Report of the Judge-Rapporteur in Case C-191/91

I — Legislative background

1. The Combined Nomenclature of the Common Customs Tariff (CCT) is laid down 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), as amended.

2. Tariff heading 3002, which forms pan of Chapter 30 of that combined nomenclature, entitled Pharmaceutical Products, comprises:

3. That tariff heading is divided into the following subheadings:

4. According to the Explanatory Notes to the CCT issued by the Customs Cooperation Council, heading 3002 covers:

5. Tariff heading 3822 comprises

6. Under the general rules for its interpretation, classification of goods in the combined nomenclature is to be governed by certain principles. Interpretation rule 3(b) states:

II — Facts and procedure before the national court

7. It appears from the order for reference that in 1989 the Oberfinanzdirektion Köln (Principal Revenue Office, Cologne) issued to Abbott GmbH (Abbott) four binding tariff classification notices relating to sets of articles described as test-kits, comprising various laboratory reagents, all packaged together for retail sale, for use as immunoassay tests for diagnostic purposes (detecting/identifying certain substances in human serum and plasma, etc.).

8. The Oberfinanzdirektion and Abbott agreed that the components giving those test-kits their essential character were monoclonal antibodies and that, in accordance with general rule 3(b), above, the kits should be classified under heading 3002. The two parties differed, however, as to the subheading to be applied.

9. In its four tariff classification notices, the Oberfinanzdirektion classified the goods under the residual subheading 30029090, as toxins and similar products. The objection lodged by Abbott seeking a classification under subheading 30029030, animal blood prepared for therapeutic, prophylactic or diagnostic uses was rejected by a decision of 31 August 1990 and Abbott then brought an appeal before the Bundesfinanzhof (Federal Finance Court) seeking the annulment of the four binding notices in issue and the classification of the kits under subheading 30021010 antisera.

10. It appears from the order for reference that the Oberfinanzdirektion considers that the concept of similar products in heading 3002 is to be interpreted broadly and may include antibodies. In view of their method of preparation, monoclonal antibodies are diagnostic reagents of microbial origin or at least similar thereto. Monoclonal antibodies are not antisera, because they are not specific fluid fractions separated from blood after clotting. Even though their characteristics correspond to those of the — polyclonal — antibodies contained in serum from immunized animals, they are produced using the hybridoma technique.

11. Considering that the outcome of the dispute was dependent on the interpretation of the CCT combined nomenclature, the Bundesfinanzhof decided, by order of 12 June 1991, to stay the proceedings and seek a preliminary ruling from the Court of Justice on the following questions:

12. In the grounds of its order, the national court considers, in agreement with the parties to the dispute, that the goods in issue, whose essential character is determined by their monoclonal antibody components, fall under tariff heading 3002. The only doubt concerns the relevant subheading.

13. The national court feels that subheading 30029030 is probably to be ruled out on account of the characteristics of the products, resulting from the way in which they are prepared. It considers that the test-kits may be classified either under subheading 30021010, which covers antisera, or subheading 30029090, other products.

14. In the national court's view, the products in question should nevertheless not be regarded as antisera because the Explanatory Notes to the Harmonized System for heading 3002 (section C) define sera as the fluid fractions separated from blood after clotting. If the same definition were to apply to antisera, it would be difficult to include the products in issue, the way in which they are made, in that category.

15. In the opinion of the national court, the only remaining solution would be to classify the products under subheading 30029090. The fact that they are not among the antigens listed in the Explanatory Notes for heading 3002 (section D), nor are they diagnostic reagents of microbial origin, would not affect such a solution, since those products are listed only by way of example.

16. The national court, considering that a customs classification should in principle be based on the objective characteristics of the goods and that manufacturing methods should be taken into account only to the extent required by the CCT, then wonders whether the concept of antisera alone constitutes a sufficient reference to the method of preparation.

III — Procedure before the Court

17. The order for reference was registered at the Court on 26 July 1991.

18. In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the European Economic Community, written observations were submitted on 22 November 1991 by Abbott, represented by its manager, Erik Hornnaess, and by Dirk Krüger, Rechtsanwalt, Frankfurt, and on 28 November 1991 by the Commission of the European Communities, represented by Blanca Rodríguez Galindo, of its Legal Service, assisted by Roberto Hayder, representing the Legal Service, acting as Agents.

19. Upon hearing the report of the Judge-Rapporteur and the views of the Advocate General and the parties, the Court decided, pursuant to Article 44a of the Rules of Procedure, not to hold a preparatory inquiry and not to open the oral procedure and, pursuant to Article 95(1) and (2) of the Rules of Procedure, to assign the case to the Fourth Chamber. In its written reply to the Court's question as to whether it was appropriate to hold a hearing, Abbott, the applicant in the main proceedings, stated that it had been persuaded by the Commission's observations.

IV — Written observations submitted to the Court

Observations of the applicant in the main proceedings

20. Abbott states that the human body has various defence mechanisms to protect itself against foreign substances. One of those mechanisms is based on the formation of antibodies to counteract such foreign substances, which are known as antigens. The function of antibodies is to adhere to the foreign body, giving phagocytes, or killer cells, the signal to attack the enemy and destroy it. Antibodies react exclusively with those antigens which caused them to form. They are proteins and are also referred to as immunoglobulins.

21. Antibodies are the essential components of antisera obtained from the blood of immunized humans or animals after various elements have been separated. For that reason, the concepts of antiserum and antibody are used synonymously in both technical and everyday language.

22. Antisera obtained from blood comprise a mixture of antibodies. By a complex purification process, pure antibodies, that is to say antibodies which are all aimed at a specific antigen, can be separated out. Such purified antibodies derive from a number of original cells (they are therefore referred to as polyclonal) and have differing capacities for combining with antigens.

23. That disadvantage is avoided in the case of monoclonal antibodies. In their case, an antiserum contains only one type of antibody which derives from a single cell (whence the term monoclonal) and combines with antigens always in the same place and in the same manner.

24. Abbott draws particular attention to the fact that there is no difference between polyclonal and monoclonal antibodies in terms of composition and use. In its opinion, that circumstance is of particular importance in classification. Abbott stresses that the only difference between monoclonal and polyclonal antibodies lies in the way in which they multiply.

25. In order to obtain monoclonal antibodies, it is necessary to separate antibody-producing cells. It is difficult, however, to breed and multiply such cells in cell cultures since they die outside the body. A technique for the multiplication of monoclonal antibodies has none the less been developed, involving two methods:

26. The in vivo method resembles the in vitro with the exception of the last stage. The antibodies are produced not in a culture medium but within the body of a mouse.

27. Abbott observes that the first question to arise is whether the goods in question should be classified under heading 3002 or 3822. Since heading 3822 comprises composite diagnostic or laboratory reagents, other than those of heading No 3002 or 3006, any such classification may be excluded merely by showing that the products fall under heading 3002. In Abbott's view, that is the case.

28. Within heading 3002, two subheadings in particular are possible:

29. Abbott maintains that the goods should be classified under subheading 30021010. In that regard, it refers to the Court's settled case-law to the effect that goods are to be classified with reference to their characteristics and objective properties as defined in the CCT, an approach making for legal certainty, coherent administration and a reduction of tax fraud.

30. In Abbott's view, monoclonal antibodies are to be classified among antisera and other blood fractions for four reasons:

31. Referring to a document from the Oberfinanzdirektion dated April 1991, Abbott submits that the parties to the main proceedings agree that the goods concerned constitute antisera. The Oberfinanzdirektion, however, wishes to classify them under a different tariff subheading.

32. In Abbott's submission, such a classification would be possible if general rule 3(a) were to be applied, with the result that the most specific description should be preferred to headings providing a more general description. In the present case, however, that rule does not apply since the subheading chosen by the Oberfinanzdirektion is a catchall and not a specific position.

33. Abbott further observes that only exceptionally, when there is an explicit reference in the CCT, is it possible to take account of other factors — in particular the manufacturing process — in the classification of goods. In its view, the terms cultures of microorganisms and similar products used in relation to subheading 30029090 do not relate to a manufacturing process. When tariff subheadings refer to such a process, they do so clearly.

34. Abbott points out that the Oberfinanzdirektion bases its argument that the manufacturing process determines the classification of the goods in question on the Explanatory Notes to the Harmonized System. Those notes, however, can in no way extend the scope of the tariff headings. Any such extension would have the effect, in the present case, of changing a component classification (which is the rule in the Combined Nomenclature) into a manufacturing process classification (which is the exception).

35. Abbott further submits that monoclonal antibodies may not be regarded as reagents of microbial but of animal origin, for two distinct reasons:

Origin

36. First, monoclonal antibodies cannot be of microbial origin because that would require at least one of the essential properties of the product to be obtained by a microbiological process. The manufacturing process using cell fusion, however, has no influence on the nature but only on the number of the antibodies. The antibodies themselves are not modified. Their origin remains the spleen cell and more specifically the genetic information contained in that cell and now contained in the hybrid cells. Those hybrid cells are necessary only in order to obtain the desired quantity of antibodies through constant cell division.

Microbial

37. Secondly, Abbott submits that, under the Explanatory Notes to the Harmonized System, a microbiological process must be used in obtaining similar products. Cell fusion, however, is not a microbiological process. Microbiology is the science which deals with microorganisms (such as bacteria or viruses). Isolated cells are not independent organisms and are not, therefore, living beings. Cell fusion, moreover, is an artificial process which does not exist naturally, whereas the concepts of biology and microbiology refer only to processes which take place naturally.

38. Practical reasons, too, militate against the approach taken by the Oberfinanzdirektion, under which polyclonal and monoclonal antibodies would have to be given different classifications although there is nothing to distinguish them in terms of characteristics or use. A further distinction would also have to be drawn between monoclonal antibodies depending on whether they were multiplied in vitro or in vivo, since only one of those two processes might possibly be regarded as microbiological.

39. In Abbott's view, the classification method put forward by the Oberfinanzdirektion runs contrary to the rules laid down by the Court in tariff matters and in particular to legal certainty, since it does not rely on any objective classification criteria (such as composition). Taking the manufacturing process into consideration would also require costly and time-consuming inquiries with producers and would preclude rapid verification of the tariff classification. It might even be the case that the classification could not be verified where antibodies obtained by in vitro and in vivo processes are not separated, since separation is not necessary from a technical point of view. In addition, if that method were followed, classification errors might easily occur, since goods of the same kind would be treated differently. Abbott claims that, in other proceedings, the Oberfinanzdirektion has shared its view that antibodies are to be regarded as antisera.

40. For those reasons, Abbott suggests that the answer to the national court's questions should be:

Observations of the Commission

41. The Commission states that monoclonal antibodies are immunoglobulins and thus to be regarded as blood fractions. Therefore, since the essential component of the test-kits is an immunoglobulin, the goods in question should be classified under tariff heading 3002.

42. On the question of what subheading should be applied, the Commission considers that subheading 30021010, antisera, should be excluded. Although sera contain immunoglobulins, it is not possible to regard any product containing immunoglobulins as a serum. On that point, the Commission agrees with the national court and the Oberfinanzdirektion, which both consider that the method of manufacture of the product should also be taken into account in the tariff classification. As stated in the Explanatory Note C heading 3002, section C, first paragraph, one of the characteristics of sera in general — and of antisera — is the fact that they are fluid fractions separated from blood after clotting. But the products in question are not manufactured by separation after clotting. Nor, moreover, do monoclonal antibodies constitute antisera by reason of their objective characteristics, since they are not fluid blood fractions.

43. In the Commission's view, the test-kits should be regarded as other blood fractions within the meaning of subheading 300210. That subheading is further divided into subheading 30021091, haemoglobin, blood globulins and serum globulins and another subheading, entitled other, itself subdivided into 30021095, of human origin, and 30021099, other. For the Commission, it is clear that immunoglobulins are either blood globulins or serum globulins and should thus be classified under subheading 30021091. Since both those products fall within the same subheading, the question whether monoclonal antibodies fall within it as blood globulins or as serum globulins is largely academic. Nevertheless, it is possible to distinguish between the two types of product inasmuch as globulins (and thus also immunoglobulins) occur normally in blood and retain their characteristics as long as they remain in that state. However, if a serum is obtained and subsequently used, the globulins which it contains will be called serum globulins.

44. The national court's first question should therefore be answered to the effect that the test-kits are to be classified under subheading 30021091 and thus do not fall under subheading 30029090, which is a residual heading.

45. The Commission considers that the answer to the first question also covers the second. The test-kits are not to be regarded as antisera within the meaning of subheading 30021010 either by reason of their objective characteristics (they are not fluid blood fractions) or by reason of their method of manufacture (they are not derived from blood fractions separated after clotting).

46. As regards the third question, the Commission observes that, since it is quite clear that the test-kits are to be classified under heading 3002, no other heading can be envisaged. That holds true for heading 3822, which covers composite diagnostic or laboratory reagents, other than those of heading No 3002 or 3006.

47. The Commission therefore suggests that the following answer should be given to the questions raised by the national court:

1 Language of the case: German.