spare parts and accessories free of duty is to do so, or where comparable apparatus conditional on the principal apparatus was at the time still being manufactured actually being admitted free of duty. in the Community. However, the French and English versions point to the opposite conclusion. The incorporation of such subsequent Regulation N o 1027/79 clarified the clarifications in the initial version, to the original version in all the languages by detriment of the importer, is of course providing that the principal apparatus open to criticism.

The latter makes the ponents and accessories. The last part of importation of components, spare parts that subparagraph ("or entitled to duty- and accessories free of duty conditional free entry") must not be understood as upon the actual importation of the providing for a third, quite separate, principal apparatus. The Community was possibility. It merely expresses the idea not under any obligation to establish a that the importation of the principal more favourable system for imports, nor apparatus free of duty must still be did it intend to do so, not least because possible at the time of importation of the of the lack of reciprocity.

from 1 July 1984. That provision leaves customs duty is not devoid of substance no room for doubt that it covers only but its significance cannot be exag- cases where spare parts, components or gerated since the burden represented by accessories are imported at the same time customs duty nowadays only rarely as the principal instrument or apparatus constitutes a reason for investment or where the latter was imported abroad and, conversely, permanent beforehand. In the case of spare parts, exemption from duty in the case of components or accessories imported components of considerable value may subsequently, the regulation once again be a reason for keeping production of distinguishes between two possibilities such components, which is of the the second of which covers com- greatest scientific and technical im- paratively rare situations, in particular portance, outside the Community.

3 However, after reconsidering the matter, the Hauptzollamt took a different view and, by decision of 8 November 1979, demanded payment of customs duties. The Hauptzollamt considered that the rotors and the multiple contact switch unit, viewed in themselves, could not be regarded as scientific in-

JUDGMENT OF 15. 11. 1984 — CASE 236/83

struments or apparatus within the meaning of Article 3 (1) of Regulation N o 1798/75. Nor, in its view, could they be regarded as components, spare parts or accessories (hereinafter referred to as "components" required for the operation of scientific instruments and apparatus within the meaning of Article 3 (2) of that Regulation.

4 The University of Hamburg brought an action against that decision before the Finanzgericht. In support of its action, the University of Hamburg contended that the imported materials in themselves were, in the light of their objective characteristics, of a scientific character. Accordingly, as far as the exemption of those components was concerned, there was no reason to draw a distinction according to whether the principal apparatus was imported free of duty or, instead, was manufactured within the territory of the Community. The wording of Article 3 of Regulation N o 1798/75 did not rule out such a solution.

s The Hauptzollamt disputed the scientific character of the components in question which, in the light of their construction, constituted specific components of a centrifuge and had no autonomous function independently of that performed by the centrifuge. Nor, in the Hauptzollamťs view, could those components be imported free of customs duty under Article 3 (2) of Regulation N o 1798/75 since that provision granted exemption only in respect of components required for the operation of scientific instruments and apparatus which had themselves been imported free of duty. Therefore that provision could not apply to components which were intended to be incorporated in a unit of equipment constructed in the Communtiy.

3. In the case of materials which are components, spare parts or accessories of a unit of equipment, does the question whether they are instruments or apparatus depend on whether, in relation to that unit of equipment or its other components, they are (a) structurally autonomous (for example, they have their own casing, their own baseplate or the like) and/or (b) they perform an independent function?

If Question 3 (a) is answered in the negative and Question 3 (b) is answered in the affirmative : (c) Where a component, spare part or accessoiy performs an independent function within a unit of equipment, is the decisive factor whether it is capable of working on its own, thus, in particular, whether in addition to the operative component itself, it also contains the propulsion mechanism therefor?

4. Is the decisive factor as regards the scientific character of instruments and apparatus which are components of a unit of equipment, whether those instruments and apparatus, viewed in themselves, serve scientific purposes, particularly in the light of their own characteristics and the functions (or parts of functions) performed by them, or is their scientific character established by the mere fact that the unit of equipment of which they form part is scientific and that, since they are specific components of that unit, they can be employed only in conjunction with it and thus, like it, they are used mainly or exclusively for scientific research?

II. How is Article 3 (2) of Regulation N o 1798/75 to be interpreted?

1. Does the phrase "required for the operation of scientific instruments and apparatus" mean that (a) the instruments and apparatus are incapable of functioning without the component, spare part or accessoiy concerned; or is the decisive factor whether (b) the components, spare parts or accessories are specially made for or adapted to the instruments and apparatus concerned and are therefore components, spare parts or accessories specific to those instruments or apparatus?

io As regards the second set of questions, the Commission put forward two kinds of arguments. T o begin with, it drew attention to the fact that Regu-

UNIVERSITY OF HAMBURG v HAUPTZOLLAMT MÜNCHEN-WEST

lation N o 1798/75 was subsequently amended on two occasions. First it was amended by Council Regulation (EEC) N o 1027/79 of 8 May 1979 (Official Journal 1979, L 134, p. 1) in order to take account of certain provisions of the Protocol adopted at the 19th General Conference of Unesco at Nairobi on 26 November 1976 amending and clarifying certain provisions of the Florence Agreement (Protocol registered with the United Nations under No 20669). It was clear from Annex D (ii) to that Protocol, which formed the basis for the amendment of Article 3 (2) by Regulation No 1027/79, that components were to be admitted free of duty only if they were intended for instruments or apparatus imported previously or at the same time. Article 53 (a) of Council Regulation (EEC) N o 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (Official Journal 1983, L 105, p. 1), which consolidated the legislation in force in this area, was similarly amended. The Commission took the view that, on grounds of reciprocity which, in its view, played an important role in international conventions, an interpretation should be adopted for the application of the legislative provision in force at the material time that was consistent with the Community's international obligations.

n Furthermore, the Commission contended that, for reasons based on customs procedure, duty-free admission should be confined to components intended for imported instruments and apparatus, in view of the fact that components qualified for exemption only if it was established by the customs authorities that the equipment in question qualified for duty-free admission, which was not possible in the case of equipment constructed within the Community.

"Spare parts, components or accessories specifically matching scientific instru- ments or apparatus, provided these spare parts, components or accessories are imported at the same time as such instruments and apparatus, or if imported subsequently, that they are identifiable as intended for instruments or apparatus previously admitted duty-free or entitled to duty-free entry."

"Pièces de rechange, éléments ou accessoires spécifiques s'adaptant aux instruments ou appareils scientifiques, pour autant que ces pièces de rechange, éléments ou accessoires soient importés en même temps que ces instruments ou appareils ou, s'ils sont importés ultérieurement, qu'ils soient reconnaissables comme étant destinés à des instruments ou appareils admis précédemment en franchise ou susceptibles de bénéficier de la franchise."

w Article 3 (2) of Regulation N o 1798/75, as amended by Regulation N o 1027/79, now reads as follows:

"The duty-free admission referred to in paragraph 1 shall apply to : (a) spare parts, components or accessories specifically suitable for scientific instruments or apparatus, provided that these spare parts, components or

UNIVERSITY OF HAMBURG v HAUPTZOLLAMT MÜNCHEN-WEST

accessories are imported at the same time as such instruments and apparatus, or, if imported subsequently, that they can be identified as being intended for instruments or apparatus previously admitted duty free or entitled to duty-free entry; ...''

JUDGMENT OF 15. 11. 1984 — CASE 236/83

i7 As the Commission has rightly pointed out, components, spare parts and accessories are admitted free of duty if it is established that they are required for the operation of a scientific instrument or apparatus, without there being any need to establish that the components, spare parts and accessories themselves are of a scientific character. That classification therefore depends not on the nature of those components but on their connection with a scientific instrument or apparatus.

20 It is for the national court to make that determination in the light of all the relevant facts of the case.

UNIVERSITY OF HAMBURG v HAUPTZOLLAMT MÜNCHEN-WEST

S e c o n d set of q u e s t i o n s ( c u s t o m s t r e a t m e n t of components i n t e n d e d for s c i e n t i f i c i n s t a l l a t i o n s c o n s t r u c t e d within the Community)

21 If the materials in question cannot be classified as scientific instruments or apparatus within the meaning of the Regulation, the Finanzgericht seeks guidance on the question whether the duty-free admission provided for components, spare parts and accessories may also be granted where such materials are imported for incorporation in a scientific installation constructed within the Community or whether such duty-free admission is restricted to components intended for scientific instruments or apparatus which have themselves been imported. The answer to that question depends on the interpretation of the phrase 'scientific instruments and apparatus which qualify for duty-free admission' in Article 3 (2) of Regulation N o 1798/75.

22 In that regard, the arguments put forward by the Commission which are based on the Nairobi Protocol and on the subsequent amendments to the relevant legislation cannot be accepted. The customs treatment for the materials in question is determined by the legislation in force at the time of importation. That legislation cannot be altered by the provisions of sub- sequent conventions or legislation. Moreover, it should be observed that even the Nairobi Protocol and the legislation based thereon do not entirely dispel the doubts surrounding the question whether duty-free admission may be granted in respect of components intended for installations which, if they were imported, would qualify for duty-free admission.

25 In the first place, it is appropriate to draw attention to Article 2 of Regu- lation N o 1798/75 which provides that educational, scientific and cultural materials may be admitted free of duty only when they are intended for certain research or teaching establishments. The application of that provision raises certain difficulties where the imported components are intended not directly for the scientific or educational institution concerned but for the manufacture of scientific equipment which is to be delivered subsequently to the institution concerned. Secondly, it is appropriate to point out that a scientific installation constructed in the Community falls outside the scope of customs law and may not therefore legally be classified as a scientific instrument or apparatus within the meaning of Regulation N o 1798/75, particularly since duty-free admission may be granted only if it is established that instruments or apparatus of equivalent value are not being manufactured in the Community. It would appear therefore that the argument relied upon by the University of Hamburg amounts to classifying the principal instal- lation as a scientific instrument or apparatus which qualifies for duty-free admission, not in its own right, since it is built in the Community, but exclusively by virtue of its connection with the imported components, spare parts or accessories. Regulation N o 1798/75 does not provide any basis for such an interpretation which is a pure fiction and contrary to the system established by that Regulation.

26 For all those reasons, it would appear that certain considerations relating to the scope and the scheme of Regulation N o 1798/75 preclude the duty-free admission of components intended for incorporation in a scientific instal- lation constructed in the Community.

On those grounds,

T H E C O U R T (Second Chamber)

in reply to the questions referred to it by the Finanzgericht München by order of 6 October 1983 hereby rules:

1. Paragraphs 1 and 2 of Article 3 of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials,

OPINION OF MR VERLOREN VAN THEMAAT — CASE 236/83

considered in conjunction with one another, must be interpreted as meaning that the fact that materials can be regarded as components, spare parts or accessories of an installation or a complex unit of equipment for scientific research does not prevent them from being classified as scientific instruments or apparatus, if it is established that they are capable of performing an independent scientific function and if all the requirements of Article 3 (1) of the regulation are satisfied.

1 — Translated from the Dutch.