Opinion of Advocate General
Mr President,
Members of the Court,
1. The German Bundesfinanzhof (Federal Finance Court) has submitted a question for a preliminary ruling on the interpretation of Council Regulation (EEC) No 3563/84 of 18 December 1984 applying generalized tariff preferences for 1985 to textile products originating in developing countries (hereinafter the regulation). The question concerns, more specifically, the classification under that regulation of men's linen windcheaters imported from China and South Korea.
2. In 1985 Lloyd-Tcxtil Handelsgesellschaft mbH&Co. KG (hereinafter Lloyd-Textil) imported into Germany a quantity of men's linen windcheaters from China and South Korea. The Hauptzollamt (Principal Customs Office) Bremen-Freihafen was of the opinion that import duties had to be levied on the import of those products. Lloyd-Textil, on the other hand, considered that the windcheaters qualified for the suspension of customs duties granted by the Community in respect of textile products from developing countries on the basis of the regulation at issue in these proceedings.
3. The first subparagraph, second indent, of Article 1(1) of the regulation provides that during 1985 Common Customs Tariff duties are to be totally suspended in respect of the products listed in Annexes I and II to the regulation. Article 1(2) specifies the countries and territories to which those tariff preferences are to apply. It is undisputed that they include China and South Korea.
4. Annex I contains a list of textile products covered by the Multifibre Arrangement (MFA). That is apparent both from the title of the annex, which begins with the words List of MFA textile products ..., and from the recitals in the preamble to the regulation. In implementing the Multifibre Arrangement, the regulation lays down by country of origin a threshold below which customs duties are suspended on imports into the Community of products referred to in that annex. Annex II contains a list of products which are not covered by the Multifibre Arrangement. For those products, duties are suspended up to a quantity determined by the regulation for the countries of origin as a whole. Both lists consist of an enumeration of products designated by a Nimcxe code and an accompanying description. According to footnote (a) to both annexes, the designation of the products is to be considered as having no more than an indicative value, the preferential scheme being determined by the application of the numbers in the Nimexe.
5. According to Article 12(1) of the Multifibre Arrangement, the Arrangement is limited to textile products of cotton, wool, manmade fibres, or blends thereof. Thus, the products at issue in this case, namely men's linen windcheaters, are not covered by that Arrangement. It follows that they cannot be regarded as falling within Annex I, but would appear instead to fall within Annex II. As stated above, that annex lists the textile products not covered by the Multifibre Arrangement.
6. The question submitted to the Court for a preliminary ruling arises from the ambiguity referred to above: since men's linen windcheaters are not covered by the Multifibre Arrangement, they cannot be referred to in Annex I to the regulation, even though code 61.01-32, which covers linen windcheaters as well, is set out in that annex without any qualification. The Bundesfinanzhof raises the question whether, in those circumstances, Category 161 of Annex II to the regulation is to be interpreted as covering men's linen windcheaters (imported from China and South Korea), even though code 61.01-32, as stated above, is not referred to therein.
7. There is a difference of opinion on that point. Lloyd-Textil, in the proceedings before the Bundesfinanzhof, and the German Government, in observations submitted to the Court of Justice, maintain that men's linen windcheaters are covered by Category 161 of Annex II and do therefore qualify for suspension of customs duties. The Commission, which has also submitted observations to the Court, takes the opposite view. According to the Commission, men's linen windcheaters are covered neither by Category 161 of Annex II nor — a view shared by the other parties before the Court — by Annex I since that annex refers only to products which are covered by the Multifibre Arrangement. The Commission therefore considers that none of the tariff preferences provided for in the regulation can be relevant to the windcheaters in question.
8. First of all I wish to dispose of two arguments which I do not consider relevant. To begin with, I consider that footnote (a) (set out in point 4 above) does not offer a solution. The rule laid down therein refers to situations where, in one of the two annexes, the scope of the Nimexe code relating to a tariff heading and the designation corresponding thereto do not accord with one another. The dispute in this case, however, stems from a divergence of a different kind, namely that Nimexe code 61.01-32, which is referred to in Annex I, accords only in part with the scope of the annex.
9. Secondly, in my view, the question of interpretation under consideration cannot be resolved by reference to the principle of legal certainty, or, at any rate, in the form in which it is put forward by the Commission that argument is not persuasive. The Commission considers that legal certainty would be undermined if Category 161 in Annex II, notwithstanding the absence of any reference therein to men's linen windcheaters, were regarded as covering such garments.
10. In support of its legal certainty argument, the Commission refers to the need, for the sake of the uniform interpretation of Community customs legislation by the national authorities, to rely on the wording used in the regulation and the annexes thereto. Category 161 of Annex II makes no reference whatsoever to Nimexe code 61.01-32.
11. Taking the same approach, the Commission wrongly seeks to rely on the judgment in Ethicon. In that case, the Court rejected the interpretation suggested by Ethicon to the effect that a customs exemption based on a clearly worded provision should be extended to products which were not referred to therein but which were similar as regards their properties and their use to the products mentioned in that provision. The Court refused to give the provision concerned a broad interpretation that was contrary to its wording, relying inter alia on the principle of legal certainty. The case now before the Court is different, however, inasmuch as here the point of departure is a rule that is unclear. The resultant problem cannot therefore be resolved on the basis of the wording of the product designations set out in that rule because that is the very point on which the regulation is unclear.
12. I now turn to the arguments which have led me to the conclusion that Lloyd-Textil and the German Government are correct in their interpretation. I take as my starting point the scheme of the regulation. It is apparent, from its title, that the regulation contains a generalized tariff preference for (practically) all textile products from the developing countries referred to therein. The purpose of the two annexes is, in that regard, merely to distinguish the products which are covered by the Multifibre Arrangement from all other textile products which are not.
13. Admittedly, at the hearing the Agent for the Commission suggested a possible explanation for excluding men's linen windcheaters. He emphasized that tariff preferences are the result of negotiations between the Community and developing countries accorded preferential treatment, in which the products chosen are those which are particularly important for those countries since they account for a substantial volume of exports or of their own production. Hence the omission of linen windcheaters made from flax — a typical West European raw material — in Annex II would suggest that this product is not so important for the countries concerned.
14. So far as concerns the structure, in particular, the Commission maintains in its observations — in order to demonstrate that the regulation clearly does not contain tariff preferences valid for (practically) all textile products — that many textile products other than men's linen windcheaters are excluded from both Annex I and Annex II. In response to the Court's request that it give some examples, the Commission was able to name only the products designated by Nimexe codes 50.01 and 50.02, specifically silkworm cocoons suitable for reeling and raw silk (not thrown). In my view, those examples are not of such a kind as to detract from the generalized nature of the tariff preferences for textile products decided upon in the regulation.
15. The historical background to the regulation also militates against the Commission's reasoning. In May 1985, that is to say some months after the entry into force of the regulation, the problem of men's linen windcheaters was raised when Lloyd-Textil imported a quantity of those products from China and South Korea into Germany. At the time, the German Government suggested that the Commission should remedy the omission in the regulation, by replacing code 61.01-32 in Category 21 of Annex I with code 61.01-ex:32, and by incorporating that code in the same manner in Category 161 of Annex II. Windcheaters would then have been covered by Annex I (and also by the Multifibre Arrangement) if they were made of cotton, wool or synthetic fibres, whereas they would have been covered by Annex II if they were made of another material such as linen. That suggestion was adopted in Council Regulation (EEC) No 3600/85 of 17 December 1985, for 1986.
16. In reply to the Court's questions, the Commission stated that the very fact that the regulation had not yet been amended in 1985 itself pointed to the Community legislature's intention to exclude linen windcheaters from preferential tariffs for 1985. In support of that assertion, the Commission has submitted a working paper from 1985 setting forth the reactions of some other Member States with reference to the problem which arose in May of that year concerning Lloyd-Textil.
Conclusion
17. On the basis of the foregoing considerations, I propose that the Court answer the question submitted by the Bundesfinanzhof as follows:
1 Original language: Dutch.
2 OJ 1984 L 338, p 98.
3 Arrangement regarding International Trade in Textiles, OJ 1974 L 118, p. 2.; adopted by Council Decision 74/214/EEC of 21 March 1974 concluding the Arrangement regarding International Trade in Textiles, OJ 1974 L 118, p. 1, and extended by the Protocol extending the Arrangement regard ing International Trade in Textiles, OJ 1982 L 83, p. 9.
4 In particular, the 15th recital, set out in point 12 below
5 The NIMEXE codes arc laid down in Commission Regu lation (EEC) No 3529/84 of 14 December 1984 amending the nomenclature of goods for the external trades statistics of the Community and statistics of trade between Member States (NIMEXE), OJ 1984 L. 337, p. 1.
6 Multifibre Arrangement, cited in footnote 2, p. 8. It is undisputed that linen, a product made from flax, is not a manmade fibre.
7 In other words ex 32, which is usually inserted if only part of the products arc covered by the relevant NIMEXE code, is missing.
8 Sec footnote 4; the designation referred to in the text is set out on p. 323.
9 61.01-38, 48, 58, 68, 78, 89, 98 and certain 61.02 codes.
10 Cmc C-136/91 Findling Wälzlager [1993] ECR I-1793
11 Case 58/85 Ethicon [1986] ECR 1141.
12 Paragraphs 12 and 13 of the judgment.
13 Whether that is so, is a matter I do not propose to decide here: the fact remains, as is apparent from this case, that linen windcheaters arc indeed made in developing countries (at any rate in China and South Korea), if perhaps exclusively from raw materials imported from industrialized countries.
14 Cited in footnote 4; the relevant codes arc lo be found on pp 269 and 333.
15 The regulation to be interpreted concerns the application of tariff preferences to textile products (according to the title).
16 For the meaning of ex, sec footnote 6 above.
17 The German Government's report to the Commission was incorporated in the working document which the Commission has submitted in an annex to its answer to questions from the Court. The German Government summarized its request in the last sentence as follows: an amendment — if necessary in the form of a corrigendum — to Regulation No 3563/84 should be made as soon as possible.
18 Regulation (EEC) No 3600/85 applying generalized tariff preferences for 1986 to textile products originating in developing countries, OJ 1985 L 352, p. 107.
19 Sec point 7 above, h is clear that Annex I applies only to productc covered by the Multiiibre Arrangement, which is not the case as regards men's Unen windcheaters.