Hoesch Metals and Alloys GmbH v Hauptzollamt Aachen.
Date: 2010-02-11
38. In that regard, the Court has held that it was clear from Article 5 of Regulation (EEC) No 802/68 of the Council of 27 June 1968 on the common definition of the concept of the origin of goods (OJ, English Special Edition 1968 (I), p. 165), the provision which was the forerunner of Article 24 of the Customs Code but which is identical in effect, that the decisive criterion is that of the last substantial process or operation (Case C‑26/88 Brother International  [1989] ECR 4253, paragraph 15, and Case C-372/06 Asda Stores  [2007] ECR I‑11223, paragraph 32).
39. As regards the applicability of the list rules, the Court held in Case C-260/08 HEKO Industrieerzeugnisse  [2009] ECR I‑0000, paragraphs 20 and 21, that although those list rules drawn up by the Commission contribute to the determination of the non-preferential origin of goods, those rules do not have binding legal force. Accordingly, the content of those rules must be compatible with the rules of origin as set out in Article 24 of the Customs Code, and may not alter the scope of those rules. That statement is equally valid for the Chapter Notes.
40. Likewise, although relevant acts of secondary legislation must be interpreted in the light of the agreements adopted within the framework of the WTO, the fact remains that the Agreement on Rules of Origin establishes, for the present, only a harmonisation work programme for a transitional period. Since that agreement does not constitute complete harmonisation, the WTO’s members enjoy a margin of discretion with regard to the adaptation of their rules of origin ( HEKO Industrieerzeugnisse , paragraph 22).
41. It is apparent from those considerations that when interpreting Article 24 of the Customs Code, the courts of the Member States may have recourse both to the Chapter Notes and to the list rules, provided that that does not result in an alteration of that article (see HEKO Industrieerzeugnisse , paragraph 23).
42. As regards the question of the relevance of the criterion of a change of tariff subheading, a criterion to be inferred from the list rules, in order to determine whether the operations in question in the main proceedings constitute, for the purposes of Article 24 of the Customs Code, origin-conferring processing or working, the Court has already held that it is not sufficient to seek criteria defining the origin of goods in the tariff classification of processed products, since the Common Customs Tariff was conceived to fulfil special purposes and not in relation to the determination of the origin of the products (see Gesellschaft für Überseehandel , paragraph 5; Case 162/82 Cousin and Others  [1983] ECR 1101, paragraph 16; and HEKO Industrieerzeugnisse , paragraph 29).
43. The Court has also decided that, although it is correct that a change in the tariff heading of a product, caused by a processing operation, constitutes an indication of the substantial nature of that processing or working, the fact remains that processing or working may be substantial in nature even if there is no such change of heading ( HEKO Industrieerzeugnisse , paragraph 35). That finding is also applicable to the criterion of a change of tariff subheading.
45. In that regard, it follows from the Court’s case-law that the determination of the origin of goods must be based on a real and objective distinction between the basic product and the processed product, depending fundamentally on the specific material qualities of each of those products (see Gesellschaft für Überseehandel , paragraph 5; Cousin and Others , paragraph 16; and HEKO Industrieerzeugnisse , paragraph 29).
46. It is also important to note that the last processing or working is ‘substantial’, for the purposes of Article 24 of the Customs Code, only if the product resulting therefrom has its own specific properties and composition, which it did not possess before that process or operation. Activities altering the presentation o f a product for the purposes of its use, but which do not bring about a significant qualitative change in its properties, are not of such a nature as to determine the origin of that product (see Gesellschaft für Überseehandel , paragraph 6; Case 93/83 Zentrag  [1984] ECR 1095, paragraph 13; and HEKO Industrieerzeugnisse , paragraph 28).
47. In addition, the Court has stated that operations of processing a product which do not bring about a substantial change in its properties and composition, because they consist only in dividing it up and altering its presentation, do not constitute, by contrast, a sufficiently pronounced qualitative change which could be regarded as having brought about the manufacture of a new product or even as an important stage in its manufacture (see, to that effect, Zentrag , paragraph 14).
50. Indeed, the Court has already held that, first, the grinding of a raw material to various degrees of fineness cannot be considered as a substantial process or operation on it because the only effect of doing so is to change the consistency of the product and its presentation for the purposes of its later use; it does not bring about a significant qualitative change in the raw material. Secondly, the quality control by grading to which the ground product is subjected and the manner in which it is packaged relate only to the requirements for marketing the product and do not affect its substantial properties (see, as regards the determination of the origin of raw caseine, Gesellschaft für Überseehandel , paragraph 7).
59. According to settled case-law, the procedure established in Article 267 TFEU is based on a clear separation of functions between the national courts and the Court of Justice, with the result that it is solely for the national court before which the dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine in the light of the particular circumstances of the case both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court (see, to that effect, Case C‑305/05 Ordre des barreaux francophones et germanophone and Others  [2007] ECR I‑5305, paragraph 18).
60. That being so, the validity of Regulation No 398/2004 should not additionally be appraised by reference to grounds not specified by the referring court (see, by analogy, Ordre des barreaux francophones et germanophone and Others , paragraphs 17 to 19).
61. It is appropriate to recall, secondly, that, in the sphere of the common commercial policy and, most particularly, in the realm of measures to protect trade, the Community institutions enjoy a broad discretion by reason of the complexity of the economic, political and legal situations which they have to examine (Case C‑351/04 Ikea Wholesale  [2007] ECR I-7723, paragraph 40 and the case-law cited).
62. Furthermore, it is settled case-law that the determination of the existence of injury to the Community industry requires an appraisal of complex economic situations and the judicial review of such an appraisal must therefore be limited to verifying whether relevant procedural rules have been complied with, whether the facts on which the contested choice is based have been accurately stated, and whether there has been manifest error in the appraisal of those facts or misuse of powers (see Ikea Wholesale , paragraph 41 and the case-law cited, and Case C‑398/05 AGST Draht- und Biegetechnik  [2008] ECR I-1057, paragraph 34).
65. In that regard, it must be held that those two regulations differ on an essential point. Regulation No 2229/2003 imposed, for the first time, anti-dumping duties on imports of silicon metal originating in Russia and was promulgated as a result of the initial investigation conducted under Article 5 of the basic regulation. The Council was, therefore, required to establish the existence of injury caused to the Community industry by those imports. On the other hand, Regulation No 398/2004 maintained anti-dumping measures on imports of silicon originating in China, measures which have been in force since 1990, and was therefore adopted following a review carried out under Article 11(2) of the basic regulation. In that regard, it is appropriate to note that a review procedure is, as a rule, objectively different from that of an initial investigation, which is governed by other provisions of the same regulation (Case C-422/02 P Europe Chemi-Con (Deutschland)  v Council [2005] ECR I‑791, paragraph 49).
66. The objective difference between the two procedures lies in the fact that imports subject to a review proceeding are those on which definitive anti-dumping duties have already been imposed and in respect of which sufficient evidence has generally been adduced to establish that the expiry of those measures would be likely to result in a continuation or recurrence of dumping and injury. On the other hand, where imports are subject to an initial investigation, the purpose of that investigation is precisely to determine the existence, degree and effect of any alleged dumping even if the initiation of such an investigation presupposes the existence of sufficient evidence to justify the initiation of that procedure ( Europe Chemi-Con (Deutschland)  v Council , paragraph 50).