C-31/98

LUKSCH ν HAUPTZOLLAMT WEIDEN

OPINION OF ADVOCATE GENERAL LÉGER delivered on 10 December 1998 *

1. A particular feature of the common organi- for an interpretation of the relevant Commu- sation of the market in fruit and vegetables nity rules in order in particular to define their established by Council Regulation (EEC) N o scope. 1035/72 of 18 May 1972 1 is that counter- vailing charges may be levied periodically in order to prevent disturbances which may be caused by imports from third countries at prices that are considered to be abnormally Law low. A charge is levied where import prices are lower by a specific amount than a refer- ence price which is fixed annually.

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OPINION OF MR LÉGER — CASE C-31/98

import price and the introduction of counter- tion that 'the measures referred to above vailing charges for products which do not should be in keeping with circumstances so comply with that price. 4 that they have none but the desired effect'.

6. Article 1 of Regulation N o 1395/94 thus 8. As amended by Commission Regulation provides that: (EEC) N o 2551/93 of 10 August 1993 amending Annex I to Council Regulation (EEC) N o 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, 6the Combined Nomenclature (here- inafter 'the CN') states that sour cherries are to be classified under subheading 0809 20 20 '1. The minimum price to be observed for where they are imported into the Commu- imports into the Community of sour cherries nity between 1 May and 15 July and under shall be ECU 40 per 100 kilograms net for subheading 0809 20 60 where they are the product falling within C N code 0809 20 20 imported between 16 July and 30 April. and E C U 36 per 100 kilograms net for the product falling within C N code 0809 20 60.

9. Note 1 to Chapter 8 of the C N , entitled 'Edible fruit and nuts; peel of citrus fruits or 2. If the import price is lower than the min- melons', states that '[t]his chapter does not imum price referred to in paragraph 1, a cover inedible nuts or fruits'. countervailing charge equal to the difference between the two prices shall be levied.'

Facts and procedure

14. The national court points out that the 11. When the fruit was delivered it was countervailing charge introduced by Regula- apparent that it was already in an advanced tion N o 1395/94 does not apply in situations state of decay, which an expert attributed to such as those at issue in the main proceedings storage at too high a temperature. The plain­ where there is no risk of disturbance caused tiff in the main proceedings was therefore by imports from third countries at abnor- obliged to sell the goods to a distillery at a mally low prices. It also considers that the price of D E M 10 per 100 kg instead of the spoiled sour cherries delivered to the plaintiff DEM 105 per 100 kg which he had antici­ in the main proceedings do not fall within pated he would receive. So far as he was con­ subheading 0809 20 20 or 0809 20 60 since the cerned the transaction resulted in a reduction fruit was not fit for human consumption. in profits of some 75%.

12. By notice of amendment of 8 February 15. However, being unsure how to interpret 1995, the Hauptzollamt increased the coun­ the relevant Community law — necessary in tervailing charge to DEM 34 726.86, and sub­ order to resolve the case before it — it has sequently to DEM 40 124.02 following the referred the following questions to the Court objection lodged against that notice. for a preliminary ruling:

13. The plaintiff in the main proceedings '1. Is Article 1 of Commission Regulation brought an action contesting that decision N o 1395/94 of 17 June 1994 to be inter- before the Finanzgericht München, arguing preted as meaning that a countervailing essentially that the minimum price rules were charge is to be levied on sour cherries not applicable to spoiled goods. The Haupt- which have deteriorated through the zollamt for its part took the view that, in formation of mould and incipient

16. By its first question the national court seeks to ascertain whether Article 1 of Regu- lation N o 1395/94 applies to sour cherries 19. The Court has consistently held that 'in with the characteristics of those in this par- the interests of legal certainty and ease of ticular case. By its second question it asks the verification, the decisive criterion for the clas- Court to rule whether sour cherries which sification of goods for customs purposes is in are in a state of decay should still be regarded general to be sought in their objective char- as edible fruit within the meaning of Note 1 acteristics and properties as defined in the to Chapter 8 of the C N . Since Article 1 of wording of the relevant heading of the C N ... regulation N o 1395/94 applies, according to There are also explanatory notes drawn up, as Note 1 to Chapter 8 of the C N , only to regards the C N , by the European Commis- 'edible' fruit, I propose to answer the second sion and, as regards the Harmonised Com- question first. modity Description and Coding System, by

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LUKSCH ν HAUPTZOLLAMT WEIDEN

22. According to the national court and the plaintiff in the main proceedings, fruit is ined­ ible when, at the time of assessment, owing to the particular state it is in (for example 25. That description exactly fits the sour cher­ advanced decay) it is unfit for direct human ries delivered to the plaintiff in the main pro­ consumption in that state. ceedings.

7 — Case C-270/96 Laboratoires Sarget [1998] ECR I-1121, para­ graph 16. See also Case C-201/96 VTM [1997] ECR I-6147, 8 — OJ 1994 C 342, p. 1. paragraph 17. 9 — Second Edition 1996, Volume I.

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OPINION OF MR LÉGER — CASE C-31/98

26. Furthermore, the explanatory notes to the are generally unfit for human consumption Harmonised Commodity Description and and which are therefore excluded from Coding System relating to Chapter 8 confirm Chapter 8. These include copra, the dried and the Commission's interpretation that Chapter shredded flesh of coconut used for the expres- 8 still covers fruit which, although not directly sion of coconut oil and unsuitable for human fit for immediate human consumption, could consumption. They also include 'orange peas' become so after processing. or 'orangettes', which are immature inedible oranges that have fallen soon after the tree has blossomed, and are gathered dry with a view, in particular, to extraction of their essen- tial oil (petit-grain).

27. Thus, the general remarks in those explan- atory notes state that: 'This Chapter covers fruit ... generally intended for human con- sumption (whether as presented or after pro- 30. It is apparent from the foregoing that cessing). [It] may be fresh... frozen ... or dried Chapter 8 should be interpreted as excluding ... provided they are unsuitable for immediate only fruit which by its nature and irrespec- consumption in that state, [it] may be provi- tive of its state is totally unfit for human con- sionally preserved (eg, by sulphur dioxide gas, sumption, and as including all fruit which, in brine, in sulphur water or in other preser- even if only in certain states, is fit for human vative solutions).' consumption.

33. I would therefore propose that the Court all sour cherries falling within subheadings answer this question as follows: Annex I to 0809 20 20 and 0809 20 60. Regulation (EEC) N o 2658/87 of 23 July 10 1987, as amended by Regulation N o 2551/93, in particular Note 1 to Chapter 8 of the C N , should be interpreted as meaning that sour cherries which have deteriorated through the formation of mould and incipient fermentation to such an extent that the only 36. Two cumulative and objective conditions economic use to which they can be put is dis­ are therefore laid down by Regulation N o tillation should be regarded as edible fruit 1395/94 in order for the protective measure within the meaning of Chapter 8 of the C N introduced by that regulation to be triggered: and classified under subheading 0809 20 20 or first, it is only imports of sour cherries falling 0809 20 60, depending on the date on which within subheadings 0809 20 20 and 0809 20 60 the customs declaration releasing them for which are concerned; secondly, the counter­ free circulation was accepted. vailing charge is to be levied only if the import price for the cherries is lower than the min­ imum price set.

Question 1

37. From the facts set out in the order for reference it seems that both conditions are met. However, it is for the national court to 34. By this question the national court seeks make this assessment. to ascertain whether Article 1 of Regulation N o 1395/94 should be interpreted as meaning that the countervailing charge must be levied in circumstances such as those pertaining in the main proceedings.

40. That case involved the interpretation of certain provisions of Commission Regulation (EEC) N o 1626/85 of 14 June 1985 on pro- 42. Referring to the objective of the Com- tective measures applicable to imports of cer- munity regulations in issue, the Court ruled tain Morello cherries, 12 and more specifically that '[since] those protective measures may determination of the method of calculating only be taken "to such extent and for such the import price for such fruit when imported length of time as is strictly necessary" ... [i]t from third countries if the Community follows that when the purpose pursued by importer has bought the goods from an inter- the protective measures is achieved, the levying mediary who is not resident in the country of of a countervailing charge is unlawful'. 13 origin of the imported goods. This measure, adopted on the basis of Regulation N o 1035/72 in order to remedy the serious disturbance affecting the Community market owing to the marketing at abnormally low prices of Morello cherries imported from third coun- tries, lays down a minimum import price for 43. The line of reasoning followed by the Morello cherries within the Community and Court in that judgment can be transposed provides for a countervailing charge to be perfectly to the present case in view of the levied on goods which do not comply with similarity of the objectives pursued by the that minimum price. The relevant provisions Community laws in question. in the Dinter case, cited above, are therefore similar to those in the present case.

45. This objective is strictly in accordance with that assigned by the Community legis­ 48. In short, the protective measures pro­ lature to Regulation N o 1035/72, and in par­ vided for in Regulation N o 1395/94 are valid ticular to Article 29(2) thereof, the legal basis only where the abnormally low price being for Regulation N o 1395/94. Article 29(2) of charged is the result of a policy on the part Regulation N o 1035/72 authorises the Com­ of third countries which is causing serious mission to adopt appropriate measures in trade disturbances on the Community market. In with third countries if the market experiences other words, under Article 1 of Regulation or is threatened with serious disturbances N o 1395/94 the only measures which may be which may endanger the objectives set out in adopted are those designed to prevent sour Article 39 of the Treaty. cherries being placed on the Community market at low prices for which third coun­ tries are responsible. Furthermore, when implementing those measures, even if those conditions are met, it is necessary to ensure that the principle of proportionality is observed. 46. Action by the Commission is also subject to compliance with the principle of propor­ tionality. 1 4

54. As regards the second legal requirement, from the details provided by the national court it seems that the particularly low price at which the importer resold the sour cher- ries is the result of circumstances totally 50. It should be pointed out that the sour beyond his control and unrelated to any cherries in issue might possibly be in compe- pricing policy on the part of the exporting tition with the market in fruit intended for third country. This being so, an essential factor distillation rather than the market in fresh for the application of the measure provided fruit. for in Article 1 of Regulation N o 1395/94 is missing. However, it is for the national court to assess the various factors.

51. It is therefore necessary to ascertain first of all whether the price of the fruit imported by the plaintiff in the main proceedings is lower than the minimum price and, if so, 55. It is apparent from the foregoing that whether the Community reference market has levying the countervailing charge in circum- been disturbed or risks being disturbed as a stances such as those in the main proceedings result. would not enable the objective of protection pursued by the protective measures to be achieved. It would therefore be unlawful.

52. Secondly, it is necessary also to determine the reasons why such a price was charged and, in particular, whether that low price is 56. In consequence, the answer to the first due to circumstances beyond the control of question should be that in the circumstances the exporting third country and the plaintiff of this case Article 1 of Regulation N o 1395/94 in the main proceedings. does not apply.

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