Opinion of Mr Advocate General Elmer delivered on 17 July 1997. - Laboratoires Sarget SA v Fonds d'intervention et de régularisation du marché du sucre (FIRS). - Reference for a preliminary ruling: Tribunal administratif de Paris - France. - Refund for use of sugar in the manufacture of certain chemical products - Anti-asthenia products - Tariff classification. - Case C-270/96.



European Court reports 1998 Page I-01121



Opinion of the Advocate-General

1 Are `Sargenor', `Sarvit', `Lysivit' and `Dynamisan' edible preparations as referred to in Chapter 21 of the Common Customs Tariff or are they `pharmaceutical products' as referred to in Chapter 30 of the Common Customs Tariff?

That is the question on which the Court is asked to rule in this case.

The relevant Community law provisions

2 Chapter 21 of the Common Customs Tariff covers `Miscellaneous edible preparations'.

Heading 2106 covers `Food preparations not elsewhere specified or included'.

Note 1(f) in the introduction to Chapter 21 is worded as follows:

`1. This chapter does not cover:

...

yeast put up as a medicament or other products of heading No 3003 or 3004'.

3 Chapter 30 of the Common Customs Tariff covers `Pharmaceutical products'.

Heading 3004 covers `Medicaments ... consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses or in forms or packings for retail sale'.

The Customs Co-operation Council's Explanatory Notes to Heading 3004 read as follows:

`The provisions of the heading text do not apply to foodstuffs or beverages such as dietetic, diabetic or fortified foods, tonic beverages or mineral waters (natural or artificial), which fall to be classified under their own appropriate headings. This is essentially the case as regards food preparations containing only nutritional substances. The major nutritional substances in food are proteins, carbohydrates and fats. Vitamins and mineral salts also play a part in nutrition.

...

Further this heading excludes food supplements containing vitamins or mineral salts which are put up for the purpose of maintaining health or well-being but have no indication as to use for the prevention or treatment of any disease or ailment. These products which are usually in liquid form but may also be put up in powder or tablet form, are generally classified in heading 21.06 or Chapter 22'.

Note 1(a) in the introduction to Chapter 30 is worded as follows:

`1. This chapter does not cover:

(a) food or beverages (such as dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters) (Section IV)'.

4 Under Council Regulation (EEC) No 1010/86 of 25 March 1986 laying down general rules for the production refund on certain sugar products used in the chemical industry, (1) as amended by Article 9 of Commission Regulation (EEC) No 1714/88 (2) (hereinafter `Regulation No 1010/86'), a production refund is to be granted for sugar used in the manufacture of certain chemical products, inter alia products covered by Chapter 30 of the Common Customs Tariff on `Pharmaceutical products'.

5 Commission Regulation (EC) No 214/96 of 2 February 1996 concerning the classification of certain goods in the combined nomenclature (hereinafter `the classification regulation') (3) provides that the following preparation is to be classified under CN code 2106 90 92:

`Preparation in the form of effervescent tablets put up for retail sale with information on dosage and composition, intended for use as a tonic.

Each 2 gr tablet contains:

- arginine aspartate: 1 gr

- excipients (citric acid, sodium bicarbonate, sodium carbonate, sodium dihydrogen citrate, saccharin sodium, orange yellow (E 110), colloidal silica, flavouring): 1 gr'.

The case before the national court and the question referred for a preliminary ruling

6 Over the period 1987 to 1989 Laboratoires Sarget (hereinafter `Sarget') received FF 2 545 059.66 in production refunds pursuant to Regulation No 1010/86 by declaring `Sargenor', `Sarvit', `Lysivit' and `Dynamisan' as pharmaceutical products.

7 The Fonds d'Intervention et de Régularisation du Marché du Sucre which administers the aid regulation in France does not, meanwhile, accept that they are pharmaceutical products as referred to in Chapter 30 of the Common Customs Tariff but instead classified the products under Chapter 21 (`Miscellaneous Edible Preparations') and demanded repayment of the refunds paid out. Sarget contested that claim before the Tribunal (Administrative Court), Paris.

8 The Court has been informed that Sargenor takes the form of chewable tablets, effervescent tablets and drinkable solutions in ampoules. The composition of active ingredients is the same in all three forms of Sargenor. An effervescent tablet of 1.966 g is made up as follows:

active ingredients - arginine-aspartate 1 g

excipients, preservatives, etc. - anhydrous citric acid - soda - anhydrous sodium carbonate - citric acid sodium - saccharin sodium - orange yellow S - anhydrous colloidal silicon - orange flavouring - sodium 100 mg

9 Dynamisan takes the form of a powder to be diluted in water and drinkable solutions in ampoules. The composition of the active ingredients is the same in both forms of Dynamisan. An ampoule of 10 ml consists of:

active ingredients - arginine-glutamate 3 g

excipients, preservatives, etc. - sorbitol up to 70% non crystallizing - saccharin sodium - methyl parahdroxybenzoate - propyl parahydroxybenzoate - passion fruit flavouring - purified water

10 Lysivit, which takes the form of drinkable solutions in ampoules of 5 to 10 ml, consists of:

5 ml 10 ml active ingredients: - lysin monochlorhydrate 0.2 g 0.4 g - meso-inositol 0.3 g 0.6 g

- vitamin B12 15 ìg 30 ìg

excipients, preservatives, etc. - methyl and propyl parahydroxybenzoate 0.005 g 0.01 g - sucrose - 72% alcoholic solution of lemon essence - purified water

11 Sarvit, which has not been marketed since 1987, took the form of drinkable solutions in ampoules of 5 or 10 ml. Sarvit consisted of:

active ingredients: - calcium 0.9 g - vitamin B12 500 ìg

excipients, preservatives, etc. - methyl parahydroxybenzoate - propyl parahydroxybenzoate - sucrose - erythrosin - mandarin essence - ethyl alcohol - hydrochloric acid - drinking water

12 The Tribunal Administratif, Paris stayed the proceedings and referred a question to the Court of Justice for a preliminary ruling, stating as follows:

`Determination of the proceedings depends on the following question: In view of their composition, presentation and functions, do the products "Sargenor", "Sarvit", "Lysivit" and "Dynamisan" fall within the scope of Council Regulation No 1010/86 of 25 March 1986 on the classification of goods under sub-heading 30 of the Common Customs Tariff or another sub-heading?'

Procedure before the Court

13 Sarget and the French Government claim that Sargenor, Dynamisan, Lysivit and Sarvit fall under heading 3004 in the Common Customs Tariff.

Sargenor, which contains arginine aspartate, has a therapeutic and prophylactic effect against asthenia, which is an illness requiring medical treatment. Sargenor has a specific therapeutic and prophylactic effect on certain functions of the human organism and contains arginine aspartate in a quantity such that it can only be used for therapeutic or prophylactic purposes. The same applies to Dynamisan, which has the same composition and effect as Sargenor, inasmuch as it contains arginine glutamate, which has the same therapeutic effects as arginine aspartate. Arginine aspartate is not without toxicological risk. Medical advice is required if a child under 12 years ingests it.

The daily dosage of Lysivit recommended by Sarget for children is an average of 2 ampoules of 5 ml, corresponding to 30 ìg vitamin B12, and for adults an average of 2 ampoules of 10 ml, corresponding to 60 ìg vitamin B12, but that latter dosage may be doubled. The recommended dosage of Lysivit for children and adults thus contains much more than the daily vitamin B12 allowance of 1 ìg recommended in Council Directive 90/496/EEC on nutrition labelling for foodstuffs (OJ 1990 L 276, p. 40). Sarvit, which has not been marketed since 1987, contained 500 ìg vitamin B12, which is far above the daily allowance recommended in the above directive. Its vitamin B12 content was so high that Sarvit could be used only for therapeutic or prophylactic purposes. The French Government has stated in particular that Lysivit and Sarvit are used in the treatment of functional asthenia, which is an illness. A lack of vitamin B12 can result in difficulties in the functioning of the nervous system, problems with heart muscle and respiratory problems, as well as pernicious anaemia. Sarget has stated in particular that the classification of Sargenor under heading 2106 in Regulation No 214/96 does not have retroactive effect. Sargenor is registered as a medicament in France and eight European countries, as well as in approximately 40 other countries.

14 The Commission has stated that Sargenor, Dynamisan, Sarvit and Lysivit all fall under heading 2202 of the Common Customs Tariff. The Commission refers to the fact that Sargenor and Dynamisan principally consist of amino acids, sugar and preservatives, Sarvit principally consists of calcium, vitamin B12, preservatives and sugar, and Lysivit principally consists of amino acids, vitamin B12 and preservatives. Asthenia should be regarded as a weakness in the general condition that follows almost every illness. Sargenor, Dynamisan, Sarvit and Lysivit have neither a therapeutic nor prophylactic effect on a particular illness and therefore fall under heading 3004.

General remarks

15 I would point out that Regulation No 1010/86 provides the legal basis for granting production refunds for sugar used in the manufacture of the products listed in the annex to the regulation. The annex refers to `Chapter 30 - Pharmaceutical products' of the Customs Tariff, but not `Chapter 21 - Miscellaneous edible preparations'. If the products properly fall under Chapter 21, they are therefore not covered by the regulation. It is only if the products fall under Chapter 30 that they are covered, and only in that case is there a basis for granting a production refund. The case before the national court therefore turns on whether the products fall under Chapter 30 of the Common Customs Tariff and the question referred to the Court must therefore be understood as a request to interpret that chapter.

16 Under the Court's settled case-law, in the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of the Common Customs Tariff and of the notes to the sections or chapters. Likewise, for the purpose of interpreting the Common Customs Tariff, the Court has consistently held that both the notes which head the chapters of the Common Customs Tariff and the Explanatory Notes to the Nomenclature of the Customs Cooperation Council are important means for ensuring the uniform application of the Tariff and as such may be regarded as useful aids to its interpretation (see Case C-459/93 Thyssen Haniel Logistic (4) and Joined Cases C-106/94 and C-139/94 Colin and Dupré (5)).

17 The question must therefore be examined whether the products involved in this case have the characteristics and specific properties referred to in heading 3004.

18 The decisive criterion for the classification of a given product as a medicament under the Common Customs Tariff must be considered as being whether it has a specific therapeutic or prophylactic use. That is stated in the text to heading 3004 of the Common Customs Tariff and in the explanatory notes thereto. In accordance with the above, in Case C-177/91 Bioforce I (6) the Court held that `hawthorn drops' must be classified under heading 3004, since that product has clearly defined therapeutic and, above all, prophylactic characteristics, the effect of which is concentrated on precise functions of the human organism, namely the cardiac, circulatory and neuro-vegetative functions. Furthermore, in Case C-405/95 Bioforce II (7) the Court held that Echinacea purpurea extract-based drops must be classified under heading 3004, since that product has a clearly defined therapeutic or prophylactic purpose with an effect concentrated on the functions of the human body's immune system.

19 On the question of the significance of the concentration of certain ingredients for the question whether vitamin preparations should be classified under the heading of medicinal products within the meaning of Council Directive 65/65/EEC, in Case 227/82 Van Bennekom (8) the Court stated as follows:

`Inasmuch as vitamins are usually defined as substances which, in minute quantities, form an essential part of the daily diet and are indispensable for the proper functioning of the body, they may not, as a general rule, be regarded as medicinal products when they are consumed in small quantities. (paragraph 26)

Similarly, it is a fact that vitamin or multi-vitamin preparations are sometimes used, generally in large doses, for therapeutic purposes in combating certain diseases other than those of which the morbid cause is a vitamin deficiency. In such cases, it is beyond dispute that the vitamin preparations constitute medicinal products. (paragraph 27)

It is, however, apparent from the file and from the observations submitted to the Court, taken as a whole, that it is impossible in the present state of scientific knowledge to state whether the criterion of concentration alone is always sufficient in order to be able to determine whether a vitamin preparation constitutes a medicinal product; still less therefore is it possible to specify the level of concentration above which such a vitamin preparation would fall within the Community definition of a medicinal product.' (paragraph 28) (9)

20 In relation to the Customs Tariff what cannot be a deciding factor is how a given product stands in relation to the Community or the individual Member States' legislation on medicaments. That also follows from the general observations relating to Chapter 30 of the Common Customs Tariff, where it is stated:

`The description of a product as a medicament in Community legislation ... or in the national legislation of the Member States, or in any pharmacopoeia is not the deciding factor in so far as its classification in this chapter is concerned.'

The definition of medicament in the Customs Tariff differs from that of medicinal product laid down in Council Directive 65/65/EEC of 26 January 1965 on the approximation of provisions laid down by law, regulation or administrative action relating to proprietary medicinal products. (10) That directive is designed to eliminate - at least in part - obstacles to trade in proprietary medicinal products within the Community whilst at the same time attaining the essential objective of safeguarding public health. (11) Thus, in order to promote trade and at the same time protect public health, the directive allows a relatively broad selection of products to be covered by the supervisory system laid down in the medicinal products legislation. In the light of the objective of consumer protection, the Court has therefore given a broad interpretation to the directive's first definition of a medicinal product which takes the presentation of the product as its basis. (12)

The fact that a product is marketed with authorisation from the national authorities and is thus regarded as a medicament in the national legislation does not therefore per se imply that the product should also be classified as a medicament under the Customs Tariff. According to Case C-405/95 Bioforce II, it does, however, constitute evidence that it possesses the objective characteristics and properties defined in heading 3004.

Sargenor and Dynamisan

21 The classification regulation provides that preparations in the form of effervescent tablets put up for retail sale with information on dosage and composition consisting of 1 gr arginine aspartate and 1 gr excipients should be classified under CN code 2106 90 92. That description is precisely that of Sargenor. However, the case before the national court concerns a demand for repayment of production refunds for sugar used in the manufacture of Sargenor before the classification regulation was adopted and entered into force. The case before the national court cannot therefore be resolved by applying the classification regulation. Instead Sargenor must be classified in application of the general rules. (13)

22 Sarget has produced a report on Sargenor drawn up by Professor P. Galley, of the Centre Régional de Gériatrie, Centre Hospitalier Universitaire, Bordeaux. It is stated in p. 5 of that report that Sargenor has been marketed in France since 1965 as a treatment for functional asthenia in the form of a course of 3 x 5 ml ampoules per day for 15 to 30 days. On p. 30 it is stated that the dosage is 2 to 3 ampoules per day for adults and 1/2 to 2 ampoules per day for children, according to age. It is further stated in the report that asthenia must be regarded as a state of ill health which cannot be improved by rest, in contrast with fatigue, which is a temporary physiological state.

23 In my view it is not the Court's task to decide whether asthenia is an illness which differs from general fatigue. A finding on that question would, moreover, not provide an answer to the question of how Sargenor should be classified. Even were it to be accepted that asthenia is an illness, it would still be of decisive importance for classification purposes whether Sargenor has a clearly defined therapeutic or prophylactic effect on such a state.

24 According to the report, the evidence consists in a number of investigations of the effects of arginine aspartate on inter alios sportsmen and women which are supposed to have shown that in certain specific dosages, often 3 g per day, taken over periods of specified length, arginine aspartate has an effect on physical and mental fatigue and sleeping difficulties, concentration problems and lack of enthusiasm for leisure activities, which are themselves described as symptoms of asthenia.

25 As stated, these were investigations relating to arginine aspartate and not to Sargenor or Dynamisan. The only active ingredient in Sargenor is, however, 1 g of arginine aspartate in each ampoule of 5 ml. The only active ingredient in Dynamisan is 3 g of arginine glutamate in each ampoule of 10 ml which, according to Sarget, has the same therapeutic effects as arginine aspartate.

26 Asthenia manifests itself in many different, more or less diffuse, symptoms, and the said investigations of arginine aspartate also suggest that Sargenor and Dynamisan could be considered, according to their dosage, to have an effect on a number of different functions in the human organism. In my view, precisely on that ground, Sargenor and Dynamisan cannot be regarded as having such a clearly defined therapeutic or prophylactic effect as is required for classification under Chapter 30 of the Common Customs Tariff.

Lysivit and Sarvit

27 It has been explained to the Court that the dosage of Lysivit recommended for children by Sarget is on average 2 ampoules of 5 ml, corresponding to 30 ìg vitamin B12, and for adults an average of 2 ampoules of 10 ml, corresponding to 60 ìg vitamin B12, but the latter dosage can go up to double that amount. In comparison, the daily supplement of vitamin B12 recommended in the `Reports of the Scientific Committee for Food (31st Series): Nutrients and energy intakes for the European Community' (14) is 1 ìg. The vitamin B12 content of Lysivit thus considerably exceeds the recommended daily intake. That is true to an even greater degree in the case of Sarvit, which contains 500 ìg per ampoule.

28 It was stated during the proceedings that a lack of vitamin B12 can be linked to pernicious anaemia, which is an illness characterised by the fact that the organism cannot absorb vitamin B12. According to the evidence, neither Sarvit nor Lysivit are marketed, however, as a treatment for pernicious anaemia. Furthermore, administration of vitamin B12 in cases of pernicious anaemia takes place mainly by intramuscular injection. Moreover, there is no evidence to show how the other active ingredients in Lysivit or Sarvit can contribute to the treatment of pernicious anaemia.

29 According to the evidence, Lysivit and Sarvit are marketed as a treatment for functional asthenia. However, as stated above, asthenia manifests itself in many different, more or less diffuse, symptoms, and both products can therefore, as stated in point 26, be regarded as having an effect on a number of different functions in the human organism.

30 To summarise, Lysivit and Sarvit cannot therefore be said to have such a clearly defined therapeutic or prophylactic effect as is required for classification under heading 3004.

Conclusion

31 In view of the foregoing I would propose that the Court rule on the question referred to it as follows:

The Common Customs Tariff should be interpreted to the effect that `Pharmaceutical products' in Chapter 30 does not cover products with the composition of Sargenor, Dynamisan, Lysivit and Sarvit.

(1) - OJ 1996 L 94, p. 9.

(2) - OJ 1988 L 152, p. 23.

(3) - OJ 1996 L 28, p. 7.

(4) - [1995] ECR I-1381.

(5) - [1995] ECR I-4759.

(6) - [1993] ECR I-45, in particular paragraphs 12 and 13.

(7) - [1997] ECR I-2581.

(8) - [1983] ECR 3883.

(9) - The case concerned medicinal products for the purposes of Directive 65/65/EEC.

(10) - OJ, English Special Edition 1965-1966, p. 20.

(11) - See Case 227/82 Van Bennekom, cited in footnote 8, at paragraph 14.

(12) - See Case 227/82 Van Bennekom, cited in footnote 8, paragraph 17, and Case C-112/89 Upjohn [1991] ECR I-1703, paragraph 16, and Case C-219/91 Ter Voort [1992] ECR I-5485, paragraph 16.

(13) - According to the classification regulation, that classification has been made precisely in application of the general rules. Thus the classification regulation states that classification is determined by General Rules 1 and 6 for the interpretation of the combined nomenclature, Note 1(a) to Chapter 30 and the wording of CN codes 2106, 2106 90 and 2106 90 92.

(14) - (Opinion given on 11.12.1992.)