1 BY ORDER OF 20 APRIL 1983 , RECEIVED AT THE COURT ON 25 MAY 1983 , THE FINANZGERICHT ( FINANCE COURT ) DUSSELDORF REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY TWO QUESTIONS ON THE VALIDITY OF REGULATION ( EEC ) NO 964/71 OF THE COMMISSION OF 10 MAY 1971 ON DETERMINING THE ORIGIN OF THE MEAT AND OFFALS , FRESH , CHILLED , OR FROZEN , OF CERTAIN DOMESTIC ANIMALS ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( I ), P . 253 ), AND ON THE INTERPRETATION OF 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 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 165 ).
2 THOSE QUESTIONS AROSE IN THE COURSE OF A DISPUTE BETWEEN THE ZENTRALGENOSSENSCHAFT DES FLEISCHERGEWERBES E.G . ( HEREINAFTER REFERRED TO AS ' ' ZENTRAG ' ' ), FRANKFURT-AM-MAIN , AND THE GERMAN CUSTOMS AUTHORITY . THE DISPUTE RELATES TO THE PAYMENT OF LEVIES APPLICABLE , UNDER ARTICLE 10 OF REGULATION ( EEC ) NO 805/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON ORGANIZATION OF THE MARKET IN BEEF AND VEAL ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1968 ( I ), P . 187 ), TO THE IMPORTATION INTO THE FEDERAL REPUBLIC OF GERMANY OF A NUMBER OF CONSIGNMENTS OF ' ' BEEF , FRESH PIECES WITHOUT BONE ' ' WHICH CAME FROM AUSTRIA . ZENTRAG CLAIMS THAT THESE IMPORTS SHOULD HAVE THE BENEFIT , WHICH WAS REFUSED BY THE CUSTOMS AUTHORITY , OF THE REDUCED RATE APPLICABLE UNDER THE SPECIFIC BASIC LEVY FIXED FOR PRODUCTS ORIGINATING IN AND COMING FROM AUSTRIA , SWEDEN AND SWITZERLAND , IN ACCORDANCE WITH PARAGRAPH ( 3 ) OF THAT ARTICLE AND WITH COMMISSION REGULATION NO 611/77 OF 18 MARCH 1977 FIXING THE SPECIFIC LEVY IN RESPECT OF LIVE BOVINE ANIMALS AND BEEF AND VEAL OTHER THAN FROZEN ( OFFICIAL JOURNAL 1977 , L 77 , P . 14 ).
3 THE MEAT CONSIGNMENTS AT ISSUE WERE DELIVERED TO ZENTRAG BY AN AUSTRIAN SUPPLIER UNDER COVER OF AUSTRIAN CERTIFICATES OF ORIGIN ISSUED BY THE GRAZ CHAMBER OF COMMERCE . THE SUPPLIER HAD BOUGHT BEEF QUARTERS IN HUNGARY AND THEN ARRANGED FOR THE BONING , DRAWING OF THE SINEWS , TRIMMING , CUTTING INTO PIECES AND VACUUM-PACKING OF THE MEAT , WHILE IT WAS STILL SUBJECT TO CUSTOMS CONTROL , IN A PROCESSING PLANT IN AUSTRIA . ACCORDING TO ZENTRAG , SINCE THESE OPERATIONS WERE CARRIED OUT IN AUSTRIA , THE MEAT WAS OF AUSTRIAN ORIGIN ; AGAINST THIS , THE CUSTOMS AUTHORITY MAINTAINS THAT THOSE OPERATIONS DID NOT ALTER THE HUNGARIAN ORIGIN OF THE MEAT IN QUESTION .
4 WITH REFERENCE TO THE ORIGIN OF GOODS , ARTICLE 5 OF REGULATION NO 802/68 OF THE COUNCIL PROVIDES AS FOLLOWS : ' ' A PRODUCT IN THE PRODUCTION OF WHICH TWO OR MORE COUNTRIES WERE CONCERNED SHALL BE REGARDED AS ORIGINATING IN THE COUNTRY IN WHICH THE LAST SUBSTANTIAL PROCESS OR OPERATION THAT IS ECONOMICALLY JUSTIFIED WAS PERFORMED , HAVING BEEN CARRIED OUT IN AN UNDERTAKING EQUIPPED FOR THE PURPOSE , AND RESULTING IN THE MANUFACTURE OF A NEW PRODUCT OR REPRESENTING AN IMPORTANT STAGE OF MANUFACTURE . ' ' THE COMMISSION EXERCISED ITS POWER UNDER ARTICLE 14 OF THAT REGULATION TO LAY DOWN THE IMPLEMENTING PROVISIONS NECESSARY IN ORDER TO APPLY ARTICLE 5 ABOVE , AND PROVIDED IN ARTICLE 1 OF ITS REGULATION NO 964/71 THAT THE SLAUGHTER OF ANIMALS DOES NOT CONFER ON MEAT WHICH IS THUS OBTAINED THE ORIGIN OF THE COUNTRY IN WHICH THE SLAUGHTER TOOK PLACE UNLESS ' ' THE ANIMALS IN QUESTION HAVE BEEN FATTENED IN THAT COUNTRY . . . DURING A PERIOD OF AT LEAST THREE MONTHS IN THE CASE OF . . . CATTLE . ' '
5 IN ORDER TO BE ABLE TO DETERMINE , FOR THE PURPOSES OF THE APPLICATION OF REGULATION NO 611/77 , THE ORIGIN OF THE MEAT WHICH HAD BEEN IMPORTED BY ZENTRAG , THE FINANZGERICHT DUSSELDORF REFERRED THE FOLLOWING QUESTIONS TO THE COURT FOR A PRELIMINARY RULING : ' ' 1 . IS ARTICLE 1 OF REGULATION ( EEC ) NO 964/71 OF THE COMMISSION OF 10 MAY 1971 INVALID ON THE GROUND THAT IT INFRINGES REGULATION ( EEC ) NO 802/68 OF THE COUNCIL OF 27 JUNE 1968? 2.DOES THE PROCESSING OF MEAT BY BONING , TRIMMING , DRAWING THE SINEWS AND CUTTING INTO PIECES CONSTITUTE A PROCESS DETERMINING ORIGIN FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68? ' ' THE FIRST QUESTION
6 IT IS CLEAR FROM THE ORDER MAKING THE REFERENCE THAT THE FINANZGERICHT ' S FIRST QUESTION , RELATING TO THE COMPATIBILITY OF REGULATION NO 964/71 WITH THE CRITERIA FOR DETERMINING ORIGIN LAID DOWN BY ARTICLE 5 OF REGULATION NO 802/68 , CALLS FOR AN EXAMINATION OF THE QUESTION WHETHER REGULATION NO 964/71 HAS THE EFFECT OF PREVENTING PROCESSING OPERATIONS CARRIED OUT ON THE MEAT AFTER SLAUGHTER , AND IN PARTICULAR THE PREPARATION OF PIECES INTENDED FOR SALE TO THE CONSUMER , FROM CONFERRING ON THE MEAT THE ORIGIN OF THE COUNTRY WHERE THOSE OPERATIONS TAKE PLACE , AND IS INVALID ON THOSE GROUNDS .
7 IN THIS CONNECTION , ZENTRAG , THE CUSTOMS AUTHORITY AND THE COMMISSION MAINTAINED IN THEIR OBSERVATIONS BEFORE THE COURT THAT REGULATION NO 964/71 IS NOT INTENDED TO DEAL WITH THE QUESTION WHETHER AND IN WHAT CONDITIONS PROCESSING OPERATIONS SUBSEQUENT TO SLAUGHTER ARE OF SUCH A NATURE AS TO CONFER UPON THE MEAT SUBJECTED TO THOSE OPERATIONS THE ORIGIN OF THE COUNTRY WHERE THEY TAKE PLACE .
8 AS IS CLEAR FROM THE SECOND AND THIRD RECITALS IN THE PREAMBLE TO REGULATION NO 964/71 , THE COMMISSION WAS OF THE OPINION , WHEN IT ADOPTED THAT REGULATION , THAT SLAUGHTER ALONE , TOGETHER WITH CERTAIN RELATED OPERATIONS , COULD NOT BE REGARDED AS A SUBSTANTIAL PROCESS OR OPERATION CARRIED OUT ON THE MEAT WITHIN THE MEANING OF ARTICLE 5 OF REGULATION NO 802/68 , AND FOR THAT REASON IT PROVIDED THAT SLAUGHTER CONFERS ON THE MEAT THE ORIGIN OF THE COUNTRY WHERE IT TAKES PLACE IF THE SLAUGHTERED ANIMALS WERE PREVIOUSLY FATTENED FOR A CERTAIN PERIOD IN THAT COUNTRY . THIS STATEMENT OF THE REASONS FOR REGULATION NO 964/71 SHOWS THAT THE COMMISSION DID NOT WISH TO ADOPT A POSITION ON THE MATTER OF WHAT SUBSEQUENT PROCESSING OPERATIONS MAY BE CAPABLE OF CONFERRING A NEW ORIGIN ON THE MEAT . THIS IS CONFIRMED BY THE WORDING OF ARTICLES 1 AND 2 OF REGULATION NO 964/71 , WHICH MAKE NO REFERENCE TO THE PROCESSING OF THE MEAT AFTER SLAUGHTER .
9 THE REPLY TO THE FIRST QUESTION PUT TO THE COURT BY THE FINANZGERICHT DUSSELDORF SHOULD THEREFORE BE THAT REGULATION ( EEC ) NO 964/71 OF THE COMMISSION OF 10 MAY 1971 DOES NOT HAVE THE EFFECT OF PREVENTING PROCESSING OPERATIONS CARRIED OUT ON MEAT AFTER SLAUGHTER FROM CONFERRING ON THAT MEAT THE ORIGIN OF THE COUNTRY WHERE THOSE OPERATIONS TOOK PLACE .
10 SINCE THE QUESTION WHETHER THE PROCESSING OF MEAT BY BONING , TRIMMING , DRAWING THE SINEWS , CUTTING INTO PIECES AND VACUUM-PACKING CAN CONFER UPON IT A NEW ORIGIN MUST BE DETERMINED ON THE BASIS OF ARTICLE 5 OF REGULATION NO 802/68 ALONE , THE QUESTION CONCERNING THE VALIDITY OF REGULATION NO 964/71 , WHICH WAS RAISED IN THIS CONNECTION BY THE FINANZGERICHT DUSSELDORF , IS DEVOID OF PURPOSE . THE SECOND QUESTION
11 WITH REFERENCE TO THE SECOND QUESTION , WHICH RELATES TO THE INTERPRETATION OF ARTICLE 5 OF REGULATION NO 802/68 WITH REGARD TO THE PROCESSING OPERATIONS AT ISSUE , ZENTRAG CONSIDERS THAT THOSE OPERATIONS SATISFY THE REQUIREMENTS LAID DOWN BY THAT PROVISION . THE RESULT OF THE OPERATIONS IS THAT THE MEAT BECOMES A PRODUCT WHICH CAN BE SOLD DIRECTLY TO THE CONSUMER . VACUUM-PACKING EXTENDS THE TIME FOR WHICH THE MEAT WILL KEEP AND IMPROVES THE MATURING PROCESS . IN ADDITION , THE MARKET VALUE OF THE MEAT IS GREATLY INCREASED AS A RESULT OF THE OPERATIONS , BY MORE THAN 200% IN THE CASE OF CERTAIN PRIME CUTS OF MEAT , BY 17.6% IN RELATION TO ALL THE CUTS TAKEN FROM A SINGLE BEEF QUARTER , OR AS MUCH AS 22% , ACCORDING TO THE DATA SUPPLIED BY ZENTRAG IN THE COURSE OF THE ORAL PROCEDURE , IN RELATION TO THE VALUE PER KILOGRAMME OF THAT BEEF QUARTER .
12 ACCORDING TO THE CUSTOMS AUTHORITY AND THE COMMISSION , THE PROCESS IN QUESTION CANNOT BE DESCRIBED AS THE MANUFACTURE OF A NEW PRODUCT OR AS AN IMPORTANT STAGE OF MANUFACTURE WITHIN THE MEANING OF ARTICLE 5 OF REGULATION NO 802/68 , BECAUSE IT ONLY AFFECTS THE PRESENTATION OF THE PRODUCT AND DOES NOT ALTER ITS ESSENTIAL CHARACTERISTICS . THE ADDED-VALUE WHICH THE PROCESS GIVES TO THE MEAT IS 10% AT MOST .
13 IN THIS CONNECTION , IT SHOULD BE BORNE IN MIND THAT , AS THE COURT STATED IN ITS JUDGMENT OF 26 JANUARY 1977 IN CASE 49/76 GESELLSCHAFT FUR UBERSEEHANDEL ( 1977 ) ECR 41 , THE LAST PROCESS OR OPERATION REFERRED TO IN ARTICLE 5 OF THE REGULATION IS ONLY ' ' SUBSTANTIAL ' ' FOR THE PURPOSES OF THAT PROVISION IF THE PRODUCT RESULTING THEREFROM HAS ITS OWN PROPERTIES AND A COMPOSITION OF ITS OWN , WHICH IT DID NOT POSSESS BEFORE THAT PROCESS OR OPERATION . ACTIVITIES ALTERING THE PRESENTATION OF 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 THE SAID PRODUCT .
14 IN THE PRESENT CASE , IT MAY BE ACCEPTED THAT THE OPERATIONS IN QUESTION FACILITATE THE MARKETING OF THE MEAT BY ENABLING IT TO BE SOLD TO THE CONSUMER THROUGH COMMERCIAL UNDERTAKINGS WHICH DO NOT HAVE THEIR OWN BUTCHER . HOWEVER , THESE OPERATIONS DO NOT PRODUCE ANY SUBSTANTIAL CHANGE IN THE PROPERTIES AND THE COMPOSITION OF THE MEAT , AND THEIR MAIN EFFECT IS TO DIVIDE UP THE DIFFERENT PARTS OF A CARCASE ACCORDING TO THEIR QUALITY AND PRE-EXISTING CHARACTERISTICS AND TO ALTER THEIR PRESENTATION FOR THE PURPOSES OF SALE . A CERTAIN INCREASE IN THE TIME FOR WHICH THE MEAT WILL KEEP AND A SLOWING DOWN IN THE MATURING PROCESS DO NOT CONSTITUTE A SUFFICIENTLY PRONOUNCED QUALITATIVE CHANGE IN SUBSTANCE TO SATISFY THE REQUIREMENTS MENTIONED ABOVE . FINALLY , WHILE THE MARKET VALUE OF A WHOLE BEEF QUARTER WHICH UNDERGOES THE OPERATIONS AT ISSUE IS INCREASED , ACCORDING TO THE CALCULATIONS SUPPLIED BY ZENTRAG AT THE HEARING , BY 22% , THAT FACT IS NOT IN ITSELF OF SUCH A NATURE AS TO ENABLE THOSE OPERATIONS TO BE REGARDED AS CONSTITUTING THE MANUFACTURE OF A NEW PRODUCT OR EVEN AN IMPORTANT STAGE OF MANUFACTURE .
15 THE ANSWER TO THE SECOND QUESTION REFERRED TO THE COURT BY THE FINANZGERICHT DUSSELDORF SHOULD THEREFORE BE THAT ARTICLE 5 OF REGULATION ( EEC ) NO 802/68 OF THE COUNCIL OF 27 JUNE 1968 MUST BE INTERPRETED AS MEANING THAT THE PROCESSING OF THE MEAT DERIVED FROM BEEF QUARTERS BY BONING , TRIMMING , DRAWING THE SINEWS , CUTTING INTO PIECES AND VACUUM-PACKING DOES NOT CONFER UPON THE MEAT THE ORIGIN OF THE COUNTRY IN WHICH THOSE OPERATIONS ARE CARRIED OUT .