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5. While those proceedings were in progress, Powerex had made declarations in 2. The Powerex company has, since 1967, accordance with the tariff position laid been importing from America silicon discs down by the customs authorities and conse- which, after various processes to which I quently found, following the judgment on shall have reason later to return, become 23 November 1984, that it had paid too semiconductor devices. The essential much. It therefore brought an action for property of such devices is that they let an recovery of overpayment before the same electrical current pass in only one direction. court on 11 July 1985 in which it sought to be refunded in the sum of FF 3 085 754. The customs authorities thereupon pointed to the existence of a draft Community regu- 3. Until 1981, Powerex had declared those lation which classified silicon discs which goods as parts under subheading 85.21 E of had undergone selective diffusion under the Common Customs Tariff, under which subheading 85.21 D II. The tribunal they were subject to a customs duty of d'instance of Le Mans rejected that 5.8%. In 1981, the French customs auth- submission and, by judgment of 17 October orities decided that the goods in question 1986, ruled in favour of Powerex. The came under subheading 85.21 D II, that is customs authorities appealed, but the to say, 'diodes, transistors and similar semi- judgment was substantially upheld on 9 conductor devices', on which the rate of November 1987 by the cour d'appel (Court duty is 17%. of Appeal) at Angers. On 18 July 1989, the Cour de cassation (Court of Cassation) turned down the appeal brought against that judgment. 4. Three sets of legal proceedings illustrate the dispute between Powerex and the French customs. The first had its origin in the issue of an enforcement order on 28 6. The third set of proceedings was March 1983 under which the customs commenced on 4 November 1987 by the claimed from the company the sum of customs authorities which sought payment FF 2 798 663 in respect of imports made of the sum of FF 1 750 287 and brought the since 8 December 1980. Powerex appealed matter before the tribunal d'instance of Le against that order and brought the matter Mans. It based its submissions essentially on

8. In order to answer the first question, it will be useful to recall Powerex's production 10. There are two methods for injecting process for semiconductor devices as 'traces of impurities' or 'dopants' into the explained in the report drawn up by Mr silicon and that, as we shall find out later, is Camus, the expert commissioned by the a matter of great importance. The first and tribunal d'instance of Le Mans in its older method is that of thermal diffusion, judgment of 7 September 1988. which requires a high temperature (between 1 100 and 1 200° C). Under the second method, which is more effective, the silicon is bombarded by electrons at very high 9. The silicon atom has the particular speed (irradiation under an electron beam), feature of having four electrons on its outer which create 'gaps' in the silicon disc. The layer. The build-up of several atoms makes electrical effect of that process is equivalent it possible to obtain a pure crystal, with to that of dopage with a small amount of each atom then sharing eight electrons on impurities. However, this process makes it its outer layer with four neighbouring possible to control precisely the energy and atoms. All the electrons are at that point the flux of the electrons and thereby to perfectly stable. Since an electrical current is adjust exactly the dopage effect, a result a flux of electrons, it is necessary, in order which is not possible using thermal diffusion to obtain an electrical current passing in alone. Irradiation under an electron beam is only one direction, to inject into certain carried out in France exclusively by the Oris areas of the silicon minute quantities of Industrie company, a subsidiary of the phosphorous and arsenic atoms (which the Atomic Energy Commission, based at Saclay, as the method presupposes the avai- 1 — OJ L 108, p. 20. lability of a particle accelerator.

12. More precisely, items of types A and B 14. What do the provisions of the regu- have undergone thermal diffusion in the lation have to say in that connection? The United States for the purpose of creating first article classifies under subheading zones P and N. They have also been fitted 85.21 D II 'silicon discs, having undergone with a molybdenum support to give the selective diffusion, whereby discrete zones silicon disc greater stability and better elec- are formed, mounted on a molybdenum trical contact. Items of type B also have a support'. The third recital in the preamble bevel, which is a polishing of the surface of states that these discs, 'although not the silicon disc and its cover by an insu- provided with terminals, leads or a housing, lating varnish, a process which is also already in their present form, constitute carried out exclusively in the United States. semiconductor devices... '. On the other hand, a number of processes still have to be carried out on items of type A following importation, in particular a chemical treatment to complete the bevel 15. It seems to me that there is a problem and the application of the protective varnish. at the outset with the concept of 'selective Irrespective of whether the items are of type diffusion'. We may interpret that concept A or of type B, they must still be subjected, either as relating solely to thermal diffusion after importation into France, to irradiation to the exclusion of irradiation under an under an electron beam for the purpose of electron beam, in which case the items adjusting the electrical properties of the imported by Powerex have indeed silicon. That process is subcontracted to the undergone selective diffusion prior to Oris Industrie company. According to the importation and thereby come irrefutably expert commissioned by the court, that is an within the scope of Regulation No 1203/86, essential stage in the production process and or, on the contrary, we may interpret it as requires highly specialized facilities. referring to any process which forms discrete zones, that is to say, to both thermal diffusion and irradiation under an electron beam. In the latter case, we may 13. It is then necessary to carry out a ask whether the items imported by Powerex procedure of mounting or encapsulating the really come within the scope of the regu- disc in such a way as to ensure complete lation since irradiation is carried out on safety, particularly for the fittings which will them after they have been imported. surround it, in view of the fact that the disc will be crossed by electrical currents of several thousand amperes. That process requires a special area called a 'white room' 16. In which sense, therefore, are we to in order to eliminate dust, and a series of understand the concept of selective special processes which give the product a diffusion? Obviously, if we refer to the greatly enhanced value. That is carried out documents appended to the expert report

drawn up on 12 February 1988 by Mr items have undergone thermal diffusion in Gaussens at the request of Powerex, and in the United States and the parties do not particular if we refer to Document No 1 in dispute the fact that thermal diffusion is one English, 2 it appears that the term 'diffusion' method of selective diffusion. Consequently, in scientific parlance relates solely to the fact that they must still undergo another thermal diffusion.3 However, on 3 February process of selective diffusion, this time by 1989, the Commission adopted Regulation way of irradiation, in order fully to acquire (EEC) No 288/89 on determining the the passing and blocking senses, does not origin of integrated circuits, 4 the third warrant the assumption that they have not recital in the preamble to which provides undergone any selective diffusion.

clature. 17. It would appear to me therefore that the concept of selective diffusion must cover both thermal diffusion and irradiation under an electron beam. Is it possible then to 19. It is quite correct to say, as we have conclude on that basis that the items seen when recalling the findings in the imported by Powerex, which have not yet expert report of Mr Camus, that the silicon undergone that irradiation, do not come discs, after having undergone selective within the scope of Regulation No diffusion and acquired a molybdenum

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I should make have undergone selective diffusion 'already clear immediately my view that the second in their present form' constitute semicon- interpretation is called for. I do not believe ductor devices. In fact, the Commission has that the essential characteristic can be applied here General Rule of Interpretation reduced to a simple 'tendency to'; it has to 2(a) of the Convention on Nomenclature take account of the existence or absence of for the Classification of Goods under the the principal functional capacities which are Common Customs Tariff which provides normally required. When General Rule of that 'any reference in a heading to an article Interpretation 2(a) of the Convention on shall be taken to include a reference to that Nomenclature for the Classification of aniele incomplete or unfinished, provided Goods under the Common Customs Tariff that, as imported, the incomplete or refers to incomplete or unfinished articles, it unfinished article has the essential character is referring to finishing and assembly of the complete or finished article'. As a processes, perhaps even some slightly more result, it was on the assumption that silicon complex processes, but certainly not a discs, as soon as they undergo thermal highly sophisticated process which greatly diffusion, have the essential characteristics increases the value of the product, such as of a semiconductor device, that the regu- irradiation under an electron beam by lation chose to classify such items under passing the item through a particle subheading 85.21 D II. I believe for that accelerator, which is the only process reason that the case turns primarily on the capable of preventing short circuits.

gate'. Obviously, those items cannot yet be used in their state at that time. As Mr 21. In addition, and if it is necessary, I must Gaussens pointed out at the hearing, point out that Regulation N o 1203/86, without being contradicted, the use of such inasmuch as it apparently considers that items in that state would result in short silicon discs, after their importation, only

have to be provided with terminals, leads which relates to parts and not under that and housing, seems to be referring by that which is applicable to semiconductor to assembly processes of a straightforward devices. nature, within the capacity of any retail trader. However, the processes which the items imported by Powerex have to undergo are, as we know, exceptionally sophis- 23. Thus, it seems, to bring this point to a ticated, particularly as they must be carried close, that, subject to the complexity of the out in a white room and as they confer a assembly operations, only silicon discs greatly increased value on the items. which have undergone selective diffusion, not only thermal but also by irradiation under electron beams, and which, conse- quently, are capable of letting a current pass

That is how I understood as covering processes which do propose that the Court should answer the not require personnel specially qualified to second question. perform the operations in question, or specialist tools or factories specially equipped for the purposes of assembly. Processes of that kind cannot be considered 24. The third question posed by the court likely to contribute towards conferring on making the reference concerns the effect the goods in question their essential charac- which such invalidity may have on imports teristics or properties'. 6 carried out prior to the future date of this Court's decision.

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effects, particularly in respect of time, is case-law of the Court, to the requirements only an exception to the rule which makes of legal certainty. In so far as the contested such effects go back in time to the date of regulation appears to apply only to imports the act in question which has been declared made by Powerex, there is no obvious 'void'. As with every exception, it must be ground of legal certainty which would strictly interpreted and its scope must be justify limiting the effects of the declaration limited to the requirements on which it is of invalidity. I suggest that the Court should based, that is to say, under the established answer the third question to that effect.

25. I propose therefore t h a t the C o u r t should rule as follows:

'(1) Commission Regulation (EEC) N o 1203/86 of 23 April 1986 on the classifi- cation of goods falling within subheading 85.21 D II of the C o m m o n Customs Tariff must be interpreted as meaning that it applies to silicon discs which have u n d e r g o n e selective diffusion by means of thermal diffusion and are mounted on a m o l y b d e n u m support, even if after their importation into the Community they must still undergo, among other processes, selective diffusion by means of irradiation under electron beams.

(2) T h e abovementioned regulation, in so far as it classifies under subheading 85.21 D II of the C o m m o n Customs Tariff silicon discs which d o not, in their imported state, present the essential characteristics of semiconductor devices, is invalid.