C-274/95

WÜNSCHE v HAUPTZOLLAMT HAMBURG-JONAS

OPINION OF ADVOCATE GENERAL TESAURO delivered on 12 December 1996

1. In these proceedings the Bundesfinanzhof rather esterified starch, * which, under the (Federal Finance Court) has made references provisions in force, did not give rise to any to the Court for preliminary rulings on the entitlement to the export refunds and mon- tariff classification of potato starch contained etary compensatory amounts provided for in in a food product having an acetyl content of respect of native potato starch. up to 0.74% by weight.

Facts and proceedings Consequently, the Hauptzollamt, on the one hand, ordered Wünsche to repay the sums unduly received (Cases C-275/95 and C-276/95) and, on the other hand, refused to pay it the export refunds and monetary com- pensatory amounts requested (Case C-274/95).

Tariff ('CCT') and under subheading N o first, it asks whether the customs classifica- 3505 10 50 of the Combined Nomenclature tion of esterified potato starch depends on its ('CN'). acetyl content and therefore on the extent of its esterification; if so, it asks what acetyl content would preclude esterified potato starch from being classified under heading N o 11.08 A. IV of the CCT (and under the corresponding subheading N o 1108 13 00 of 3. Wünsche appealed to the Bundesfinan- the CN). zhof against the decision of the Finanzger- icht, alleging that headings Nos 11.08 and 39.06 of the C C T and the corresponding subheadings Nos 1108 13 00 and 3505 10 50 of the C N had been wrongly interpreted. In support of its appeal, it relied on the judg- ment in EmsL·nd-Stärke, 2 in which it was Relevant legislation held that an acetyl content slightly higher than 0.5% did not preclude classification under the customs heading for native starch. It also argued that that ruling could not be read as subject to exceptions and/or limita- tions on account of the nature of the product under consideration. 5. As regards the exports carried out by Wünsche during 1987 (Cases C-275/95 and C-276/95), the relevant version of the C C T is that resulting from Council Regulation (EEC) N o 3618/86 of 24 November 1986, For its part, the Hauptzollamt argues that containing the most recent amendment to Emsfønd-Starke was concerned only with Regulation (EEC) N o 3331/85. 3 the classification of a product made up of a mixture of native starch and esters of potato starch, with the result that what was held in that case cannot apply to the product under consideration, which is, by contrast, a homo- geneous product.

harmonized system 4 relating to the latter brought about by the action of heat, of heading, esterified starches include, for chemical products (acids, alkalis, etc.) or of example, acetates of starch, used above all in enzyme activity, as for starches modified by, the textile and paper industries, and nitrates for example, oxidization, esterification or of starch, used in the manufacture of explo- etherification. For those products, the sives. explanatory notes give, by way of example, acetates of starch used in the textile or paper industry and nitrates of starch used in the manufacture of explosives. Again according to the abovementioned explanatory notes, heading N o 3505 does not include unmodi- fied starches, which come under heading N o 1108. As regards the exports carried out by Wün- sche in 1988 (Case C-274/95), the version of the C N applicable was adopted by Council Regulation (EEC) N o 2658/87 of 23 July 1987 on the tariff and statistical nomencla- ture and on the Common Customs Tariff. 5 In it, starches are classified under heading N o 1108 and potato starch, as such, under subheading N o 1108 13 00. According to the relevant explanatory notes, heading N o 1108 does not include dextrins and other modified starches, which are covered by heading N o It should be noted, moreover, that, according 3505. Subheading N o 3505 10 50, under to paragraph 3 of the annex to Commission which esterified or etherified starches are Regulation (EEC) N o 28/90 of 4 January classified, comes under that heading. 1990 on the classification of certain goods in the codes 1108 11 00, 1108 12 00, 1108 13 00 and 1108 14 00 of the Combined Nomencla- ture and repealing Regulation (EEC) N o 1463/87, 6 which is not applicable ratione temporis to the facts of this case, 'products in the form of fine, white powder, consisting of a mixture of native potato starch and small quantities of acetylated potato starch or very According to the explanatory notes of the weakly acetylated potato starch, and having harmonized system relating to heading N o the following characteristics: starch content 3505, dextrins and other modified starches (determined by the Ewers method): 95% or covered by that heading are products result- more by weight on the dry product; acetyl ing from the transformation of starches content (determined by the enzymatic method): less than 0.5% by weight on the dry product' must be classified under sub- 4 — According to the case-law of the Court, explanatory notes, heading N o 11081300. Need it be added whilst they may not amend the wording of the CCT, are an that that provision follows the preceding important aid for interpretation in that they enable the con- tents of the customs headings and subheadings to be speci- fied or explained: sec, to this effect. Joined Cases C-106/94 and C-139/94 Colin and Dupri [1995] ECR 1-4759, para- graph 21. 5 — OJ 1987 L 256, p. 1. 6 — OJ 1990 L 3, p. 9.

6. First of all, it must be noted that the rel- 8. That view, however, is at odds with the evant headings of the CCT, on the one hand, case-law of the Court, which, in EmsUnd- and of the CN, on the other, are worded Stärke, ruled on the interpretation of the substantially similarly, so that remarks made customs headings considered here, also in the with regard to one may equally apply to the light of the provisions of Regulation N o other. That said, it should be noted that, as 28/90. the Court has consistently held, 8 the deci- sive criterion for the classification of goods for customs purposes is, in general, to be sought in their characteristics and objective properties as defined in the wording of the In that judgment, the Court specifically relevant heading of the C C T and of the stated that 'the acetyl content of starch is an notes to the sections and chapters. indicator of the extent to which substitution has taken place: the higher the acetyl con- tent, the more extensive the modification of the starch. Starch with a very low acetyl con- tent may therefore be close to native starch'. 9 That, as we know, serves the dual purpose of ensuring legal certainty and ease of verifica- tion. Since what is missing, however, both from the headings and subheadings under consideration and from the explanatory To my mind, it may be inferred from that notes, is guidance for answering the ques- passage that acetyl content is a determinative tion, it is necessary to verify whether acetyl characteristic for assessing whether an esteri- content is one of the characteristics or objec- fied starch may still be regarded, for the pur- tive properties of the product in question poses of its classification, as a native starch and, if so, whether it is a determinative factor or whether it should be taken to be esterified for the purposes of classification. starch. That proposition is moreover borne out from the systematic point of view both

Moreover, it is scarcely necessary to point out that mixtures and homogenous products with a low acetyl content, that is to say, slightly 'modified' products, were similarly equated by Regulation No 1463/87, which That does not mean, however, as the Com- was repealed by Regulation N o 28/90, with mission has rightly observed, that acetyl con- respect to maize starches. It appears to be tent is the only factor to be taken into con- confirmed, therefore, also from the system- sideration for the purposes of classifying a atic point of view, that there is no justifica- product. It cannot be ruled out a priori that tion for treating mixtures differently from changes in the properties and in the potential homogenous substances for present pur- uses of a product brought about by process- poses, as the national court suggests. ing (esterification) had the result of changing the relevance of the acetyl content by alter- ing the nature of the product itself. If so, it will be for the national court, taking into account the particular facts of the case, to assess whether the conditions for classifying the starch in question as esterified or native have been met or not. Generally speaking, however, I agree with the Commission that 10. The national court's second question, acetyl content is, as a rule, a determinative which seeks to establish the maximum classification criterion in the absence of threshold for acetyl above which starch must objective factors reducing its importance. be considered esterified, is closely connected

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O P I N I O N O F MR T E S A U R O — J O I N E D CASES C-274/95, C-275/95 A N D C-276/95

11. I would first point out that in EmsL·nd- Stärke the Court held that an acetyl content slightly above the 0.5% mentioned in Regu­ lation N o 28/90 (more precisely 0.67%) was not sufficient to preclude classification of the 12. Naturally, when considering products relevant product under subheading N o which have a significantly higher acetyl con­ 1108 13 00. The Court held that '[ťjhere įs tent than the values considered here, differ­ nothing in the wording of Regulation ent assessments cannot be ruled out. 1 2 N o 28/90 to indicate that it seeks to draw a Indeed, higher percentages of acetyl may distinction, based on acetyl content, between change the essential characteristics of the native starch to be classified under subhead­ product in such a way that, qualitatively, it is ing N o 1108 13 00 and esterified starch fall­ no longer native starch but esterified starch. ing under subheading N o 3505 10 50. That However, as has already been seen, 1 3 this is a regulation merely indicates that an amyla­ matter for the national court, which has to ceous product having the characteristics determine, in the light of appropriate techni­ described in its annex must in all cases be cal and scientific inquiries and of the particu­ classified under subheading 1108 13 00. lar features of the case, the effect of higher Moreover, the regulation gives no guidance levels of acetyl for the purposes of the cus­ as to the proper classification of an amyla­ toms classification of the product. ceous product with an acetyl content slightly in excess of 0.5%.' n

(2) The Common Customs Tariff and the Combined Nomenclature must be inter- preted as meaning that a homogenous starch product, intended for human consumption, made up of native potato starch with an acetyl content of between 0.67% and 0.74% by weight, must be classified under heading N o 11.08 A. IV of the Common Customs Tariff (and under subheading N o 1108 13 00 of the Combined Nomenclature).

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