1 BY A JUDGMENT OF 21 NOVEMBER 1985 , WHICH WAS RECEIVED AT THE COURT ON 29 NOVEMBER 1985 , THE TRIBUNAL D ' INSTANCE , BETHUNE , REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY , A QUESTION ON THE VALIDITY OF COMMISSION REGULATION ( EEC ) NO 3749/83 OF 23 DECEMBER 1983 ON THE DEFINITION OF THE CONCEPT OF ORIGINATING PRODUCTS FOR PURPOSES OF THE APPLICATION OF TARIFF PREFERENCES GRANTED BY THE EUROPEAN ECONOMIC COMMUNITY IN RESPECT OF CERTAIN PRODUCTS FROM DEVELOPING COUNTRIES IN SO FAR AS ANNEX A THERETO , IN CONJUNCTION WITH ARTICLE 1 ( 1 ) AND ARTICLE 3 ( 1 ) THEREOF , PROVIDES THAT ' SAILS ' FALLING WITHIN HEADING NO 62.04 OF THE COMMON CUSTOMS TARIFF ARE REGARDED AS PRODUCTS ORIGINATING IN A COUNTRY ENJOYING THOSE PREFERENCES PROVIDED THAT THEY HAVE BEEN ' MANUFACTURE(D ) FROM SINGLE UNBLEACHED YARN ' IN THAT COUNTRY .
2 THE QUESTION WAS RAISED IN THE CONTEXT OF PROCEEDINGS BROUGHT BY S . R . INDUSTRIES , AN UNDERTAKING WHICH MANUFACTURES SAILBOARDS IN FRANCE , AGAINST THE ADMINISTRATION DES DOUANES . THE PROCEEDINGS CONCERNED THE LEVYING BY THE LATTER OF 15% IMPORT DUTIES ON IMPORTS INTO FRANCE DURING 1984 OF SAILS FALLING WITHIN HEADING NO 62.04 OF THE COMMON CUSTOMS TARIFF AND ORIGINATING IN HONG KONG .
3 IT IS APPARENT FROM THE DOCUMENTS BEFORE THE COURT THAT THE SAILS IN QUESTION WERE MANUFACTURED IN HONG KONG FROM FABRIC IMPORTED FROM JAPAN AND CUT AND MADE UP IN HONG KONG . WHEN THE GOODS WERE SUBJECTED TO CUSTOMS INSPECTION THE ADMINISTRATION DES DOUANES CONSIDERED THAT THE SAILS DID NOT MEET THE CONDITION LAID DOWN IN REGULATION NO 3749/83 FOR THEM TO BE REGARDED AS ORIGINATING IN HONG KONG , NAMELY THE REQUIREMENT OF ' MANUFACTURE FROM SINGLE UNBLEACHED YARN ' . IT REFUSED TO APPLY TO THE IMPORTS AT ISSUE THE TOTAL SUSPENSION OF COMMON CUSTOMS TARIFF DUTIES PROVIDED FOR IN RESPECT OF ' SAILS ' FALLING WITHIN HEADING NO 62.04 OF THE COMMON CUSTOMS TARIFF AND ORIGINATING IN HONG KONG BY COUNCIL REGULATION ( EEC ) NO 3570/83 OF 16 DECEMBER 1983 APPLYING GENERALIZED TARIFF PREFERENCES FOR 1984 TO TEXTILE PRODUCTS ORIGINATING IN DEVELOPING COUNTRIES ( OFFICIAL JOURNAL 1983 , L 362 , P . 92 ).
4 THE ADMINISTRATION DES DOUANES THEREFORE RETROSPECTIVELY LEVIED THE SUM OF FF 2 066 245 , BEING THE DUTY CHARGEABLE IN RESPECT OF THE IMPORTS DURING 1984 . S . R . INDUSTRIES HAS SOUGHT THE REIMBURSEMENT OF THAT SUM BEFORE THE TRIBUNAL D ' INSTANCE , BETHUNE , CONTENDING THAT REGULATION NO 3749/83 IS INVALID IN SO FAR AS IT REQUIRES THE MANUFACTURE OF SAILS IN HONG KONG FROM SINGLE UNBLEACHED YARN .
5 IN ORDER TO BE ABLE TO RESOLVE THAT DISPUTE , THE TRIBUNAL D ' INSTANCE , BETHUNE , REFERRED THE FOLLOWING QUESTION TO THE COURT OF JUSTICE FOR A PRELIMINARY RULING : ' IN VIEW OF THE FACT THAT : ( 1 ) ARTICLE 5 OF REGULATION ( EEC ) NO 802/68 OF THE COUNCIL PROVIDES THAT 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 , ( 2 ) PURSUANT TO THAT ARTICLE , SAILS IMPORTED FROM HONG KONG HAVE BEEN HELD TO ORIGINATE IN HONG KONG , ( 3 ) THE COMMISSION ITSELF ADMITS , IN THE PREAMBLE TO REGULATION NO 3749/83 , THAT IN DEFINING THE CONCEPT OF ORIGIN AS REGARDS PRODUCTS FROM DEVELOPING COUNTRIES A PROCEDURE MUST BE ESTABLISHED CONCERNING DEROGATIONS IN FAVOUR OF THOSE COUNTRIES FROM THE RULES OF ORIGIN LAID DOWN IN BASIC REGULATION NO 802/68 , ( 4 ) NEVERTHELESS THE COMMISION DECIDED IN REGULATION NO 3749/83 THAT , CONTRARY TO THE COMMON DEFINITION OF THE CONCEPT OF ORIGIN , SAILS IMPORTED FROM HONG KONG MUST BE MANUFACTURED FROM UNBLEACHED YARN IN ORDER TO QUALIFY FOR THE EXEMPTION FROM CUSTOMS DUTIES GRANTED TO DEVELOPING COUNTRIES , MUST NOT REGULATION NO 3749/83 BE DECLARED INVALID? '
6 IT MUST BE STATED IN THE FIRST PLACE THAT ARTICLE 1 ( 3 ) OF COUNCIL REGULATION NO 3570/83 , ON WHICH REGULATION NO 3749/83 IS BASED , PROVIDES THAT THE BENEFIT OF THE PREFERENTIAL TARIFF ARRANGEMENTS IS SUBJECT TO CONFORMITY WITH THE CONCEPT OF ORIGINATING PRODUCTS . ALTHOUGH THAT PROVISION CONTAINS AN EXPRESS REFERENCE TO THE PROCEDURE LAID DOWN IN ARTICLE 14 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 ), IT DOES NOT REFER TO ARTICLE 5 OF THAT REGULATION WHICH LAYS DOWN GENERAL CRITERIA FOR DEFINING THE CONCEPT OF ORIGIN FOR THE PURPOSE OF THE COMMON RULES . HOWEVER , ARTICLE 2 OF REGULATION NO 802/68 , AS AMENDED BY REGULATION ( EEC ) NO 1318/71 OF THE COUNCIL OF 21 JUNE 1971 ( OFFICIAL JOURNAL , ENGLISH SPECIAL EDITION 1971 ( II ), P . 394 ), EXPRESSLY PROVIDES THAT REGULATION NO 802/68 IS TO BE WITHOUT PREJUDICE TO THE SPECIAL RULES CONCERNING TRADE TO WHICH PREFERENCES GRANTED BY THE COMMUNITY UNILATERALLY IN DEROGATION FROM THE MOST-FAVOURED-NATION CLAUSE ARE APPLICABLE .
7 CONTRARY TO WHAT WAS CONTENDED BY S . R . INDUSTRIES , THE COMMISSION MAY THEREFORE , WHERE APPROPRIATE , APPLY THE CONCEPT OF THE ORIGIN OF GOODS IN A DIFFERENT AND STRICTER MANNER IN THE FIELD OF GENERALIZED TARIFF PREFERENCES THAN IN THE FRAMEWORK OF THE COMMON RULES DRAWN UP BY REGULATION NO 802/68 . SUCH AN APPLICATION MAY , IN FACT , BE NECESSARY TO ATTAIN THE OBJECTIVE OF THE GENERALIZED TARIFF PREFERENCES OF ENSURING THAT THE PREFERENCES BENEFIT ONLY INDUSTRIES WHICH ARE ESTABLISHED IN DEVELOPING COUNTRIES AND WHICH CARRY OUT THE MAIN MANUFACTURING PROCESSES IN THOSE COUNTRIES . IN LAYING DOWN THE RELEVANT DEFINITION OF THE CONCEPT OF THE ORIGIN OF GOODS , THE COMMISSION HAS CONSEQUENTLY NOT EXCEEDED THE LIMITS OF THE DISCRETION CONFERRED ON IT BY COUNCIL REGULATION NO 3570/83 .
8 S . R . INDUSTRIES CANNOT RELY , IN CONTESTING THE VALIDITY OF THE EXERCISE OF THAT DISCRETION , ON THE THIRD RECITAL IN THE PREAMBLE TO REGULATION NO 3749/83 WHICH IS ALSO REFERRED TO IN THE TRIBUNAL D ' INSTANCE ' S QUESTION . THAT RECITAL RELATES ONLY TO THOSE DEROGATIONS , WHICH ARE NOT RELEVANT TO THE PRESENT CASE , WHICH MAY BE MADE PURSUANT TO ARTICLE 5 OF REGULATION NO 3749/83 IN FAVOUR OF THE LEAST-DEVELOPED OF THE DEVELOPING COUNTRIES OF WHICH HONG KONG IS , HOWEVER , NOT ONE .
9 FINALLY , IT IS NOT POSSIBLE , AS WAS CONTENDED BY S . R . INDUSTRIES , TO REGARD THE REQUIREMENT OF ' MANUFACTURE FROM SINGLE UNBLEACHED YARN ' LAID DOWN BY REGULATION NO 3749/83 IN RESPECT OF SAILS FALLING WITHIN HEADING NO 62.04 OF THE COMMON CUSTOMS TARIFF AS CONTRARY TO THE PRINCIPLE OF THE PROTECTION OF LEGITIMATE EXPECTATIONS SINCE THE SAME REQUIREMENT HAS BEEN LAID DOWN SINCE 1971 IN THE ANNUAL REGULATIONS ON THE DEFINITION OF THE CONCEPT OF ORIGINATING PRODUCTS FOR PURPOSES OF THE APPLICATION OF GENERALIZED TARIFF PREFERENCES .
10 WITH REGARD TO THE ARGUMENT PUT FORWARD BY S . R . INDUSTRIES THAT THE CONDUCT OF THE ADMINISTRATION DES DOUANES LED IT TO BELIEVE THAT IT COULD BENEFIT FROM THE PREFERENCES , IT SUFFICES TO OBSERVE THAT THE CONDUCT OF A NATIONAL AUTHORITY CANNOT HAVE ANY EFFECT ON THE VALIDITY OF A REGULATION ADOPTED BY THE COMMISSION .
11 THE REPLY TO THE QUESTION REFERRED TO THE COURT MUST THEREFORE BE THAT CONSIDERATION OF THE QUESTION HAS DISCLOSED NO FACTOR OF SUCH A KIND AS TO AFFECT THE VALIDITY OF COMMISSION REGULATION NO 3749/83 OF 23 DECEMBER 1983 IN REGARD TO SAILS FALLING WITHIN HEADING NO 62.04 OF THE COMMON CUSTOMS TARIFF .