6.

We shall now consider the technical factors which occur in the present case. According to the statements made by the Netherlands court in the order for reference, the production of the slide fasteners, as carried out at the Netherlands Yoshida subsidiary (and the same probably applies in the case of its German sister company), consists of the following main operations: (a) the weaving of the tapes from yarn and where necessary the trimming of the tapes with thread, followed by the dyeing of the tapes; (b) the forming of the metal scoops or the production of the spirals from nylon thread; (c) the attaching of the metal scoops or of the nylon spirals to the tapes and the subsequent joining of the tapes; (d) the attaching of bottom stops and top stops to the tapes; (e) the insertion and where necessary the colouring of the sliders; (f) the drying and cleaning of the continuous slide fasteners which are finally cut to size. It is evident that the list of such operations is completed by adding thereto the manufacture of the sliders (which in the present case takes place, as we know, in Japan) and the manufacture of the end pieces. According to the Commission, three operations are relevant for the purpose of determining the origin of the product; the forming of the scoops, the attaching of those scoops to the tapes and the manufacture of the slider. The Commission refuses to accept that the manufacture and attaching of the end pieces and the finishing operations (for example dyeing, drying and cutting) come within the concept of last substantial process or operation within the meaning of Article 5 of Regulation No 802/68. Similarly, the Commission refuses to acknowledge that assembly may by itself correspond to this concept, taking the view that a relatively simple operation, although naturally indispensable in order to obtain the finished product, does not have the character of a ‘substantial’ operation from the technical point of view. It therefore considered that it was necessary to go back to the manufacturing process to find the last important stage and identified that stage as being the one in which either the stops or the slider is manufactured. Neither of these two operations considered per se is in the nature of a ‘substantial process or operation’ since both are necessary to give the product its characteristic features. On the other hand, neither of these two operations necessarily precedes the other chronologically. Even if they are considered in conjunction, the two parallel and distinct operations are not however such as to constitute a new product until the slider has been fitted onto the scoops which have already been affixed to the tapes. The Commission decided on the basis of that reasoning to take into account for the purposes of determining the origin of the product the two above-mentioned manufacturing operations in conjunction with the attaching of the scoops and the slider and to consider those operations as a whole as corresponding to the concept of ‘last substantial process’ within the meaning of Article 5. The German Yoshida undertaking maintained however that the two tapes linked by scoops constituted, the main part of the slide fastener and referred in this respect to the German provision which defines the above-mentioned product as ‘a connecting element which may be repeatedly separated’. It is however clear that the repeated separations are made possible by the existence of the slider. It is therefore impossible to share the view that the two tapes with scoops attached represent the predominant components unless the economic point of view is used as the starting-point, since the value of the tapes with the scoops attached is higher than that of the slider. I have already said at the outset that the system of Regulation No 802/68 clearly gives the technical criterion priority over the economic criterion. More generally, I would observe that if the intention were in the present case to attach importance to the economic consideration of the low cost of the slider in relation to that of the finished product this would by implication exclude the need to refer to the last substantial process or operation in all cases in which such an operation represented a small percentage of the cost of a product. An attitude of this kind would however be blatantly contrary to Article 5 of Regulation No 802/68. I therefore repeat that it does not seem to me to be justified to consider that the two tapes to which the scoops (or spirals) are affixed are the components which should serve to determine the origin of the finished product. Still less can it be the final inspection process intended to ensure the normal functioning of the fastener, as the abovementioned undertaking seems to suggest, somewhat contradictorily, since however high its cost may be that process is obviously incapable of adding anything substantial to the product as regards its manufacture but merely has the commercial function of preventing defective products from being put on the market. Finally, I consider that — if we remain on the actual technical level of the Community provisions — in applying Article 5 of Regulation No 802/68 to the product at issue a person interpreting the regulation is faced with these inevitable alternatives: either one acknowledges that the last substantial process or operation is assembly (in other words the assembly of the scoops and the slider onto the tapes) or one goes back to the manufacturing operations which precede assembly and which relate to both the characteristic components of a slide fastener, that is, the scoops and the slider. In my opinion the Commission was correct not to adopt assembly considered in isolation; it is sufficient to take the view that if the Commission had regarded assembly as determining for the purposes of the origin of the product it would have opened the way to the grant of Community classification for all products merely assembled in the Community even if they were made up of parts all manufactured elsewhere. This observation may be important of course from the point of view of the system upon which Regulation No 802/68 is based, above all Article 5 thereof which in my opinion uses the concepts of ‘production’ and ‘manufacture’ in a sense which cannot generally be reduced to the assembly operation. However, that apart it seems to me that the Commission's point of view (based on a visit to a factory which produces slide fasteners) is convincing; it states that a technically straightforward assembly operation cannot be called ‘substantial’. If this is true, the first of the two abovementioned solutions must be ruled out and the second solution must be accepted as correct, in other words that adopted by Regulation No 2067/77. The general observations which I have set out above concerning the validity of the reference to several interconnected operations for the purpose of designating the last substantial process or operation lead me to consider that the solution adopted in the above-mentioned regulation is compatible with Article 5 of Regulation No 802/68 of the Council from this point of view too. Moreover, if the Commission had wished to consider a single operation as substantial, maintaining however its argument that assembly is not substantial in nature, how could it have made a choice between the manufacture of the scoops and the manufacture of the slider in view of the fact that the utility of each of these operations is subject to the performance of the other operation? It would be possible to object that the woven tapes to which the scoops must be affixed, the metal tapes from which the latter are made and the end pieces are also components essential for the existence of a slide fastener; however, the manufacture of the woven tapes and of the metal tapes is at an opening stage in the production process — and therefore in a stage prior to that in which the scoops are manufactured and attached — whereas the manufacture of the end pieces seems to be an operation of a secondary nature. Therefore, in spite of the arguments which have been put forward during these proceedings by the two Yoshida subsidiaries and by the Netherlands and German Governments against the validity of Commission Regulation No 2067/77, I do not consider that the Commission exceeded the limits laid down in Article 5 of Regulation No 802/68 of the Council by considering that the manufacture of the sliders was an integral part of the last substantial process or operation in the process of the manufacture of slide fasteners.