1 By order of 26 June 1997, received at the Court on 4 August 1997, the Bundesfinanzhof (Federal Finance Court) referred to the Court for a preliminary ruling under Article 177 of the EC Treaty a question on the interpretation of Commission Regulation (EEC) No 3846/87 of 17 December 1987 establishing an agricultural product nomenclature for export refunds (OJ 1987 L 366, p. 1).
2 The question was raised in proceedings between Mr Bruner, trading as `Georg Bruner', and Hauptzollamt Hamburg-Jonas (Hamburg-Jonas Principal Customs Office, hereinafter `the HZA') in relation to the grant of refunds on exports of poultry from Germany to Equatorial Guinea between 21 June 1988 and 16 January 1989. The applicable legislation
3 Article 9 of Council Regulation (EEC) No 2777/75 of 29 October 1975 on the common organisation of the market in poultrymeat (OJ 1975 L 282, p. 77), last amended by Council Regulation (EEC) No 3907/87 of 22 December 1989 (OJ 1987 L 370, p. 14), provided for the grant of export refunds in the poultrymeat sector to cover the difference between the prices for products on the world market and prices within the Community.
4 The amount of refunds is fixed periodically on the basis of a nomenclature of agricultural products. The nomenclature in effect during the period under consideration is contained in Regulation No 3846/87. In sector 8 (poultrymeat), that regulation distinguishes between the following in relation to poultry cuts and offal other than livers, frozen, with bone in: - `halves or quarters'code 0207 41 11 000 - `whole wings, with or without tips'code 0207 41 21 000 - `breasts and cuts thereof'code 0207 41 41 000 - `legs and cuts thereof'code 0207 41 51 000 - `other': - `halves or quarters, without rumps'code 0207 41 71 100 - `other'code 0207 41 71 900
5 Under Commission Regulations (EEC) No 717/88 of 18 March 1988 (OJ 1988 L 74, p. 37) and No 3216/88 of 19 October 1988 (OJ 1988 L 286, p. 17) fixing the export refunds on poultrymeat, classification under the heading `halves or quarters' (code 0207 41 11 000) gives rise to a right to a refund whereas classification under the subheading `other' (code 0207 41 71 900) does not.
6 After the material time, Commission Regulation (EEC) No 96/89 of 17 January 1989 fixing the export refunds on poultrymeat (OJ 1989 L 14, p. 7) subdivided the heading `other' (0207 41 71) and inserted, inter alia, the subheading `cuts consisting of both unseparated hind quarters, with or without the rump' (code 0207 41 71 300) which gave rise to a right to a refund.
7 Article 11 of Regulation No 2777/75 states that the general rules for the interpretation of the Common Customs Tariff (hereinafter the `CCT') and the special rules for its application are to apply to the classification of products covered by the common organisation of the markets in the poultrymeat sector. In interpreting the terms in the nomenclature of agricultural products, therefore, one of the documents to which reference must be made where necessary is the general rules for the interpretation of the combined nomenclature contained in Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ 1987 L 256, p. 1).
8 General rule 2(a) contained in Section I of Annex I to that regulation provides: `Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled.'
9 Under general rule 3, when goods are prima facie classifiable under two or more headings, classification is to be effected as follows: `(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, in so far as this criterion is applicable.' The main proceedings
10 Between 21 June 1988 and 16 January 1989, Georg Bruner, a business having its registered office in Munich, Germany, exported to Equatorial Guinea consignments of frozen poultry cuts with bone in. Each cut consisted of two hind quarters of chicken `held together naturally by the skin of the back'.
11 Initially, the exporter received refunds from the HZA on the basis that the products were classified as `chicken halves or quarters (with bone in)' - code 0207 41 11 000.
12 Following further examination, the HZA came to the view that the products were not `halves or quarters' but `other' products (code 0207 41 71 900) which did not give rise to a right to a refund and, by a decision of 18 July 1990, which was confirmed on 27 October 1994, withdrew its initial decision to grant the refund and demanded repayment of the sums paid in refunds.
13 The Finanzgericht (Financial Court) rejected Mr Bruner's appeal against the decisions of 18 July 1990 and 27 October 1994 to withdraw the earlier decisions on the ground that the exported cuts were neither `halves' nor `quarters' within the meaning of the combined nomenclature, but rather `other' cuts (`cuts consisting of both unseparated hind quarters', with or without the rump) in respect of which there was no provision for any refund until Regulation No 96/89 came into force, which was after the exports in question.
14 Mr Bruner appealed to the Bundesfinanzhof against that judgment, arguing that: (i) the exported goods were a typical Italian product which should, in accordance with trade practice, be considered as separated quarters; (ii) that interpretation was confirmed by Regulation No 96/89, by the general rules on interpretation of the combined nomenclature and by the case-law of the Court; and, finally, (iii) a Netherlands court had ruled in his favour on that point.
15 In its order for reference, the national court states that it is minded to follow the Finanzgericht's analysis, for three reasons.
16 The first is based on the fact that a `half' is described in the explanatory notes to the combined nomenclature as produced by the symmetrical division of the carcase into right and left halves, and that a `quarter' is half of such a half. Therefore, two hind quarters joined together by the skin and capable of being divided into quarters do not constitute `quarters' within the meaning of the nomenclature.
17 The second reason given by the Bundesfinanzhof is based on the notion that the general rules for the interpretation of the combined nomenclature relied upon by the applicant cannot find application in this case, quite apart from the fact that they are merely subsidiary in nature and cannot prevail over the wording of the combined nomenclature. The first sentence of general rule 2(a) does not normally apply to goods in the earlier chapters (judgment in Case C-318/90 Hauptzollamt Mannheim v Boehringer Mannheim [1992] ECR I-3495) and the condition for the application of general rule 3, namely that there should be several possible headings, is not met.
18 Finally, the Bundesfinanzhof derives support from Regulation No 96/89 which, for the period subsequent to 18 January 1989, created a subheading specifically for `cuts consisting of both unseparated hind quarters' which is classified under the heading `other' and not under the heading `halves or quarters'. That classification confirms the Finanzgericht's interpretation for the previous period.
19 However, the Netherlands College van Beroep voor het Bedrijfsleven (Administrative Court for Trade and Industry) reached the opposite conclusion on 29 April 1997 when, on the basis of the judgment of the Court in Case C-151/93 Voogd Vleesimport en -export [1994] ECR I-4915, it took the view that products such as those at issue should be treated as separate quarters.
20 On the basis that there were therefore doubts as to the interpretation of the Community provisions, the Bundesfinanzhof stayed proceedings to refer the following question to the Court for a preliminary ruling: `Is subheading "ex 0207 41 11" in Sector 8 of the annex to Commission Regulation No 3846/87 of 17 December 1987 establishing an agricultural product nomenclature for export refunds (OJ 1987 L 366, p. 1), valid for the period from 21 June 1988 to 16 January 1989, to be interpreted as meaning that the term "quarters" (of chicken) also includes cuts of poultry not yet wholly separated from each other ("posteriori") as described more precisely in the grounds of this order?'
21 By its question, the national court is essentially asking the Court whether poultry cuts made up of the two hind quarters of the chicken which are still attached to one another by the skin of the back comprise `quarters' (code 0207 41 11 000) within the meaning of the nomenclature of agricultural products for export refunds established by Regulation No 3846/87.
22 Since Regulation No 3846/87 does not define the term `halves or quarters' of frozen poultry with bones within heading 0207 41 11 000, reference must be made both to the general rules for the interpretation of the combined nomenclature and, by analogy, to the explanatory notes to the combined nomenclature, which contain a commentary on those terms.
23 According to the explanatory notes to the combined nomenclature, to which both the Commission and the national court refer, a `half' is produced by the symmetrical division of the carcase into right and left halves and a `quarter' is the result of dividing a `half' into two, the `hind quarter' therefore being made up of the drumstick, the leg, the rear part of the back and the rump.
24 On the basis of that quartering method, the Commission, following the initial analysis of the Bundesfinanzhof, considers that the terms described above are not the same as the rear portion of the carcase which, whilst it does contain the two hind quarters, is the result of chopping the chicken at right angles to the backbone rather than symmetrically along it. Since the terms are clear and cannot apply to the product at issue in the main proceedings, those products necessarily fall within the residual heading `other' (code 0207 41 71 900) and cannot give rise to refunds.
25 That interpretation cannot be accepted. It is common ground that, because of their composition, the products in question correspond exactly to the definition of hind quarters with one difference, namely that, because of the way in which they are cut, the two quarters are not wholly separated but still attached to one another by the skin of the back. Because the content is the same even if the presentation is not, it is necessary to consult the general rules on the interpretation of the combined nomenclature in order to decide whether the products under consideration can fit into the specific category or must be classified under the residual heading.
26 General rule 2(a) requires that the determining criterion for classification be that of the essential character of the complete or finished article, regardless of the form in which it is presented, which may be incomplete, unfinished or unassembled.
27 Clearly, when determining the nature of the product, the fact that the two hind quarters of which it is composed have not been wholly separated but remain attached to one another by a piece of skin does not affect its essential characteristic of being constituted of two hind quarters of chicken.
28 The Commission none the less considers, as does the national court, that general rule 2(a) should not apply in the situation in the main proceedings.
29 First of all, it argues that that rule does `not normally' apply to products in sectors I to VI, that is to say chapters 1 to 38 of the combined nomenclature.
30 In that connection, it should be noted that in Boehringer Mannheim, cited above, at paragraph 18, the Court took the view that the term `not normally', which appears in the commentary on general rule 2(a), means that it cannot be altogether ruled out that that rule of interpretation applies to tariff headings in chapters 1 to 38 of the CCT. In addition, the Court stated that the essential characteristics criterion can only relate to a product `which is so close to the finished product that it can come under the same tariff heading as the finished product', without taking into account the place of that product within the CCT.
31 Secondly, the Commission argues that the goods in question cannot be identified by reference to a potential finished product because, according to the exporter, they are a typical Italian product not intended for further processing and thus constitute in themselves, in the form in which they are exported, a finished product.
32 That argument cannot be accepted either. The objective of general rule 2(a) as construed in Boehringer Mannheim, cited above, is to enable two products which are extremely close to one another, to the extent that they are in substance identical from the user's point of view, to be deemed to be the same notwithstanding differences relating only to their presentation. In this case, by cutting the skin of the back which holds the two hind quarters together in the middle, a consumer would obtain two separate quarters of poultry in all respects identical to the quarters referred to in the explanatory notes to the combined nomenclature. Whether or not the skin is cut, the products under consideration display the essential characteristics of the heading `halves or quarters'.
33 That being so, there is no need to consider the other arguments submitted by the Commission relating to the relevance of national trade usage, the application of general rule 3 and the entry into force, after the material time, of Regulation No 96/89.
34 The reply to the question referred is therefore that poultry cuts made up of two hind quarters of a fowl still attached to one another by the skin of the back constitute `quarters' (code 0207 41 11 000) within the meaning of the nomenclature of agricultural products for export refunds established by Regulation No 3846/87.