OPINION OF MR ADVOCATE-GENERAL TRABUCCHI

DELIVERED ON 26 MAY 1976 (*1)

Mr President,

Members of the Court,

1. The proceedings before the Finanzgericht Hamburg, which has referred a question to this Court under Article 177 of the EEC Treaty, are concerned with the customs classification of cranberries imported into Germany from Finland in 1974. At the material time in the main action, cranberries, which come under tariff heading 08.08 B of the Common Customs Tariff, covering fresh berries, could be imported into the Community from Finland free of customs duty whereas frozen cranberries, which come under tariff heading 08.10 B, were subject to a duty of 20 %.

During the examination of the goods concerned when they crossed the frontier, the German authorities noted that the product appeared to constitute a very hard mass, in a frozen and crystallized condition, although it was frozen to a lesser extent on the outside and there were indications that it was thawing out. The authorities considered that, as the product had been subjected to a freezing process, they could not treat the cranberries as fresh fruit within the meaning of the Common Customs Tariff and had therefore classified them under heading 08.10 B.

In an objection lodged against this decision, the importer contended that freezing had been carried out only to avoid damage to the goods during transit and not with the object of delaying the release of the product to the market.

In accordance with long-established precedents of this Court, based on considerations of practicality and efficiency in the execution of their duties by the customs authorities, classification is made on the basis of objective criteria which are easy to apply and in particular, on the basis of the appearance of the produce when being cleared through customs (see, for example, the judgment in Case 36/71 Günter Henck, [1972] ECR 198 and, recently, the judgment of 10 December 1975 in Case 53/75, Vandertaelen). For this reason the purposes for which an exporter or importer prepares the goods in a particular way, with reference especially to the use to which the goods are to be put are, in view of the difficulty which would be experienced in checking the truth of each and every allegation on the subject, normally irrelevant except where provision is expressly made for the intended use to be the criterion, in which case proper checks must be carried out.

In the light of this general rule, it must, accordingly, be conceded that the fact that the object of freezing the product was not to keep it fresh in order to delay its entry on the market but as claimed by the importer merely to afford it better protection during transit cannot avail to defeat the objective fact that, at the frontier, the product appeared to be almost completely frozen, in other words in a solid state as a result of the refrigeration to which it had been subjected before despatch.

The importer concerned states, however, that, if classification has to be made exclusively on the basis of the appearance of the goods at the time of customs inspection and as the product does not travel in refrigerated vans, an inspector could, in a case of the kind with which we are concerned, classify the goods in one way or another simply by advancing or deferring the date of his examination.

It is true that the effect of delay in the customs examination might have been that the goods were no longer frozen. On the other hand, the Commission's agent stated that, as a result of refrigeration, the product undergoes irreversible changes, which are indicated by actual external characteristics such as the consistency and firmness of the fruit and its reduced sugar content, all of which, in the event of disagreement, can also be scientifically checked by means of an examination of the structure of the tissues. These changes would therefore make it impossible to designate as fresh fruit a product which had been subject to a refrigeration process even if it were to be presented in a thawed state at the customs.

In order to settle an issue involving customs classification, a court naturally tries to find a functional explanation of the differences in the tariff rates attaching to the two tariff headings the limits of whose respective application it is called upon to define.

In the present case, since it is inconceivable that goods subject to refrigeration can acquire greater intrinsic value, the conclusion must be drawn that the heavier duty can be explained only by the greater value, based on the wider marketing opportunities, which the state of long-term preservation may afford them. Those smaller quantities of fresh fruit which, as such, may be intended for quicker absorption of the market will continue to be subject to lower duties. In the light of this, it is clear that the concept of fresh fruit is contrasted with that of fruit subjected to a system of preservation through refrigeration; it can accordingly be stated that fresh fruit is confined to fruit which has never been frozen. The arbitrary fact of crossing a frontier certainly does not constitute a decisive point in time for distinguishing between the two types which must be established at that moment so that they may receive different customs treatment.

2. It must be borne in mind that the Common Customs Tariff provides for an autonomous duty of 9 % on fresh cranberries, compared with an autonomous duty of 30 % on frozen cranberries. Nevertheless, within the framework of the so-called ‘Dillon Round’, the Community had agreed to reduce to zero the customs duty on fresh cranberries coming from countries, such as Sweden and Finland, which had made a request to this effect. This Community concession came into force as part of a package of reciprocal concessions.

For anyone who would interpret the Common Customs Tariff in a case involving a ‘conventional’ duty, which is the outcome of negotiations, the need to avoid, so far as possible, an interpretation which results in rendering the concession made by the Community inoperable in practice must also be borne in mind; but concern on this point, which is justified by respect for the principle of good faith which the Community must observe in the fulfilment of its international obligations, must not lead him to exceed his powers as a mere interpreter of the intentions of the Community legislature. In view of this, in cases where transportation of the product into the Community could not normally take place unless it were previously frozen, thus preventing it from deteriorating to an economically intolerable extent, the question arises whether the objective criterion used for the purpose of the tariff classification of goods, and to which I referred earlier, ought not to be modified somewhat so as to give effect to the exception agreed to by the Community.

I have too little information on the technical aspects of the question. It may well be (and no-one dismissed the suggestion during the proceedings) that ordinary chilling, which consists in keeping the product at a temperature of 0° , thus avoiding its becoming frozen and the consequential changes which prevent it from being classified in the category of fresh products, may suffice to remove those risks of damage or deterioration during transit which the importer claims to have intended to obviate through freezing. It is also possible that freezing the product is more economical because this enables it to be transported without the need to use refrigerated vehicles. But this would certainly not constitute valid justification for extending the meaning of fresh cranberries to include cranberries which, in fact, merely for reasons of economic expediency and not on account of any unavoidable technical requirement, had been frozen before being put on the road.

On the other hand, if it is true that the freezing process produces irreversible changes in the product, with the result that even when it has thawed out, it can on no account be regarded as a fresh product in the sense in which this term is normally understood by custom and practice in the trade, this means that in no case would it be possible for a product which, when it crossed the frontier, was in a frozen condition or even in the process of thawing out, to be classified under customs heading 08.08; this would apply even if the product, which was the subject of a tariff concession, could normally be transported to the Community only when it was in a frozen condition by the States which have taken advantage of the concession. In these circumstances, it could be held that the States concerned had not taken sufficient account of the requirements of transportation and that they had been correspondingly unwise not to try to obtain a tariff concession under heading 08.10 which covers the frozen product. However, I do not know whether or not this request was, in fact, made and whether the Community simply did not grant it for reasons of internal or external economic policy of which I am unaware and upon which, in any case, I am not in a position to express an opinion. It may, therefore, also be assumed that, in limiting the concession to fresh cranberries, the Community took into account the difficulty of transporting them when they are fresh and, consequently, the real cost of the concession for the Community economy. It would, accordingly, be an interpretation of the Common Customs Tariff which is liable to distort the real meaning of the words, in the sense in which they are usually used, of the customs concepts involved, to confer on products of third states advantages greater than those which those States have been able to obtain as a result of tariff negotiations and are therefore greater than those which the competent Community authorities meant to give them on the basis of a reasonable interpretation of tariff terminology.

I am not in a position to dismiss either of these conflicting possibilities. In saying this, I wish merely to indicate that the consideration, to which I drew attention at the outset, relating to the real meaning of the tariff concession made by the Community or which its members hoped to obtain for the products concerned, cannot constitute a valid basis for the interpretation of customs terminology.

Legal clarity and certainty require that its meaning shall be determined exclusively within the framework of the Community tariff system, wholly without regard to haphazard changes in the level of the duties applicable thereunder within the framework of international tariff agreements.

3. During the hearing, the representative of the Commission stated that, as the product concerned was in a frozen condition, it could not in any case compete in the Community with the corresponding fresh Community product, because a product of this kind is never marketed as fresh. The Commission also stated that the product would not compete with the corresponding frozen Community product because the latter would be used in the production of jam or preserves. This statement takes for granted that the Community product is never put to this latter use, a supposition which, in my view, it is dangerous to accept in its entirety.

However that may be, on the assumption that the imported product involved does not compete with the Community product, it occurs to me that there might perhaps be justification for giving the concept of ‘Berries fresh’, a wider meaning than which I have recommended in order to exempt from a duty products against which the Community economy has no need of protection.

Generally speaking, the first comment to be made is that the purpose of the duties in the Common Customs Tariff goes beyond any protection they may offer. A Community duty, such as that laid down for frozen cranberries, the amount of which represents the arithmetic result of the average of the previous national duties whose function was presumably protectionist even when, owing to a change in economic circumstances, it no longer fulfils that function, nevertheless remains of importance to the Community, especially in terms of the common commercial policy, as a bargaining counter in tariff negotiations with third States. This fact alone shows how little justification there would be for basing the interpretation of a customs concept and, consequently, the applicability or otherwise of a duty, on considerations based on the competitiveness or otherwise of the imported product.

Secondly, I take the view that it would be wrong in law and dangerous for the economy of the Community to relate the scope of a customs concept to the aforesaid consideration; I say this not only because the situation regarding the market in a given product may change within the Community but above all because, when the customs heading concerned embraces a multiplicity of products, as is, in fact, true in the case of heading 08.08, an interpretation which holds equally good for various products under the same heading (in the present case, ‘Berries, fresh’) on the basis of the competitive position of one of them would affect the interpretation to be applied to other products which were in a position of greater competitiveness compared with the corresponding Community product. It must be borne in mind that the level of customs duties laid down for fresh products under heading 08.08 is appreciably lower than that of the duties applicable to the corresponding frozen products under heading 08.10. It may, therefore, be of real importance to the Community that a clear distinction should be drawn between products which are fresh and which must, therefore, be sold as such and frozen products, which means that we must avoid a widening of the concept of fresh products which would remove the greater protection which the different levels of duty applicable to the two customs headings involved were intended to secure for Community products other than that which is the subject of this case.

In order to avoid an outcome which would be unsatisfactory for Community products with which we cannot concern ourselves in this case, in my opinion the Court must, in interpreting the concepts of the Common Customs Tariff involved here, in principle forswear any consideration connected with the competitive position of the particular product which is the subject of the question from the national court.

As regards, in particular, the proper meaning to be attached to the concept of frozen berries, if it were to be conceded that a product which had been previously frozen were to be treated as a fresh product solely owing to the fact that it was presented to Community customs in a thawed state, it might be difficult both in theory and in practice to avoid treating as fresh also fruit which had been picked much earlier and which had been kept fresh by refrigeration. This would deprive the concept of fresh fruit of all meaning.

If, on the other hand, it is true that, as the Commission informs us, there is no possibility of the cranberries with which we are concerned competing in the Community with fresh cranberries, it might be assumed that importers of these cranberries would avoid placing them on the market as fresh fruit, not through considerations of business ethics but for the simple reason that the product which had been frozen (even though, as is alleged to have happened in this case, this was only for a short time) could, on account of its external characteristics, no longer be sold as fresh fruit. If a consumer is able to tell fresh cranberries from thawed ones, one must assume that a customs official would not find it difficult either.

But even when the external appearance of a thawed out product is the same as that of the fresh product it would not be permissible to classify the former as the latter for customs purposes; this is because, as is implied by the Explanatory Notes to the Brussels Nomenclature on tariff heading 07.02, to which the Explanatory Notes to tariff heading 08.10 refer, these would still be goods which have only the appearance of being fresh. On the other hand, according to the evidence of the Commission, there has been an irreversible change in its texture which, even though this has not resulted in destroying the cellular structure, can in any case be objectively determined.

For these reasons, I recommend the Court to answer the request for a preliminary ruling made by the Finanzgericht Hamburg by ruling that cranberries which have been subjected to freezing, even if merely for the purpose of transportation, and regardless of whether they are still frozen at the time of customs clearance, cannot be classified as fresh berries within the meaning of heading 08.08 B of the Common Customs Tariff.

(*1) Translated from the Italian.