CELEX: 61979CC0054
Language: en
Date: 1980-01-15
Title: Opinion of Mr Advocate General Mayras delivered on 15 January 1980. # Firma Hako-Schuh Dietrich Bahner v Hauptzollamt de Frankfurt am Main-Ost. # Reference for a preliminary ruling: Hessisches Finanzgericht - Germany. # Tariff classification - Footwear. # Case 54/79.

OPINION OF MR ADVOCATE GENERAL MAYRAS
      DELIVERED ON 15 JANUARY 1980 (
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         Mr President,
      
      
         Members of the Court,
      
      The development of tourism in Spain has sometimes some strange consequences: the case in which I am giving an opinion today is an illustration, for it concerns the classification under the Common Customs Tariff of ladies' Basque espadrilles which the inhabitants of countries with a cold and damp climate have learnt to appreciate.
      Apart from this anecdotal aspect, this case has also an economic significance which the Italian and French Governments have clearly shown. They have submitted that the decision which the Court gives will not be without influence upon the Community manufacturers of footwear of the same kind who face keen competition from their Spanish counterparts. In this competition the importers of Spanish espadrilles are allegedly trying to make improper use of the various headings of the Common Customs Tariff on footwear and this is leading to distortion in trade. This affects Community manufacturers of rope-soled espadrilles and those of rubber-soled footwear.
      From the legal point of view, finally, this case will enable the Court once again to check whether certain Explanatory Notes to the Common Customs Tariff do not conflict with the provisions of the tariff itself, as the national court has asked.
      I —
      Footwear is included under four headings of Chapter 64 of the Common Customs Tariff. Heading 64.01 covers footwear with outer soles and uppers of rubber or artificial plastic material. Heading 64.02 covers footwear with outer soles of leather and footwear (other than footwear falling within heading 64.01) with outer soles of rubber or artificial plastic material; it has two subheadings: subheading A covering footwear with uppers of leather and subheading B covering other footwear. Heading 64.03 covers footwear with outer soles of wood or cork. Heading 64.04, finally, covers footwear with outer soles of other materials including rope.
      On 2 February 1978 Firma Hako-Schuh Dietrich Bahner of Augsburg (Federal Republic of Germany) imported from Spain a consignment of footwear consisting of fabric uppers and soles of hempen rope covered at the heel, toes and joint “Ballen” with rubber. The rubber covers 57% of the sole. At the customs the importer declared the shoes as footwear with outer soles of rope coming under heading 64.04 of the Common Customs Tariff. Footwear coming under this heading imported from Spain is liable to duty of 2.8%.
      The competent customs office at first accepted that declaration. Then in view of a binding customs tariff notification issued by the Oberfinanzdirektion [Regional Finance Office] Frankfurt am Main it amended the customs classification of the footwear and assigned it to subheading 64.02 B and levied the duty of 12% applicable to imports from Spain classified in that subheading.
      The importer lodged an objection against the duty before the Hauptzollamt [Principal Customs Office] Frankfurt am Main. When the objection was rejected the importer brought an action before the Hessisches Finanzgericht. In order to resolve the dispute the Hessisches Finanzgericht considers it necessary to have heading 64.02 interpreted by this Court. The Hessisches Finanzgericht asks whether footwear with outer soles of hemp, approximately half the area of which is provided with a rubber reinforcement, can be classified as footwear with outer soles of rubber under that heading.
      Before the Hessisches Finanzgericht the importer has obviously maintained that the goods could not be so classified. In its view the footwear in question is typically Basque, the traditional style of which, designed for warm countries, includes a sole made entirely of rope.
      When as a result of the tourist trade people from northern countries became interested in this type of footwear, the manufacturer adapted the sole in order to make it more resistant and in particular to provide it with better protection against water. It added, in fact, a layer of rubber to the most vulnerable parts of the hempen sole.
      In the view of the plaintiff in the main action this reinforcement does not constitute the essential material of the sole which remains rope of plaited hemp and in no way changes the characteristics of the footwear which remains the traditional Basque footwear. The only appropriate tariff heading therefore is heading 64.04.
      In the view of the Hauptzollamt, on the other hand, the imported sandals were rightly classified under subheading 64.02 B. It states that the structure of Chapter 64 of the Common Customs Tariff, in particular the wording of headings 64.01 to 64.04, indicates that footwear is to be classified according to the material from which in particular the outer soles are made. Since the outer soles of the imported sandals are composed of two materials (plaited hempen rope and rubber) it would be possible to classify the footwear under two headings, 64.02 or 64.04.
      Where goods are classifiable under several tariff headings, Rule A 3 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff provides that the classification must be made according to the material which gives the goods their essential character. In the case at issue it is the rubber coating which, in the view of the Hauptzollamt, gives the soles their essential character since it covers more than half their surface and further it fundamentally alters the characteristics of the footwear in use (preventing slipping and improving durability).
      This view is further confirmed by the Explanatory Notes to the Customs Tariff relating to heading 64.02. The espadrilles in question must therefore be classified under the latter heading.
      The Hessisches Finanzgericht has certain reservations regarding the reference to the Explanatory Notes to determine the classification of the footwear in question. The national court recognizes that the criterion for defining tariff headings 64.02 and 64.04 is the nature of the outer sole. It observes however that the customs tariff itself refers only to soles made of one material. The case of composite soles made of rope and rubber is referred to only by the Explanatory Notes which have selected as the determining factor the amount and in particular the position under the rope sole of the rubber reinforcement. The origin of this distinction is to be found in an opinion of the Committee on Common Customs Tariff Nomenclature which has been incorporated into the Explanatory Notes.
      The national court asks whether by adding a criterion which is not in the tariff the Explanatory Notes are not amending the tariff and must accordingly be disregarded.
      This Court has held that the Explanatory Notes to the Common Customs Tariff, although an important factor as regards interpretation in all cases where the provisions of the tariff give rise to uncertainty, cannot amend those provisions, the meaning and scope of which are sufficiently clear (judgment of 12 December 1973 in Case 149/73 Witt v Hauptzollamt Hamburg-Ericus [1973] ECR 1587, and in particular paragraph 3 of the decision at p. 1593; judgment of 8 May 1974 in Case 183/73 Osram v Oberfinanzdirektion Frankfurt [1974] ECR 477 and in particular paragraph 12 of the decision at p. 486). The judgment of 15 February 1977 in Joined Cases 69 and 70/76 (Dittmeyer v Hauptzolhmt Hamburg-Waltershof [1977] ECR 231 and in particular paragraph 4 of the decision at p. 238) is to the same effect as regards opinions of the Committee on Common Customs Tariff Nomenclature.
      On the other hand the Explanatory Notes adopted on the basis of the opinion of the Committee cannot be equated with informal measures of the Commission taken at a time when the Committee did not yet exist, as referred to in the judgment of 18 June 1970 in Case 74/69 {Hauptzollamt Bremen v Krohn [1970] ECR 451) cited by the national court. As the Court knows, the Committee on Nomenclature was established by Regulation No 97/69 of the Council of 16 January 1969 (Official Journal, English Special Edition, 1969 [I] p. 12) to specify the content of the headings and subheadings of the Common Customs Tariff without, however, amending the next thereof so that it might be uniformly applied in all Member States. Without having the binding nature which the tariff itself has because it is a regulation, the Explanatory Notes are of an official nature in contrast to informal measures.
      II —
      Let us see however whether the fears of the German court are well founded.
      As the Hauptzollamt has pointed out and the Finanzgericht agrees, the nature of the outer sole is the only criterion laid down by the Common Customs Tariff for distinguishing headings 64.02 and 64.04. Contrary to what the plaintiff in the main action seems to think, it is the sole alone and not the footwear as a whole which must be taken into account. The distinction between the different kinds of footwear according to their soles has been taken by the Common Customs Tariff from the Convention on Nomenclature for the Classification of Goods in Customs Tariffs (Brussels, 15 December 1950) to which Spain is a party. It is not therefore an ad hoc criterion invented by the Community authorities to afford protection against Spanish espadrilles.
      
         A fortiori it is clear that in questions of classification for purposes of the customs tariff the concept of fashion and in particular the connexion between the fashion in footwear and fashion in clothing does not apply at all. This accords with the consistent case-law to the effect that in the interests of legal certainty and the simplification of administrative procedures, it is the characteristics and objective properties of products which, as a general rule, afford the decisive criterion for their classification in the Common Customs Tariff (for example Case 185/73 Hauptzollamt Bielefeld v König [1974] ECR 607 and in particular paragraph 18 of the decision at p. 619). For a very full list of the judgments to this effect I refer to the opinion of Mr Advocate General Warner in Case 11/79 (judgment of 4 October 1979, Cleton v Inspecteur der Invoerrechten en Accijnzen, Rotterdam, [1979] ECR 3069).
      The question becomes more complicated in the case of composite soles. Where the soles are of hempen rope partly covered by rubber which of these materials predominates for the purpose of tariff classification?
      If it is the hempen rope the footwear will be footwear with outer soles of other materials within the meaning of heading 64.04. If it is the rubber it will be footwear with outer soles of rubber within the meaning of subheading 64.02 B.
      We know that Rule A3 (b) of the General Rules for the Interpretation of the Nomenclature of the Common Customs Tariff gives an abstract answer to this question by stating that the decisive factor is the material which gives goods their essential character.
      However in the particular instance is it the rope or the rubber of the soles of the espadrilles which gives the footwear its essential character?
      In this respect we have, as already referred to, the information in the opinion given in 1976 by the Committee on Nomenclature specifically as a result of a request by the Spanish Mission to the Communities. The Committee stated, in what was to become a note to heading 64.04, that this heading covers footwear of the espadrille type having outer soles of rope covered at the toe and the heel or the toe, the heel and the middle part with rubber or artificial plastic material.
      On the other hand the footwear of the same type having outer soles covered at the toe, the heel, the middle part and all round the edge, or at the heel and most of the forepart of the sole, with rubber or artificial plastic material is to be classified under subheading 64.02 B, according to the declaration of the Committee that was to become a note to this heading.
      As you are aware, this distinction is very precise and rests upon two criteria relating only to the soles: a quantitative criterion and in particular a qualitative criterion. Perusal of the notes shows that once there is a certain proportion of rubber on the sole it is the rubber which becomes the essential material. More important than the extent covered by this material, however, are the parts to which it is affixed. The notes have been worded in such a way that the rubber gives the sole its character when it covers all the parts necessarily in contact with the ground. In this case the rubber part in fact acts as the “outer sole” as the Italian Government has observed.
      Moreover the affixing of rubber to those parts alters the quality of the footwear. If the parts of the sole most subject to wear are covered with more durable material such as rubber, the strength and durability of the footwear no longer have anything in common with that of espadrilles which have a sole made only of rope. In the same way the water-resistant nature of the rubber makes it possible to use them on damp and slippery ground.
      Espadrilles with a composite sole, classified by the Explanatory Notes under heading 64.02, satisfy conditions of wear which make them a product which is different from the traditional espadrilles, which have a sole made only of rope but similar to those which have soles made entirely of rubber.
      The classification made by the Explanatory Notes therefore appears quite logical and in accord with the best way of defining a product for purposes of customs clarification since it is based on intrinsic qualities determined by the actual conditions of use for which it is intended, to adopt the words used by the French Government. Moreover this clearly accords with what, according to the case-law of the Court, is in general the decisive criterion for classifying goods in the Common Customs Tariff, namely the objective characteristics and properties of products.
      Moreover this classification only develops and particularizes the sole criterion adopted by the tariff for distinguishing between footwear under heading 64.04 and that under heading 64.02 : the nature of the outer sole.
      The Court has held that in order to adopt measures to implement the aforementioned Regulation No 97/69 “the Council has conferred on the Commission, acting in cooperation with the customs experts of the Member States, a wide discretion as to the choice between two or more tariff headings in which a given product might be classified” (judgment of 28 March 1979, Case 158/78 Biegi v Hauptzollamt Bochum [1979] ECR 1103, paragraph 6 of the decision at p. 1117). If this is so as regards a measure which is binding it seems to me all the more justified with regard to mere opinions such as the Explanatory Notes.
      This is why I think it is possible to disregard the reservations to which the Finanzgericht has referred in its order making the reference concerning whether the Explanatory Notes accord with the tariff.
      I therefore propose that the Court should answer the question put by ruling that footwear of the espadrille type having outer soles covered at the toe, the heel and most of the forepart of the sole with rubber is footwear with outer soles of rubber withing the meaning of subheading 64.02 B of the Common Customs Tariff.
      Of course it is for the Hessisches Finanzgericht to consider whether the footwear in question meets the criteria which I have just indicated. In proceedings under Article 177 this Court has the power only to give an abstract interpretation of Community law, as is stated, in this context, for example in the judgment of 14 December 1972 (Case 38/72 Van de Poll v Hauptzollamt Trier [1972] ECR 1329 and in particular paragraph 7 of the decision at p. 1338), which I cited in my opinion in the aforementioned Biegi case, or in the aforementioned judgment of 8 May 1974 in the Osram case (paragraph 10 of the decision at p. 486) which I cited in my opinion in Case 119/75 (judgment of 22 June 1976, Terrapin v Terranova [1976] ECR 1039 at p. 1073).
      (
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         )	Translated from the French.