C-274/95

JUDGMENT OF 17. 4. 1997 —JOINED CASES C-274/95, C-275/95 AND C-276/95

J U D G M E N T O F T H E C O U R T (Fourth Chamber) 17 April 1997 *

In Joined Cases C-274/95, C-275/95 and C-276/95,

REFERENCES to the Court under Article 177 of the EC Treaty by the Bundes- finanzhof for a preliminary ruling in the proceedings pending before that court between

Ludwig Wünsche & Co.

and

composed of: J. L. Murray, President of the Chamber, P.J. G. Kapteyn (Rappor- teur) and H. Ragnemalm, Judges,

Advocate General: G. Tesauro, Registrar: H. A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of:

— Ludwig Wünsche & Co., by Klaus Landry, Rechtsanwalt, Hamburg,

— Commission of the European Communities, by Francisco Fialho, of its Legal Service, acting as Agent, and Hans-Jürgen Rabe, Rechtsanwalt, Hamburg,

having regard to the Report for the Hearing,

1 By three orders of 20 June 1995, received at the Court on 14 August 1995, the Bundesfinanzhof (Federal Finance Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty questions on the interpretation of the Common Customs Tariff as laid down in Council Regulation (EEC) N o 3618/86 of 24 November 1986 amending Regulation (EEC) N o 3331/85 amending Regu- lation (EEC) N o 950/68 on the Common Customs Tariff ('CCT') (OJ 1986 L 345, p. 1), and of the Combined Nomenclature ('CN'), as contained in Council Regu- lation (EEC) N o 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1).

2 Those questions were raised in proceedings between Ludwig Wünsche & Co. ('Wünsche') and Hauptzollamt (Principal Customs Office) Hamburg-Jonas ('the Hauptzollamt') concerning the tariff classification of a product known as 'Per- fectamyl KKS', certain consignments of which were exported in 1987 and 1988 to non-Member States.

3 The version of the C C T contained in Regulation N o 3618/86 applied to exports made during 1987 (Cases C-275/95 and C-276/95). Headings 11.08 A IV and 39.06 B I of the C C T are worded as follows:

— Heading 11.08 A IV:

'11.08 Starches; inulin:

A. Starches:

B. Other:

I. Starches, esterified or etherified'.

4 As regards exports made during 1988 (Case C-274/95) the text applicable is the C N published in Regulation N o 2658/87, subheadings 1108 13 00 and 3505 10 50 of which are worded as follows:

— Subheading 11081300:

'1108 Starches; inulin:

— Starches

3505 10 10 Dextrins

Other modified starches:

3505 10 50 —• —• Starches, esterified or etherified'.

5 According to Article 1 of Commission Regulation (EEC) N o 28/90 of 4 January 1990, concerning the classification of certain goods in the codes 1108 11 00, 1108 12 00, 1108 13 00 and 1108 14 00 of the combined nomenclature and repealing Regulation (EEC) N o 1463/87 (OJ 1990 L 3, p. 9), which entered into force on 1 March 1990, and point 3 of the Annex thereto, 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 weakly acetylated potato starch, and having a starch content of 95% or more by weight and an acetyl content of less than 0.5% by weight, must be classified under subheading 1108 13 00. According to the

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Moreover, in Case C-274/95 the degree of esterification of the exported products amounted, according to information provided by Wünsche, to 0.67% by weight.

9 Before the Bundesfinanzhof Wünsche argued that the Finanzgericht had misinter- preted headings 11.08 and 39.06 of the C C T and the corresponding subheadings 1108 13 00 and 3505 10 50 of the C N . In support it relied on the judgment of the Court in Case C-256/91 Emsland-Stärke v Oberfinanz direktion München [1993] ECR 1-1857, in which the Court held that starch having an acetyl content of less than 0.5% was to be classified under heading 1108, but that an acetyl content greater than that did not preclude classification of the potato starch under that heading. O n the other hand, the Hauptzollamt considered that the judgment in EmsUnd-Stärke concerned only tariff classification of a product made up of a mix- ture of native starch and potato starch ester, with the result that its conclusions could not apply to the product at issue in the main proceedings, which is a homo- geneous product.

io It is apparent from the order for reference that, according to the Bundesfinanzhof, doubts subsist as a matter of law as to the correct classification of esterified potato starch having an acetyl content of 0.5% or more by weight.

2. If the answer is in the affirmative: how high could the maximum acetyl content have been in the case of esterified potato starch exported in February 1988 so as not to preclude its tariff classification under subheading 1108 13 00 of the Com- bined Nomenclature?'

— In Case C-275/95:

' 1 . Does the classification of esterified potato starch under tariff subheading 39.06 B I of the Common Customs Tariff 1987 or under tariff subheading 11.08 A IV of the Common Customs Tariff 1987 depend on its acetyl content and consequently on the degree of its esterification?

2. If the answer is in the affirmative: how high could the maximum acetyl content have been in the case of esterified potato starch exported between April 1987 and August 1987 so as not to preclude its classification under tariff subheading 11.08 A IV of the Common Customs Tariff 1987?'

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is The Court has consistently held that, in the interests of legal certainty and ease of verification, the decisive criterion for the customs classification of goods must be their objective characteristics and properties, as defined by the wording of the

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headings of the Common Customs Tariff and the notes to the sections or chapters (see, in particular, Case 40/88 Weber [1989] ECR 1395, paragraph 13, and Case C-265/89 Vismans NederUnd [1990] ECR 1-3411, paragraph 14).

i6 Since, in the present case, the terms of the headings and subheadings, and of the corresponding explanatory notes, provide no useful guidance for answering the question, it falls to be considered whether the acetyl content and the degree of esterification are characteristics or objective properties of potato starch.

17 In that connection it should be recalled that in EmsUnd-Stärke the Court held, at paragraph 34, that the acetyl content of starch is an indicator of its degree of sub- stitution: the higher the acetyl content, the more extensive the modification of the starch. Consequently, starch with a very low acetyl content may be close to native starch. The Court therefore accepted classification of a product with a low acetyl content under subheading 1108 13 00 of the C N .

22 Nevertheless, as the Commission has rightly observed, acetyl content constitutes, in the first place, an indication of the degree of transformation of the starch from a purely quantitative point of view. Whilst, as a general rule, it must be regarded as a determinative classification criterion, the national court will, nevertheless, also have to examine any parallel alterations in the properties, possibilities for use and other qualities of the starch in order to determine whether and when the degree of esterification expressed by the acetyl content causes the starch, from a qualitative point of view, to pass from its native state to a modified state within the meaning of the C C T and the C N .

23 Consequently, the answer to the national court's first question must be that the classification of esterified potato starch under heading 11.08 A IV of the C C T (and under subheading 1108 13 00 of the C N ) or under heading 39.06 B I of the C C T (and under subheading 3505 10 50 of the C N ) is primarily dependent on its acetyl content and thus on its degree of esterification. Nevertheless, it is for the national court to determine whether the nature of the esterification does not amount to an alteration of the potato starch such that it no longer corresponds qualitatively to native potato starch.

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The second question

24 Regard being had to the facts of the main proceedings, this question, in each of the cases, must be construed as seeking essentially to determine whether a maximum acetyl content of between 0.61% and 0.74% by weight of the esterified potato starch precludes its being classified under heading 11.08 A IV of the C C T and under subheading 1108 13 00 of the C N .

Costs

29 The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

O n those grounds,

T H E C O U R T (Fourth Chamber),

in answer to the questions referred to it by the Bundesfinanzhof by orders of 20 June 1995, hereby rules:

1. The classification of esterified potato starch under heading 11.08 A IV of Council Regulation (EEC) N o 3618/86 of 24 November 1986 amending Regulation (EEC) N o 3331/85 amending Regulation (EEC) N o 950/68 on the Common Customs Tariff (and under subheading 1108 13 00 of the Com- bined Nomenclature, as contained in Council Regulation (EEC) N o 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Com- mon Customs Tariff), or under heading 39.06 B I of the Common Customs Tariff (and under subheading 3505 10 50 of the Combined Nomenclature) is primarily dependent on its acetyl content and thus on its degree of esterifi-

R. Grass J. L. Murray

Registrar President of the Fourth Chamber

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