OPINION OF MR ADVOCATE-GENERAL TRABUCCHI

DELIVERED ON 8 NOVEMBER 1973 ( 1 )

Mr President,

Members of the Court,

The question referred by the Finanzgericht of Baden-Württemberg in the present case concerns the distinction between tariff heading 41.03 B I and heading 41.03 B II of the Common Customs Tariff; both refer to sheep and lamb skin leather but, while the first refers to skins ‘Not further prepared than tanned’, the second refers to ‘Other’ skins.

In opposition to the view taken by the customs office concerned, the plaintiff in the main action maintains that the skins which, in 1971, it imported from Spain into the Federal Republic of Germany, are skins ‘Not further prepared than tanned’ within the meaning of tariff heading 41.03 B I. The rate of customs duty applicable in that case is markedly lower than for the other skins covered by the second part of the heading.

The problem has arisen because fat was added in tanning to the skins in question. In this connection, the customs office involved quotes the opinion given by the Customs Tariff Committee of the Commission of the Communities at its 67th meeting, held in September 1972, according to which skins tanned with fat added can no longer be regarded as ‘Not further prepared than tanned’, this position arising as soon as fat has been added.

The German importer, on the other hand, takes his stand on the Explanatory Notes to the Brussels Nomenclature concerning bovine cattle leather under tariff heading 41.02 which, as stated in the same notes on tariff heading 41.03, have undergone the same processes as skins of the type under consideration in the present case. These notes refer to the addition of fat after tanning, as part of the subsequent treatment necessary to make the hide or skin suitable for use. From this he argues that the addition of fat creates an ‘other’ product only when it takes place in the final stage of preparation and not during the tanning process itself.

The German customs authority points out that there are serious practical difficulties in establishing whether foreign substances were added during or after tanning. According to the importer, however, this would be a very simple matter, at least as regards sheep and lamb skins tanned by a chrome-based process, as in the case of the products under consideration. The Commission is inclined to get over the difficulty by pointing out that the time when fat is added to the skin is not the decisive factor in its classification. On the contrary, what is decisive for classification of products under the first part of the tariff subheading is the fact that the addition formed an integral part of the tanning process.

The distinction drawn in the tariff between skins not further prepared than tanned and other skins, and the explanations, to which reference has already been made, on the subject of a similar product given in the notes to the Brussels Nomenclature, have the effect of putting into the residual category contained under heading 41.03 B II all skins which, in addition to tanning, have undergone other processes designed to prepare them for immediate use. This leads one to the conclusion that the decisive factor which places a product in one or other of these two categories is the meaning of tanning. In this respect, the meaning suggested by the Commission is based on function as the criterion. The Commission maintains that the object of tanning is to preserve the skin, leaving its natural qualities unchanged pending conversion into leather, in other words, into material which cannot putrefy.

This view, which seems perfectly reasonable to me, can be reinforced with another standard of comparison which, apart from the explanations to the Brussels Nomenclature, emerges from the wording of tariff heading 41.03 itself. This, in section A, includes ‘Indian cross-bred sheep and goats, not further prepared than vegetable tanned, whether or not having undergone further preservative treatment with oil, but obviously unsuitable for immediate use in the manufacture of leather articles’.

From this provision one may conclude that, even in the case of the ‘other’ skins referred to in letter B, the principle, based on analogy between the products, must hold good that the only skins which can be regarded as ‘not further prepared than tanned’ are those which, in that state, are not suitable for immediate use in the manufacture of leather articles but, on the contrary, must, in order to be so used, undergo further treatment after tanning.

On the basis of this evidence, some of it drawn from the relevant provisions, and in the light of case law of this Court laying down, in the interests of legal certainty and good administration, that the decisive factor in the classification of goods for customs purposes is, as a general rule, to be found in the objective characteristics and properties of the products (Judgment in Case 36/71 of 23 March 1972, Henck, Rec. 1972, p. 189), I believe that, in deciding whether a product to which fat has been added in tanning should be placed in the first or second of the two categories into which tariff heading 41.03 B has been sub-divided, the national authorities should concentrate their attention on the question whether, in its nature, such addition is necessary or otherwise, not for rendering the skin suitable for immediate use in the manufacture of leather articles, but simply for preservation of its natural qualities. Once established as necessary, the addition represents a process which, in view of the essential function performed by tanning, must be regarded as an integral part of it.

Accordingly, if it were true that, as the Commission maintains, the water-resistant properties of the salt used to chrome-tan a skin expose its fibres to the danger of destruction or serious deterioration if the skin is dried without prior addition of certain fats, one could only conclude that these fats are an integral part of the tanning and that their addition does not therefore prevent classification of the product in the first category under tariff heading 41.03 B. But this is a matter of fact on which it is the responsibility of the national court to rule in the light of the guidelines supplied by this Court.

I am fully aware that the guidelines laid down above may, when they come to be applied, still leave the national court with certain twilight areas. It will perhaps not always be easy to establish in fact whether the addition of fat has formed an integral part of tanning, or whether it is part of a subsequent process. But this is a decision outside the jurisdiction of this Court of Justice. If doubts arise, however, the national court may find it helpful to refer to the test contained in the Explanatory Notes of the Commission on the Common Customs Tariff at the point where a reference is made to tariff heading 41.03 B in these terms: ‘Skins and leather not further prepared than tanned are mainly recognizable by the fairly large number of fibres of subcutaneous origin on their inner surface, particularly at the edges. Because of this the inner surface is fibrous and rough’.

For these reasons I propose that a reply be sent to the German court on the basis of the considerations set out above.

( 1 ) Translated from the Italian.