61983C0236
OPINION OF MR ADVOCATE GENERAL
VERLOREN VAN THEMAAT
DELIVERED ON 5 JULY 1984 (
1
)
Mr President,
Members of the Court,
1. Introduction
1.1. A new aspect of the problem
This case raises an entirely new aspect of the interpretation of Regulation (EEC) No 1798/75 on the importation free of customs duties of scientific instruments and apparatus. It arises as a result of the separate provisions for scientific instruments and apparatus (Article 3 (1)), on the one hand, and “the components, spare parts and accessories required for the operation of scientific instruments and apparatus which qualify for dutyfree admission” (Article 3 (2)), on the other.
1.2. Scope of the new questions
The new questions broadly cover the following points in particular:
(a)
How must scientific instruments and apparatus be distinguished from “components” etc. in the case of complex scientific equipment composed of various units?
In practice, that question seems primarily of importance where the scientific units of equipment are required in their entirety for particular pure scientific research but are composed of components which perform independent partial functions in that research. If some of those components are manufactured in the Community and others are not, it is important in practice to know whether the whole unit of equipment must be regarded as a single apparatus or whether certain components, and in particular certain components not manufactured in the Community, may be regarded as scientific instruments or apparatus in their own right. In such situations it is thus important to know, on the one hand, what is apparatus and, on the other hand, what is merely a component etc. of such apparatus. In answering those questions, it is naturally necessary to find relatively simple distinguishing criteria which may be easily applied in practice by the customs authorities at the time of customs clearance.
(b)
The abovementioned distinction may be of practical significance even in cases that, as in this instance, concern not complex units of equipment of that kind but one apparatus which comprises various components. In particular the question then arises, however, whether it still qualifies as scientific apparatus (manufactured in the Community) if certain components of that apparatus, which are required for the research in question, are not in fact manufactured in the Community.
(c)
Thirdly, a whole series of questions arises on treatment for customs purposes if it is established that certain material does not itself constitute a scientific instrument or apparatus but is only a component etc. thereof within the meaning of Article 3 (2) of the Regulation. In that context, in addition to the questions of interpretation raised by Article 3 (2) questions may also arise concerning the interpretation of Article 3 (4).
1.3. The case at issue
The dispute that has prompted the questions referred to the Court in this case turns on whether “rotors” and “multiple contact switch units” imported by the University of Hamburg, which are intended for the ultracentrifuge concerned (for research into the molecular weight distribution in synthetic and natural polymers) and were declared for home use on 23 September 1977, arc exempt from customs duties pursuant to Regulation No 1798/75.
Both the ultracentrifuge and the aforesaid components thereof are described in detail in the Order for Reference (pages 4 to 7). It is established that, up to the date of the importation, no complete ultracentrifuges such as that concerned here or rotors or multiple contact switch units were manufactured in the Community that were comparable, in kind or in performance, to the Model E ultracentrifuge produced by Beckmann or to the imported rotors and multiple contact switch unit (page 7, second paragraph of Order for Reference). This aspect is covered by the question set out in point (b) above.
In so far as the components of the aforesaid ultracentrifuge cannot themselves be regarded as scientific instruments or apparatus, however, the question also arises how far those components meet the requirements for duty-free admission (laid down in Article 3 (3) and (4) of the Regulation) of components etc. of scientific instruments or apparatus. This aspect is covered by the questions set out in point (c) above.
1.4. The questions referred to the Court
Question I referred to the Court by the Finanzgericht München [Finance Court, Munich] corresponds to the material part of point (b) of my abstract statement of the problem, and Question II corresponds to point (c). Question I is framed in such wide terms, however, that it in principle also extends to point (a) of my general outline of the problem.
The questions submitted to this Court by the Finanzgericht München by order of 6 October 1983 are as follows:
“I.
How is Article 3 (1) of Regulation No 1798/75 of 10 July 1975 (in its original version) to be interpreted as regards the phrase ‘scientific instruments and apparatus’?
1.
Can it also include materials which are components, spare parts or accessories of a unit of equipment?
If Question 1 is answered in the affirmative :
2.
Does the phrase ‘instruments and apparatus’ include materials of all kinds or only those which are so designed that they can be used for performing a specific operation or for producing specific effects in relation to other articles? What other criteria, if any, are decisive for the definition of that phrase?
3.
In the case of materials which are components, spare parts or accessories of a unit of equipment, does the question whether they are instruments or apparatus depend on whether, in relation to that unit of equipment or its other components, they are
(a)
structurally autonomous (for example, they have their own casing, their own baseplate or the like) and/or
(b)
they perform an independent function?
If Question 3 (a) is answered in the negative and Question 3 (b) is answered in the affirmative:
(c)
Where a component, spare part or accessory performs an independent function within a unit of equipment, is the decisive factor whether it is capable of working on its own, thus, in particular, whether in addition to the operative component itself, it also contains the propulsion mechanism therefor?
4.
Is the decisive factor as regards the scientific character of instruments and apparatus which are components of a unit of equipment, whether those instruments and apparatus, viewed in themselves serve scientific purposes, particularly in the light of their own characteristics and the functions (or parts of functions) performed by them, or is their scientific character established by the mere fact that the unit of equipment of which they form part is scientific and that, since they are specific components of that unit, they can be employed only in conjunction with it and thus, like it, they are used mainly or exclusively for scientific research?
II.
How is Article 3 (2) of Regulation No 1798/75 to be interpreted?
1.
Does the phrase ‘required for the operation of scientific instruments and apparatus’ mean that
(a)
the instruments and apparatus are incapable of functioning without the component, spare part or accessory concerned; or is the decisive factor whether
(b)
the components, spare parts or accessories are specially made for or adapted to the instruments and apparatus concerned and are therefore components, spare parts or accessories specific to those instruments or apparatus?
2.
Does the phrase ‘which qualify for duty-free admission’ entail that the instruments and apparatus for the operation of which the components, spare parts or accessories are required :
(a)
are or were themselves imported, or is it sufficient that they
(b)
satisfy the requirements laid down for admission free of Common Customs Tariff duties, with the result that Article 3 (2) of Regulation No 1798/75 applies even where some of the components of the instruments and apparatus are imported from a nonmember country and some are manufactured in the Community, provided that no instruments or apparatus of scientific value equivalent to that of the instruments and apparatus assembled from those components are manufactured in the Community?”
1.5. Substantive and procedural problems in relation to the replies to the questions submitted
In addition to the purely legal aspects, the questions submitted raise problems of research technology and research, industrial and commercial policy. The purely legal aspects can hardly be treated entirely in isolation, that is to say without taking into account those other factors, as is apparent both from the detailed grounds set out in the order for reference and from the written and oral observations of the Commission.
The categoric nature of the grounds for the order for reference and the complexity of the questions referred to the Court, which is apparent from those grounds, make the lack of any adversarial procedure more keenly felt.
During the oral procedure, the Commission also deplored the absence of any adversarial procedure. The lack of guidance from experts in the field of research technology makes it uncertain, for example, whether the Commission is right in contending that in practice the questions asked are of no importance in 90% of cases. That viewpoint is based in the assumption that in the vast majority of cases the criteria laid down in Article 3 (2) of Regulation No 1798/75 would make it possible to determine easily whether materials which form part of a more extensive apparatus are eligible for exemption from customs duties. Perhaps partly on the basis of that working hypothesis, therefore, the Commission did not consider in detail the wholly different line of argument, leading to different conclusions, which the national court developed in the grounds of its decision. Thus the Commission did not even take full advantage of the opportunity for an adversarial procedure offered by the text of the order for reference. That is regrettable not only in relation to the fruitful dialogue pursued by the Court in the framework of Article 177 but also because the Commission expressly acknowledged during the oral procedure that certain fundamental elements of its argument were open to question, that is to any that different approaches could also quite easily be adopted. I shall return to that point.
Notwithstanding the abovementioned substantive and procedural obstacles to the proper consideration of every aspect of the questions asked, I shall now deal with Questions I and II as raised in the order for reference.
2. Question I in the order for reference
2.1. Question 1.1
In Question 1.1 the Finanzgericht München asks whether the phrase “scientific instruments and apparatus” in Article 3 (1) of Regulation No 1798/75 can also include materials which are ; components, spare parts or accessories of a unit of equipment (“Teile, Ersatzteile oder Zubehör einer apparativen Einheit bilden”). In its observations the Commission first refers to the need that is apparent from Article 3 (1) and (2) for a clear distinction between instruments and apparatus, on the one hand, and components etc. intended for such equipment, on the other. It then states, however, that that distinction is of, no practical importance as regards the right to exemption from customs duties, if the components etc. are intended for instruments and apparatus which are themselves imported free of duty. Therefore in practice the question is important only in so far as the instrument or apparatus of which the materials concerned are intended to form part is not itself eligible for exemption, because instruments or apparatus of equivalent value are manufactured in the Community. In order to provide a criterion which may easily be applied by the customs authorities in those cases — which in the Commission's opinion are rare — the Commission proposes in relation to the particular cases such as that concerned here (
2
) that Question 1.1 should be answered as follows:
“Materials that are intended to serve as components, spare parts or accessories of a scientific instrument or apparatus must not be treated as scientific instruments or apparatus within the meaning of Article 3 of Regulation No 1798/75.”
During the oral procedure the Commission admitted in reply to a question put by me that the weakness in its argument on that point is the assumption that the apparatus in question, even in the absence of components which are essential for research (which are not manufactured in the Community), must still itself be regarded as apparatus within the meaning of Article 3. On the basis of the scheme of the Regulation I consider that assumption highly questionable.
According to that scheme, components of apparatus which is itself eligible for exemption from customs duties will generally also qualify for such exemption. The complete apparatus concerned in the main action (including the two components at issue) certainly qualifies for exemption from customs duty. As appears from the order for reference, it is not manufactured in the Community. That was expressly acknowledged by the Commission during the proceedings. From the point of view of research policy and industrial and commercial policy, there seems little reason to refuse exemption to imports of components which together with the components manufactured in the Community make up the complete apparatus that is required for the research in question. In certain circumstances that might even provide an incentive for the importation of the complete apparatus, even though some of its components are also manufactured in the Community. The Finanzgericht also refers, on page 23 of its order, to that wider context in which its questions should be viewed. The Commission conceded during the oral procedure that that wider background might also justify a different answer from that which it suggested.
Even in purely theoretical terms I regard the reply proposed by the Commission to Question 1.1 as open to challenge. If X denotes the complete apparatus, and y and z respectively the essential components in question, it seems to me plain that X — y — z (that is to say, that part of apparatus which is manufactured in the Community) cannot equal x.
Finally, as I have already observed, the question also concerns components of a scientific “unit of equipment” ( “apparative Einheit”) which consists of a large number of components more or less clearly structurally linked. In addition those components may or may not have an independent scientific function (or an independent mechanical function). They clearly perform an independent scientific function inter alia it they can also be used for scientific research in connection with units of equipment serving entirely different scientific-research purposes or without being structurally connected to the unit of equipment in question. Components with an independent mechanical function, which can also be used for purposes other than scientific research, will by their nature never be eligible for exemption from customs duties as scientific instruments or apparatus because they do not meet the first basic precondition laid down in Article 3 (1) of the Regulation. As regards components with an independent scientific function, however, the question asked is certainly of practical importance.
On the basis of may analysis set out above, I propose that the answer to Question 1.1 submitted by the Finanzgericht should be as follows:
“The mere fact that materials are components, spare parts or accessories of a larger unit of equipment or apparatus for scientific research does not prevent them from being themselves regarded as ‘scientific instruments or apparatus’ within the meaning of Article 3 (1) of Regulation (EEC) No 1798/75 of 10 July 1975 (in its original version).”
2.2. Questions 1.2, 3 and 4
On the basis of its answer to Question 1.1, the Commission considers that the other parts of Question I in the order for reference are devoid of purpose. If the reply to Question 1.1 is as I have proposed, it will of course be necessary to consider those other parts.
On the basis of judgments of the Court and my opinions in Case 300/82 (judgment of 10.11.1983, Gesamthochschule Essen v Hauptzollamt Düsseldorf [1983] ECR 3643) and Case 45/83 (judgment of 26.1.1984, Ludwig-Maximilians-Universität München v Hauptzollamt München-West [1984] ECR 267) I suggest that the decisive factor cannot be whether the materials in question “can be used for performing a specific operation or for producing specific effects on other materials”. Thus the suggestion in Question 1.2 and the grounds set out on pages, 12 to 15 of the order for reference that this is the decisive criterion is incorrect.
Neither can the decisive factor in my opinion be whether the materials in question are structurally autonomous or perform an independent function in the sense that, in addition to the operative component itself, they also contain the propulsion mechanism therefor. Those criteria are therefore in my view also wrongly regarded in Question 1.3 and the grounds therefor (at pages 16 to 18) as criteria which may be relevant. At the present stage of technological development it seems to me clear that structural autonomy as referred to in Question 1.3 (a) depends upon considerations of rationalized construction and economy. In order to determine whether or not material is independent, it seems to me more important that it can be used for different types of research (or other purpose) and can be supplied separately for different equipment. The fact that a component of complex apparatus is driven by the same propulsion mechanism as other components of the apparatus (Question 1.3 (c)) is primarily a matter of rational and economical construction. If such a criterion were considered to be decisive as to the independence of apparatus, all apparatuses operating on the same energy source would have to be regarded as an indivisible apparatus. I agree with the view expressed by the Finanzgericht in the grounds of its order that the single crucial factor in determining whether or not material is independent is the autonomous function of the particular component of the apparatus used in scientific research.
It seems to me therefore that it is also clear what answer must be given to Question 1.4. A component of scientific equipment can be regarded as a scientific instrument or apparatus only if it performs an independent scientific function in the scientific research in question.
The specially-constructed flask for the cultivation and preservation of cancer cells, to which Case 45/83 related, was not a scientific instrument purely because by its structure it was made a component of scientific apparatus. The Finanzgericht München reaches a similar conclusion, on page 19 of the grounds of its order, in relation to the multiple contact switch unit at issue in the present case.
All in all, it is therefore apparent from the Finanzgericht's statement of grounds that Questions 1.2, 1.3 and I.4, second alternative, in the order for reference are intended solely to provide a complete catalogue of the possible theoretical alternatives. From those “multiple-choice” questions (which would be appropriate as an academic test of reasoning), it appears that ultimately, after the less suitable solutions have been rejected, only one answer is really possible, even according to the Finanzgericht's line of reasoning. In that simple answer to the complex questions asked, the decisive criterion must be the independent scientific function of a component of larger scientific apparatus. It will be relatively simple to establish that a component of a larger unit of equipment has an independent scientific function, in particular if that component can also be used for scientific research entirely independently or in conjunction with scientific research or scientific apparatus other than that concerned in the particular case; that is to say, in the very cases in which, according to the Commission, the distinction between instruments and apparatus, on the one hand, and their components etc. on the other, is of practical importance because the conditions laid down in Article 3 (2) are not always fulfilled.
I therefore propose, on the basis of the considerations set out above, that Questions 1.2, 1.3 and 1.4 should be answered collectively as follows:
“Materials which are components, spare parts or accessories of a scientific unit of equipment (‘apparative Einheit’) should themselves be regarded as scientific instruments or apparatus in particular if they can perform a separate scientific function or partial function in pure scientific research either independently or in conjunction with scientific research or scientific or technical apparatus other than that actually at issue.”
3. Question II in the order for reference
3.1. The text of the relevant provision
All the parts of Question II in the order for reference relate to the text of Article 3 (2) of Regulation No 1798/75 which provides as follows:
“Subject to the production of satisfactory evidence, the duty-free admission referred to in paragraph 1 shall apply to the components, spare parts and accessories required for the operation of scientific instruments and apparatus which qualify for duty-free admission.”
3.2. Divergences between the Dutch, English, French and German versions
As is apparent from the order for reference, the final part of the German version of that provision is drafted more narrowly than the Dutch. The English and French versions, on the other hand, have the same tenor as the Dutch; they do not require that the instruments or apparatus in question actually be admitted free of duty (as is required according to the German text) but rather that such admission free of duty would be permissible.
According to the Commission (at page 9 of its written observations), the subsequent Regulation (EEC) No 1027/79 clearly opted in all the language versions for the tenor of the narrower German version of the regulation applicable in this case. The new Regulation of 1979 is, however, based on an amendment, ratified in 1976, to the Florence Agreement concluded under the auspices of Unesco. I consider it contrary to basic principles of interpretation to rely on a subsequent restrictive amendment of the provision which is applicable in this case so as to adopt a more narrow interpretation of that provision than is evident from the language versions applicable in the majority of the Member States. As the Finanzgericht rightly remarks on page 22 of the order for reference, the meaning and purpose of the Regulation in question also lend support to an interpretation corresponding to the English and French versions of Article 3 (2). They refer to instruments or apparatus “which qualify for duty-free admission” and “admissible eux-mêmes en franchise”. As I have already noted, the Dutch version has the same tenor.
Furthermore, let me say that in my opinion the new version of Article 3 (2) does not necessarily dictate a different interpretation. According to Article 3 (2) (a) of the amended text, duty-free admission is to apply to “spare parts, components or accessories specifically suitable for scientific instruments or apparatus, provided that these spare parts, components or accessories are imported at the same time as such instruments and apparatus, or, if imported subsequently, that they can be identified as being intended for instruments or apparatus previously admitted duty free or entitled to duty-free entry”. The passage which I have emphasized in that amended text is, it seems to me, even after the entry into force of the new Regulation, certainly open to the same interpretation as I have put forward for the original version. In addition to the arguments relating to industrial and commercial policy set out in the order for reference and the Court's written question to the Commission, the special circumstances of this particular case also support that interpretation. As I have already noted, it is established (and also acknowledged by the Commission) that the complete apparatus for which the components in question are intended is eligible for duty-free admission but was not in fact imported free of duty in this case. At the same time I have pointed out above that the components of apparatus which are essential for research can scarcely be theoretically regarded as components of incomplete apparatus from which those components are missing and which cannot be imported free of duty without those components because (assuming that such incomplete apparatus can none the less be regarded as apparatus) a product of equivalent value to that incomplete apparatus is manufactured in the Community. The interpretation of Regulation No 1027/79 advocated by the Commission nevertheless offers no solution in relation to inter alia complex scientific apparatus consisting of many components where some of the components required (which do themselves constitute scientific apparatus) are manufactured in the Community and others (which again do not constitute scientific apparatus) must be imported. It seems to me clear that a corollary of the aim of promoting high-quality scientific research consistent with the latest international developments in research technology is the possibility of importing such components of complex apparatus free of duty. The text of Regulation No 1027/79 in my view does not exclude the duty-free admission of such components. However, if the provision applicable in this case is itself regarded as conclusive, the Court need not consider that problem in its ruling in the present case.
3.3. The second problem of interpretation
In accordance with general principles of interpretation, the wording of the new Regulation quoted above may. as a rule which is more favourable to the persons concerned, be relevant to the answer to another question raised by the Finar.zgericht. That question (Question II.1) concerns the interpretation of the phrase “required for the operation of scientific instruments and apparatus” in the version of Article 3 (2) which applies in this case. The Commission proposes that that phrase should be interpreted in the light of the new Regulation as meaning that components, spare parts and accessories are “required” within the meaning of the original version of Article 3 (2) “where they have been specially made for or adapted to” the (completei apparatus. However, in my view such an interpretation may in certain circumstances actually be narrower than is called for by the original version of Article 3 (2). Prom a technological and linguistic point of view, it seems to me that the more obvious interpretation of the words “required for the operation of scientific instruments or apparatus” is that the components in question must be required for the complete apparatus to operate as well as possible (in relation to the intended research) which would be the case inter alia, but not exclusively, if those components were specially made for or adapted to the complete apparatus. Even if the components can at the same time be used in conjunction with research or apparatus other than that concerned in the particular case, however, it is quite conceivable that those components are nevertheless required for the complete apparatus to operate as well as possible. The finding that no components of equal value are manufactured in the Community may then constitute additional evidence of their being required. However, such a finding is not prescribed as an additional condition in Article 3 (2) of Regulation No 1798/75.
3.4. The reply to Question ILI
The questions submitted by the Finanzgericht on the interpretation of Article 3 (2) of Regulation No 1798/75 relate exclusively to the ateas of doubt referred to in Sections 3.2 and 3.3 of my Opinion. In view of my proposed reply to Question I, the reply to Question II probably concerns primarily the multiple contact switch unit in this case.
Question II. 1 can, in the light of my observations in Section 3.3, be answered as follows:
“The phrase ‘required for the operation of scientific instruments and apparatus’ means that the components, spare parts or accessories in question are required for the complete instrument or apparatus in question to operate in accordance with the latest international developments in research technology, which will be the case inter alia, but not exclusively, if the materials concerned are specially made for or adapted to the complete instruments or apparatus.”
The principle of reciprocity referred to in the Commission's written reply of 12 April 1984 to the written question put to it by the Court also cannot be raised as an objection to such an interpretation. The Community itself bears sole responsibility for its own scientific__ industrial and commercial policies. The Community is fully entitled, if the pursuit of high-quality pure scientific research so requires and considerations of industrial and commercial policies are not opposed thereto, to grant wider exemptions from duty than are mandatorily prescribed by the Unesco Agreement in question. Thus it is only the text of the rules adopted by the competent Community institutions after consideration of the aforesaid policy aspects that is conclusive.
The interpretation that I have proposed of the provision in question is in my view supported by the methods of interpretation generally applied by the Court.
3.5. Question II.2
Question II.2 should, in the light of the considerations set out above in Section 3.2, be answered as follows:
“ T h e phrase ‘ which qualify for duty-free admission ’ entails that the complete instruments or apparatus concerned either are themselves imported free of duty or satisfy the requirements for such duty-free admission, with the result that Article 3 (2) of Regulation (EEC) No 1798/75 applies even where some or the components of those complete instruments or apparatus are imported írom a non-member country and some are manufactured in the Community provided that no instruments or apparatus of scientific value equivalent to that or the complete instruments and apparatus assembled from those components are manufactured in the Community. ”
That interpretation cannot be objected to on the grounds of either a subsequent, possibly more restrictive regulation or the principle of reciprocity. The latter principle cannot be invoked in this connection, in particular because there is no indication in the recitals in the preamble or in the body of the Regulation applicable in this case that it is intended to apply only in so far as the other contracting parties also grant exemption from duty in similar circumstances. On the contrary, it is clear from the first recital in the preamble to Regulation No 1798/75 that the chief motive for the rules was the Community efforts to facilitate the exercise of scientific research. Moreover, a restriction can be inferred from the third recital in the preamble solely as regards the scope of the duty-free admission of (complete) instruments or apparatus. By contrast, it is not possible to infer from that or any other recital in the preamble to the Regulation or from the body of the Regulation itself any intention to make the duty-free admission of necessary components of such an instrument or apparatus dependent on the unavailability of components of equivalent value in the Community or on the fulfilment of any conditions other than those expressly laid down in Article 3 (2) of the Regulation.
Finally, my views are not affected by the arguments derived by the Commission from the necessity (which I recognize) that the criteria for the application of Article 3 (2) be relatively simple to apply in practice. As a rule, in the application of the criteria which I have proposed for the interpretation of Article 3 (2), it will suffice to find that the components in question are intended for larger apparatus which is being used in university research or for which such a commission has been given. The further proof that that apparatus has itself also been imported free of duty need not be furnished, however. The criteria which I have proposed are, therefore, easier, rather than harder, to apply than the criteria put forward by the Commission.
(
1
)	Translated from the Dutch.
(
2
)	In particular the Commission thus takes no account of point (a) of my statement of the problem in Section 1.2 of this Opinion, although it is in fact also covered by Question 1.1 asked by the national court. The Commission considers that that wider question can be answered only on the merits of each individual case. In its written observations, however, it concedes that there may also be some doubt in other cases as to whether material is in fact intended to form part of a particular scientific apparatus (which will have to be resolved in each individual case).