Opinion of Mr Advocate General Darmon delivered on 17 January 1992. - Hamlin Electronics GmbH v Hauptzollamt Darmstadt. - Reference for a preliminary ruling: Hessisches Finanzgericht - Germany. - Common Customs Tariff - Temporary suspension of autonomous duty - Reed switches. - Case C-338/90.



European Court reports 1992 Page I-02333



Opinion of the Advocate-General

++++

Mr President,

Members of the Court,

1. Council Regulation (EEC) No 3696/88 of 18 November 1988 (1) temporarily suspended the autonomous Common Customs Tariff duty on a number of products, in particular "reed switches in the form of a glass capsule containing not more than three electrical contacts on metal arms and a small quantity of mercury". (2) Those switches come under subheading 8536 5000 9930.

2. The Hessisches Finanzgericht (Finance Court, Hesse) has referred to the Court the question whether that definition also encompasses reed switches containing no mercury.

3. Between June and December 1989 Hamlin Electronics imported reed switches containing no mercury from the United States. Pursuant to the above regulations, the Hauptzollamt (Principal Customs Office) Darmstadt at first suspended the customs duty for that type of product. By a post-clearance recovery notice, however, it subsequently demanded payment of duty in the amount of DM 152 702 on the ground that switches containing no mercury fall not under the abovementioned subheading but under subheading 8536 5000 9990 in respect of which duty had not been suspended. Hamlin Electronics applied to the Hessisches Finanzgericht for a declaration that that notice was null and void.

4. In support of its claim that the description set out in CN code ex 8536 5000 encompasses switches containing no mercury, the plaintiff in the main proceedings invokes three sets of arguments based on the actual wording of the measure, its ratio legis and Article 130r of the EEC Treaty. Let us examine them in turn.

5. First of all, does it follow from a grammatical analysis of the description that it covers switches containing no mercury?

6. According to the plaintiff in the main proceedings, the problem is essentially as follows: the term "containing not more than" is common to both limbs of the phrase following it, hence the phrase must be read as switches containing not more than (a) three electrical contacts and (b) a small quantity of mercury. The small quantity of mercury is the upper limit beyond which the suspension of duty no longer applies; the description thus covers switches containing no mercury.

7. If the term "containing not more than" refers only to the first phrase following it ("three electrical contacts on metal arms"), then of course a small quantity of mercury is required and the description does not cover switches containing no mercury.

8. Let me point out at once that the version in the Gebrauchszolltarif (German customs tariff manual), which states: "switches ... containing a small quantity of mercury" - which would appear to exclude switches containing no mercury - merely provides guidance and is of no assistance to us. (3)

9. It does not seem to me, however, that a grammatical analysis of the relevant phrase in the various language versions of the Community measure in question, however thorough it may be, can of itself supply an answer to the question raised.

10. The Danish, Spanish and Portuguese versions of the description - but only those - have, by inserting a comma after "metal arms", isolated the expression "a small quantity of mercury" and appear to preclude the expression "not more than" from relating to it. On the other hand, that is not the case in the other language versions.

11. However that may be, the problem should in my view be seen from a different angle.

12. The principles pertaining to tariff suspension must be borne in mind. All products imported into the Community from non-member countries are, in the absence of derogations laid down by the Community rules, liable to the duties set out in the Common Customs Tariff. As stated in a Commission communication of 13 September 1989, (4) "the suspensions approved on the basis of Article 28 of the Treaty constitute an exception to the normal state of affairs since, for a given period, they permit non-payment of all (total suspension) or some (partial suspension) of the duties applicable to imported goods".

13. In that communication the Commission defined the role of tariff suspensions as follows: "The Commission considers that customs duties have a particular economic function. Suspensions, which are intended fully or partially to cancel their effects over a given period, may be granted only for specific and valid reasons", in particular those "allowing enterprises to obtain supplies at a lower cost for a certain period". (5)

14. The Commission went on to specify the products in respect of which a tariff suspension might be granted: "Ever since their introduction at Community level, the main purpose of suspensions has been to give Community undertakings access to raw materials, semi-finished goods and components that are not available in any of the Member States". (6)

15. Regulations suspending tariff duties thus provide for exemptions from the principle of the Common Customs Tariff set out in Articles 19 and 20 of the EEC Treaty. Should they not therefore be given a strict interpretation?

16. Just as the "provisions of Community law and, in particular, of Council or Commission regulations which create a right to benefits financed by Community funds must be given a strict interpretation", (7) so, to my mind, must the provisions of a Community regulation which suspends customs duties normally levied by the Member States of the Community and which deprives the Community of resources. (8)

17. In the Ethicon case, (9) the Council and the Commission sought from the Court a strict interpretation of the provisions of a regulation suspending tariff duties. (10) At issue was whether the temporary suspension of the autonomous Common Customs Tariff duties provided for in a regulation for "yarn wholly of polyglycollic acid" which was not produced in the Community could be extended to yarn containing 90% polyglycollic acid and 10% lactid, which qualified for suspension of duties only in subsequent regulations.

18. There, the Court ruled that:

"As is clear from the preambles to the relevant Council regulations, the aim of suspending the autonomous Common Customs Tariff duties pursuant to Article 28 of the EEC Treaty is temporarily to meet the needs of the user industries of the Community. In adopting such provisions the Council must take account not only of those needs but also of the requirements of legal certainty and of the difficulties confronting national customs administrations owing to the wide range and complexity of the tasks which they must carry out.

It follows that the descriptions of goods on which customs duties have been suspended must be interpreted according to objective criteria derived from their wording and that they may not be applied contrary to their wording to other goods even if their properties and application are no different from those covered by the suspension.

...

In accordance with the purpose of the provisions for suspending customs duties and in view of the above-mentioned requirements, which the Council must take into account in customs matters by virtue of Article 28 of the EEC Treaty, the Council must, in order to delimit the suspension of customs duties, select objective and verifiable criteria strictly limiting the scope of the exemption in question to the products for which the user industries of the Community have clearly developed a need which the Council has actually been able to establish. Where necessary, it is for the importer seeking an exemption for certain goods to submit his application to the competent authorities so that the Council may make a decision on the matter." (11)

19. The first recital in the preambles to Regulation No 3696/88 and Regulation No 1656/89 specifically states that "production of the products referred to in this regulation is at present inadequate or non-existent within the Community and producers are thus unable to meet the needs of user industries in the Community". It is noteworthy that neither of those regulations gives any other reason for suspending the tariff duty.

20. It would therefore appear that tariff suspensions can relate only to products that are either unavailable or not available in sufficient quantities in the Community. (12)

21. In that respect one of the Commission' s observations is conclusive. It points out that in the application from a Member State which led to the suspension in question reed switches were described as follows: "One of the contacts in the capsule is made of a material impregnated with mercury. The viscosity of mercury enables electrical backlash, which is a short break in contact when the electrodes come into contact in the magnetic field of an external coil, to be avoided. Switches of that type containing mercury intended to impregnate or moisten the contacts are not to our knowledge manufactured in the Community ... ." (13)

22. It should also be noted that, although since the Single European Act the suspension of duties in the Common Customs Tariff is to be decided by the Council on a proposal from the Commission, (14) upon application by the Member States, it is apparently the practice, according to the explanations given at the hearing by the Commission, to restrict the benefit of tariff suspension to a product which has formed the subject-matter of an application by a State without the Council' s extending it to other products not mentioned in the application for suspension.

23. Examination of the ratio legis shows, therefore, that the description does not cover switches containing no mercury.

24. Finally, the plaintiff in the main proceedings maintains that the description must be interpreted in conformity with Article 130r of the EEC Treaty, which sets out the Community' s objectives with regard to the environment and which lays down in paragraph (2) that "environmental protection requirements shall be a component of the Community' s other policies".

25. The plaintiff concludes from that provision that the Community Regulations No 3696/88 and No 1656/89 could not have treated switches containing mercury (a toxic and ecologically unsound product) more favourably than switches containing no mercury by excluding the latter from the benefit of tariff suspension.

26. That argument calls for the following brief observations.

27. While it is certainly permissible to look to the articles of the Treaty in order to interpret a provision of secondary legislation, that is possible only where that provision gives rise to a difficulty in interpretation and where it leaves a margin of discretion to the interpreter.

28. That, as we have seen, is not the case. The strict interpretation of the provision at issue in Regulations No 3696/88 and No 1656/89 with regard to their ratio legis does not permit the benefit provided for therein to be extended to switches containing no mercury.

29. If that measure, as interpreted, were shown to be contrary to the objective set out in Article 130r(2) of the Treaty, and on the assumption that that provision is not purely in the nature of a programme, then the problem of its validity could arise, but not that of its application to products which do not come within its scope.

30. It follows that none of the arguments based on the wording of the measure, on its ratio legis or on Article 130r of the Treaty supports the contention that the description in question encompasses switches containing no mercury.

31. I therefore propose that the Court rule as follows:

"The description of reed switches set out in CN code ex 8536 5000 in the Annex to Council Regulations (EEC) No 3696/88 of 18 November 1988 and No 1656/89 of 29 May 1989 both temporarily suspending the autonomous Common Customs Tariff duties on certain industrial products (in the microelectronic and related sectors) is to be interpreted as meaning that such reed switches must contain a small quantity of mercury in order to qualify for the suspension in question."

(*) Original language: French.

(1) - Regulation temporarily suspending the autonomous Common Customs Tariff duty on certain industrial products (OJ 1988 L 329, p. 1), extended by Council Regulation (EEC) No 1656/89 of 29 May 1989 temporarily suspending the autonomous Common Customs Tariff duty on certain industrial products (OJ 1989 L 167, p. 1).

(2) - See Table II, CN code ex 8536 5000, in the Annex to Regulation No 3696/88 and the Annex, CN code ex 8536 5000, to Regulation No 1656/89.

(3) - See, on that point, the judgment in Case 161/88 Binder v Hauptzollamt Bad Reichenhall [1989] ECR 2415, at paragraph 19.

(4) - Commission Communication 89/C 235/02 concerning autonomous tariff suspensions (OJ 1985 C 235, p. 2), published while Regulation No 1656/89 was in force.

(5) - Ibid., p. 3, paragraphs 2.4.1 and 2.4.2, emphasis added.

(6) - Ibid., p. 3, paragraph 2.5.1, emphasis added.

(7) - Judgment in Joined Cases 146, 192 and 195/81 BayWa v BALM [1982] ECR 1503, at paragraph 10.

(8) - See Article 201 of the Treaty and Article 2 of Council Decision of 7 May 1985 on the Communities' system of own resources (OJ 1985 L 128, p. 15).

(9) - Judgment in Case 58/85 Ethicon v Hauptzollamt Itzehoe [1986] ECR 1131.

(10) - Ibid., at paragraph 10.

(11) - Paragraphs 12, 13 and 19 of the abovementioned judgment, emphasis added.

(12) - It is worth noting that the lack of availability, or availability in insufficient quantities, on the Community market of switches containing no mercury is not evidenced by any of the documents before the Court.

(13) - P. 7 of the French version of the Commission' s observations, emphasis added.

(14) - Article 28 of the EEC Treaty.