C-42/99

1 — So called because it combines in one nomenclature the two separate Community nomenclatures (the Common Customs Tariff nomenclature and NIMEXE, the nomenclature of goods for the external trade statistics of the Community and statistics between Member States). The previous system, originally known as the Brussels Nomenclature and subse- quently as the Customs Co-operation Council Nomencla- ture, was based on a similar structure (although fewer States The legislative framework were parties); the case-law of the Court concerning those nomenclatures is accordingly still of relevance to the interpretation of the Combined Nomenclature. 2 — The Harmonised Commodity Description and Coding System, introduced by the International Convention of 14 June 1983, approved for the Community by Council Decision 87/369/EEC of 7 April 1987 concerning the conclusion of the International Convention on the Harmo- nised Commodity Description and Coding System and of the Protocol of Amendment thereto, OJ 1987 L 198, p. 1. 2. Within the Community, goods are clas- 3 — Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common sified for customs tariff and statistical Customs Tariff, OJ 1987 L 256, p. 1, as amended for the purposes in accordance with the Combined period in question by Commission Regulation (EEC) No 3174/88 of 21 September 1988 amending Annex 1 to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff, OJ 1988 L 298, p. 1. * Original language: English. 4 — Anicie 3(1) of Regulation No 2658/87.

'2. Products obtained by the concentration of whey and with the addition of milk or milkfat are to be classified as cheese in heading No 0406 provided that they 3501 10 90 — — Other.' have the following three characteris- tics:

6. Regulation No 2658/87 provides for the (a) a milkfat content, by weight of the Commission to be assisted by a Committee dry matter, of 5 % or more; on Tariff and Statistical Nomenclature; the Commission, acting pursuant to a pre- scribed procedure involving the Commit- tee, may adopt Explanatory Notes. 5The Explanatory Notes to the Combined Nomenclature of the European Communi- (b) a dry matter content, by weight, of at least 70% but not exceeding 85%; and 5 — Articles 7, 9 and 10.

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ties in the version applicable at the material toms Organization) 'as guides to the inter- time 6 state as follows: pretation of the Harmonised System'. 8 The Explanatory Notes to Heading No 3501, (A), (1), in the edition applicable at the material time, 9contained no note relevant to the issue before the Court in the present case. The Notes to that heading in the '3501 Casein, caseinates and other second edition, 10 however, provide:

casein derivatives; casein glues

Facts fication made by the checker, rechecker and conference of recheckers and the judgment of the Tribunal Técnico Aduaneiro de Primeira Instância (Specialised Customs Court of First Instance). ERU Portuguesa appealed unsuccessfully to the Tribunal 8. In March 1989 the company Fábrica de Tributário de Segunda Instância (Tax Court Queijo ERU Portuguesa Ld.a (hereinafter of Second Instance) and thence to the 'ERU Portuguesa') imported from Den- Supremo Tribunal Administrativo. mark into Portugal 1 863 boxes of an item described on the exporter's invoice as 'Icelandic skimmed milk cheese' under customs subheading 3501 10 90. It appears to be common ground that the product has the following composition: 54% water, 0.9% fat, 5.7% phosphorus, 2% salt, and casein. 1 1According to ERU Portuguesa, it 10. The Supremo Tribunal Administrativo is produced by the addition of rennet to considered that there was a conflict skimmed milk; the resulting coagulated between the notes to Chapter 4, which in casein is compressed into hydrated casein its view specify 'a dry matter content ... of flakes. It is soluble only in an alkaline at least 70% but not exceeding 85%' for medium, not in water, and is intended for classification under heading 0406, and the use in the manufacture of dietetic pro- Explanatory Notes to the Combined ducts. 12 At the hearing it was stated more Nomenclature, which state that caseins specifically by ERU Portuguesa that the containing by weight more than 15% water product was intended to be processed into are included under heading 0406. More- cheese if it was of a suitable quality. over the fat content (1%) of the product at issue is less than the minimum (5%) required for heading 0406 and the dry content (by inference, not exceeding 46%) does not attain the minimum 70% required for heading 0406. It accordingly stayed the proceedings and referred the following 9. In February 1991, the Tribunal Técnico questions for a preliminary ruling: Aduaneiro de Segunda Instância (Specia- lised Customs Court of Second Instance) classified the goods under customs sub- heading 0406 90 11, confirming the classi-

(b) they have a dry matter content, by weight, of at least 70% but not exceeding 85%; and 12. The written observations of ERU Por- tuguesa and the Commission focus primar- ily on the apparent inconsistency between the Explanatory Notes relating to subhead- ings 3501 10 10 to 3501 10 90 and the chapter notes relating to heading 0406. (c) they are moulded or capable of Since the product has a moisture content being moulded? of 54%, it cannot be classified under subheading 3501 10 90 without conflict- ing with those Explanatory Notes. Since it has a fat content of 0.9%, however, neither can it be classified under heading 0406 without conflicting with the chapter notes. 2. Having regard to Commission Regula- tion (EEC) No 3174/88 are the imported goods (which have the fol- lowing composition: 54% water, 0.9% fat, 5.7% phosphorus, 2% salt and casein) to be classified under customs heading 3501 10 90 0 00 000 as 13. ERU Portuguesa concludes that the casein — other — or under customs Explanatory Notes cannot be the basis for heading 0406 90 11 0 10 000 as other classification of the product under head- cheeses?' 13 ing 0406: the chapter notes contain no relevant exception and the Explanatory Notes had not been properly circulated in 13 — Article 199(3) of the Act concerning the conditions of accession of the Kingdom of Spain and the Portuguese 1989, since they were not published in any Republic and the adjustments to the Treaties (OJ 1985 L 302, p. 23) authorised Portugal in certain circumstances official journal or bulletin. In the alterna- to include within the Combined Nomenclature national tive, ERU Portuguesa submits that, since subdivisions existing at the time of accession. That is presumably the explanation for the extra digits in the the product cannot be classified under classifications referred to by the Supremo Tribunal Admin- heading 0406 since it does not satisfy the istrativo, which do not appear to affect the answers to the questions put by that court. three conditions set out in the chapter

15. Portugal, however, makes the point that the three conditions set out in the chapter notes to heading 0406 are there expressed to apply only to products 18. The Commission accepted that the obtained by the concentration of whey notes to Chapter 4 could be disregarded. and with the addition of milk or milkfat. It put forward an entirely new argument to Portugal asserts that the product in ques- the effect that, since the phosphorus con- tion was not so obtained; it does not tent of the product was, at 5.7%, too high therefore have to satisfy the three condi- for cheese, the product should not in any tions set out in the chapter notes in order to event be classified under heading 0406. be classified under heading 0406. Since the Nor was it a casein, since with a water product contains more than 15% by weight content of 54% it exceeded the maximum of water, by virtue of the Explanatory moisture content for casein of 10% set by Notes to Chapter 35 it should accordingly Directive 83/417. 14 In the Commission's be classified under heading 0406. view, the product should be classified under subheading 2106 90 99, 'Food prepara- tions not elsewhere specified or included — Other — Other'. The residual heading suggested in the alternative by ERU Portu- guesa in its written observations is, accord- 16. Portugal attaches to its observations ing to the Commission, inappropriate, as it the letter of 27 April 1989 in which ERU is intended to encompass turtle eggs and Portuguesa contested the original classifi- other such products. cation of the product. It is stated in that letter that the product was made from skimmed milk to which rennet was added. 14 — Council Directive 83/417/EEC of 25 July 1983 on the Since the raw material from which the approximation of the laws of the Member States relating to certain lactoproteins (caseins and caseinates) intended product was made appears to be crucial in for human consumption, OJ 1983 L 237, p. 25.

19. ERU Portuguesa also accepted at the purposes, classification shall be determined hearing that the notes to Chapter 4 were according to the terms of the headings and irrelevant since the product was not any relative section or chapter notes and, obtained by the concentration of whey provided such headings or notes do not and appeared to accept the Commission's otherwise require, according to the follow- new argument that the phosphorus content ing provisions', none of which appears of the product was too high for it to be relevant to the resolution of this case. classified as cheese. It added that no laboratory analysis had been produced to corroborate the composition of the product and concluded that, since in its view the known composition of the product was not 22. The Court has, furthermore, consis- sufficient to identify the nature of the tently held that, in the interests of legal product, it was not possible to establish certainty and ease of verification, the its correct classification in the Combined decisive criterion for the customs classifica- Nomenclature, in which case the importer's tion of goods is in general to be sought in classification under heading 3501 should their objective characteristics and proper- be retained. ties, as defined in the relevant Combined Nomenclature headings and section or chapter notes. Likewise, for the purpose of interpreting the Combined Nomencla- ture, both the chapter notes and the Explanatory Notes are important means for ensuring the uniform application of the tariff and as such may be regarded as useful Analysis aids to its interpretation. 15 Those Expla- natory Notes include both the notes drawn up, as regards the Combined Nomencla- ture, by the European Commission and, as regards the Harmonised System, by the 20. In the light of the replies to the Court's Customs Co-operation Council. Although question, an answer to the referring court's an important aid to the interpretation of first question must be regarded as no longer the scope of the various tariff headings, the necessary for the resolution of the main Explanatory Notes do not have legally proceedings. I shall accordingly turn to the binding force, so that it is necessary, where second question referred, namely the cor- appropriate, to examine whether their rect classification for customs purposes of content is in accordance with the actual the product at issue: in short, should it be provisions of the Common Customs Tariff classified as casein or as cheese for proces- and whether they alter the meaning of sing? those provisions. 16 The Court has also held that the Explanatory Notes drawn up by

26. The principal definition of 'cheese' in the New Shorter Oxford English Diction- 23. In this case, the terms of the headings ary 19 is 'the curds of milk (coagulated by do not provide any relevant information rennet) 20 separated from the whey and and there are no relevant section or chapter pressed into a solid mass'. 21 It has been notes. There is however an Explanatory made by the coagulation of milk since Note to Chapter 35 which expressly states ancient times: Homer's Odyssey recounts that caseins containing more than 15% of how the Cyclops Polyphemus 'sat down to water are to be classified under head- milk his ewes and bleating goats, which he ing 0406. The issue therefore is whether did methodically, putting her young to each there is any reason not to apply that note. mother as he finished. He then curdled half

the white milk, gathered it all up, and the fat globules and forcing out the whey.... stored it in wicker baskets...' 22 in his cave Once the curd has formed it is worked in where Ulysses and his men found it. We do one way or another to produce the char- not know what coagulating agent Polyphe- acteristic texture of the particular type of mus used; the use of rennet in Roman times cheese'. 24 If, as ERU Portuguesa argues, is however recorded by Columella in Rei the product should be classified as casein Rusticae (On Rustic Matters, c. AD 65), solely because it is the result of such a who wrote that milk process, there would appear to be little scope for heading 0406; certainly the vast majority of the cheeses individually listed under that heading are produced in this way. 'should be curdled with rennet obtained from a lamb or kid, although it can also be done with the flower of the wild thistle or the seeds of the safflower, and equally well with the liquid which flows from a fig-tree 29. There must therefore be further objec- if you make an incision in the bark while it tive characteristics and properties of casein is still green.' 23 beyond the mere fact that it is the result of coagulating milk.

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31. The Council has recognised that 'the obtained from skimmed milk by coagula- characteristics of casein and caseinates and tion in an acidic environment or in the those of cheese show similarities' in the presence of rennet. The product which is context of the voluminous 28 Community left is insoluble and is then washed and legislation regulating the granting of aid for dried'. 35 the processing of skimmed milk into casein and caseinates. 29 The basic regulation in force at the material time 30 defines 'casein' as 'the product washed and dried, insoluble in water, obtained from skimmed milk by coagulation (e.g. by means of acids or 32. There is also, as mentioned by the rennet) or obtained from raw casein'. 31 Commission at the hearing, a directive Regulation No 756/70, 32 the regulation issued by the Council under Article 100 of implementing the basic regulation applic- the EC Treaty (now Article 94 EC) on the able at the time of import of the product in approximation of the laws relating to case- question, imposes certain requirements as ins and caseinates. 36 That directive seeks to to the composition of casein for those 'determine, at Community level, the rules purposes including for example a maxi- which must be observed as regards the mum humidity content of 12% for rennet composition and labelling of these pro- casein. 33 The effect of that legislation was ducts'. 37 Article 1(2) defines 'caseins' as at issue in Meggle; 34 describing the back- 'the principal protein constituent of milk, ground to an action for damages brought washed and dried, insoluble in water and by a producer of casein and caseinates obtained from skimmed milk by precipita- against the Council, Advocate General tion' by a number of methods including the VerLoren van Themaat stated: 'Casein is use of rennet. Section III of Annex I pre- scribes the standards applicable to edible rennet casein. Those standards include under the heading (A) 'Essential factors of composition' a maximum moisture content of 10%. 38

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case on the labelling of foodstuffs 39 and in 'skimmed milk cheese' on the exporter's deciding whether a food additive presents a invoice and intended for further processing risk to public health or meets a real need, into dietetic cheese, is to be classified under especially a technological one. 40 The stan- subheading 0406 90 11 as (unspecified) dard for edible casein products in the cheese for processing. current version of the Codex (Codex stan A-18-1995) defines 'edible rennet casein' as 'the product obtained after washing and drying the coagulum remaining after separ- ating the whey from skimmed milk which has been coagulated by rennet or by other 35. Before concluding this Opinion, I coagulating enzymes' and in the composi- would like to make two points about tion table sets a maximum moisture of specific submissions made at the hearing 12%. by, on the one hand, the Commission and, on the other hand, ERU Portuguesa.

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for the manufacture of dietetic products. I supplied by the national court in its order would note that it is not helpful to the for reference. It is only the latter which Court or to the party concerned for a party would have any competence to consider so to contradict or deny its own assertions. new factual arguments advanced by a The Court must act on the information party.

Conclusion

41. I accordingly conclude that the questions referred by the Supremo Tribunal Administrativo, Portugal, should be answered as follows:

A product produced by the addition of rennet to skimmed milk, composed as to 5 4 % water, 0.9% fat, 5.7% phosphorus, 2 % salt, and as to the remainder casein, and intended for use in the manufacture of dietetic products, is to be classified under subheading 0406 90 11 of the Combined Nomenclature as 'Other cheese: — For processing'.