Court of Justice of the European Communities (including Court of First Instance Decisions)

1 . PRELIMINARY RULINGS - JURISDICTION OF THE COURT - LIMITS
( EEC TREATY , ARTICLE 177 )
2 . TRADE - GOODS - ORIGIN - DETERMINATION - CRITERIA
( REGULATION NO 802/68 OF THE COUNCIL )
3 . TRADE - GOODS - ORIGIN - DETERMINATION - SEVERAL COUNTRIES CONCERNED IN PRODUCTION - BASIC PRODUCT - SUBSTANTIAL PROCESS - CONCEPT
( REGULATION NO 802/68 OF THE COUNCIL , ARTICLE 5 )
4 . TRADE - GOODS - ORIGIN - DETERMINATION - SEVERAL COUNTRIES CONCERNED IN PRODUCTION - BASIC PRODUCT - CLEANING AND GRINDING - SUBSTANTIAL PROCESS - NOT INVOLVED
( REGULATION NO 802/68 OF THE COUNCIL , ARTICLE 5 )

1 . ALTHOUGH THE COURT HAS NO JURISDICTION UNDER ARTICLE 177 OF THE EEC TREATY TO APPLY THE PROVISIONS OF COMMUNITY LAW TO ACTUAL CASES , IT MAY NEVERTHELESS FURNISH THE NATIONAL COURT WITH THE INTERPRETATIVE CRITERIA NECESSARY TO ENABLE IT TO DISPOSE OF THE DISPUTE .

2 . IN ORDER TO MEET THE PURPOSES AND REQUIREMENTS OF REGULATION NO 802/68 , THE DETERMINATION OF THE ORIGIN OF GOODS MUST BE BASED ON A REAL AND OBJECTIVE DISTINCTION BETWEEN RAW MATERIAL AND PROCESSED PRODUCT , DEPENDING FUNDAMENTALLY ON THE SPECIFIC MATERIAL QUALITIES OF EACH OF THOSE PRODUCTS .

3 . 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 AFFECTING THE PRESENTATION OF THE 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 .

4 . THE CLEANING AND GRINDING OF A RAW MATERIAL TOGETHER WITH THE GRADING AND PACKAGING OF THE PRODUCT OBTAINED DO NOT CONSTITUTE A SUBSTANTIAL PROCESS OR OPERATION FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68 AND DO NOT CONFER A COMMUNITY ORIGIN ON THE SAID PRODUCT ACCORDING TO THAT REGULATION .

IN CASE 49/76
REFERENCE TO THE COURT UNDER ARTICLE 177 OF THE EEC TREATY BY THE VERWALTUNGSGERICHT HAMBURG FOR A PRELIMINARY RULING IN THE ACTION PENDING BEFORE THAT COURT BETWEEN
GESELLSCHAFT FUR UBERSEEHANDEL MBH , HAMBURG ,
AND
HANDELSKAMMER HAMBURG ,

ON THE INTERPRETATION OF ARTICLE 5 OF REGULATION NO 802/68 OF THE COUNCIL , CONCERNING THE ' ORIGIN ' OF GOODS ,

1 BY ORDER OF 28 MAY 1976 , WHICH REACHED THE COURT ON 8 JUNE 1976 , THE VERWALTUNGSGERICHT HAMBURG HAS REFERRED TO THE COURT FOR A PRELIMINARY RULING UNDER ARTICLE 177 OF THE EEC TREATY A QUESTION ON THE INTERPRETATION OF ARTICLE 5 OF REGULATION NO 802/68 OF THE COUNCIL OF 27 JUNE 1968 ON THE COMMON DEFINITION OF THE CONCEPT OF THE ORIGIN OF GOODS ( OJ ENGLISH SPECIAL EDITION , 1968 , P . 165 ).

MORE PARTICULARLY , THE NATIONAL COURT ASKS THE COURT OF JUSTICE TO SAY WHETHER UNTREATED CASEIN OBTAINED IN A THIRD COUNTRY , WHICH HAS BEEN RENDERED FIT FOR USE BY BEING GROUND UP IN A MEMBER STATE OF THE EEC IN THE WAY DESCRIBED BY THE GESELLSCHAFT FUR UBERSEEHANDEL IS TO BE REGARDED AS ORIGINATING IN THAT MEMBER STATE ACCORDING TO ARTICLE 5 OF REGULATION ( EEC ) NO 802/68 OF THE COUNCIL .

2 THE QUESTION HAS ARISEN IN A DISPUTE CONCERNING THE REFUSAL OF THE HANDELSKAMMER , HAMBURG , TO ISSUE TO THE GESELLSCHAFT FUR UBERSEEHANDEL CERTIFICATES STATING FOR THE PURPOSES OF REGULATION NO 802/68 THAT THE FEDERAL REPUBLIC OF GERMANY IS THE COUNTRY OF ORIGIN OF THE CASEIN TREATED BY THE SAID UNDERTAKING .

IT APPEARS FROM THE FILE IN THE MAIN ACTION THAT IN THE ESTABLISHMENTS OF THE GESELLSCHAFT FUR UBERSEEHANDEL , RAW CASEIN IS CLEANED , GROUND TO VARIOUS DEGREES OF FINENESS , GRADED AND THEN APPROPRIATELY PACKAGED .

THE HANDELSKAMMER EXPLAINED AS THE REASON FOR ITS REFUSAL THAT THE CLEANING , GRINDING , GRADING AND PACKING OF THE RAW CASEIN DID NOT CONSTITUTE ACTIVITIES CONFERRING A PARTICULAR ORIGIN ON THE PRODUCT , ACCORDING TO ARTICLE 5 OF REGULATION NO 802/68 OF THE COUNCIL OF 27 JUNE 1968 .
3 ARTICLE 5 OF REGULATION NO 802/68 PROVIDES :
' 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 . '
IT APPEARS FROM THE ORDER FOR REFERENCE THAT IT IS NOT DENIED THAT , IN ACCORDANCE WITH THE SAID PROVISION , THE PROCESS OR OPERATION TO WHICH THE RAW CASEIN IS SUBJECTED IN THIS CASE CONSTITUTES AN ACTIVITY ' CARRIED OUT IN AN UNDERTAKING EQUIPPED FOR THE PURPOSE ' , AND THAT IT IS ' ECONOMICALLY JUSTIFIED ' BECAUSE IT IS NECESSARY FOR THE INDUSTRIAL USE OF THE PRODUCT .

THUS , THE DISPUTE IS CONCERNED IN ESSENCE WITH THE QUESTION WHETHER THE SAID ACTIVITY CONSTITUTES A ' SUBSTANTIAL ' PROCESS OR OPERATION FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68 , RESULTING IN ' THE MANUFACTURE OF A NEW PRODUCT ' OR REPRESENTING ' AN IMPORTANT STAGE OF MANUFACTURE ' .

IT IS THEREFORE IN RESPECT OF THIS QUESTION THAT AN ANSWER SHOULD BE GIVEN TO THE NATIONAL COURT .

4 ALTHOUGH THE COURT HAS NO JURISDICTION UNDER ARTICLE 177 OF THE EEC TREATY TO APPLY THE PROVISION OF COMMUNITY LAW TO ACTUAL CASES , IT MAY NEVERTHELESS FURNISH THE NATIONAL COURT WITH THE INTERPRETATIVE CRITERIA NECESSARY TO ENABLE IT TO DISPOSE OF THE DISPUTE .

5 ACCORDING TO THE LAST RECITAL IN THE PREAMBLE TO REGULATION NO 802/68 AND TO ARTICLE 1 OF THAT REGULATION , A COMMON DEFINITION OF THE CONCEPT OF THE ORIGIN OF GOODS CONSTITUTES AN INDISPENSABLE MEANS OF ENSURING THE UNIFORM APPLICATION OF THE COMMON CUSTOMS TARIFF , OF QUANTITATIVE RESTRICTIONS AND OF ALL OTHER MEASURES ADOPTED , IN RELATION TO THE IMPORTATION OR EXPORTATION OF GOODS , BY THE COMMUNITY OR BY THE MEMBER STATES .

FOR THOSE PURPOSES , ARTICLES 4 AND 5 OF THE REGULATION BASE SUCH A DEFINITION ON OBJECTIVE CRITERIA , MAKING IT POSSIBLE TO ENSURE THE UNIFORM APPLICATION IN ALL THE MEMBER STATES OF THE CONCEPT OF THE ORIGIN OF GOODS AND THUS TO AVOID DEFLECTIONS OF TRADE AND ABUSES .

IN PARTICULAR , THERE CAN BE SEEN IN ARTICLE 6 OF THE REGULATION THE INTENTION TO PREVENT THE ORIGIN OF GOODS IN THE PRODUCTION OF WHICH TWO OR MORE COUNTRIES ARE CONCERNED FROM BEING DETERMINED BY WAY OF A NON-SUBSTANTIAL PROCESS OR OPERATION IN SUCH A MANNER AS TO DEFEAT THE PURPOSES OF ARTICLE 1 OR TO CIRCUMVENT THE MEASURES ADOPTED BY THE MEMBER STATES IN RELATION TO IMPORTATION OR EXPORTATION .

IN THESE CIRCUMSTANCES , IT WOULD NOT SEEM SUFFICIENT TO SEEK CRITERIA DEFINING THE ORIGIN OF GOODS IN THE TARIFF CLASSIFICATION OF THE PROCESSED PRODUCTS , FOR THE COMMON CUSTOMS TARIFF HAS BEEN CONCEIVED TO FULFIL SPECIAL PURPOSES AND NOT IN RELATION TO THE DETERMINATION OF THE ORIGIN OF PRODUCTS .

ON THE CONTRARY , IN ORDER TO MEET THE PURPOSES AND REQUIREMENTS OF REGULATION NO 802/68 , THE DETERMINATION OF THE ORIGIN OF GOODS MUST BE BASED ON A REAL AND OBJECTIVE DISTINCTION BETWEEN RAW MATERIAL AND PROCESSED PRODUCT , DEPENDING FUNDAMENTALLY ON THE SPECIFIC MATERIAL QUALITIES OF EACH OF THOSE PRODUCTS .

6 THEREFORE , 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 .

IN PROVIDING THAT THE SAID PROCESS OR OPERATION MUST , IN ORDER TO CONFER A PARTICULAR ORIGIN , RESULT IN THE MANUFACTURE OF A NEW PRODUCT OR REPRESENT AN IMPORTANT STAGE OF MANUFACTURE , THE ABOVEMENTIONED ARTICLE 5 SHOWS IN FACT THAT ACTIVITIES AFFECTING THE PRESENTATION OF THE 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 .

7 THE GRINDING OF A RAW MATERIAL SUCH AS RAW CASEIN TO VARIOUS DEGREES OF FINENESS CANNOT BE CONSIDERED AS A PROCESS OR OPERATION FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68 , BECAUSE THE ONLY EFFECT OF DOING SO IS TO CHANGE THE CONSISTENCY OF THE PRODUCT AND ITS PRESENTATION FOR THE PURPOSES OF ITS LATER USE ; IT DOES NOT BRING ABOUT A SIGNIFICANT QUALITATIVE CHANGE IN THE RAW MATERIAL .

FURTHERMORE , THE QUALITY CONTROL BY GRADING TO WHICH THE GROUND PRODUCT IS SUBJECTED AND THE MANNER IN WHICH IT IS PACKAGED RELATE ONLY TO THE REQUIREMENTS FOR MARKETING THE PRODUCT AND DO NOT AFFECT ITS SUBSTANTIAL PROPERTIES .

8 IN ITS OPINIONS EXPRESSED AT ITS MEETINGS OF 17 AND 18 DECEMBER 1975 AND OF 22 TO 24 JUNE 1976 , THE COMMITTEE ON ORIGIN SET UP UNDER ARTICLE 12 OF REGULATION NO 802/68 HAS FOUND THAT THE GRINDING TO DIFFERENT DEGREES OF FINENESS , THE SORTING AND PACKAGING OF CASEIN DO NOT CONSTITUTE ACTIVITIES INVOLVING A PROCESS OR OPERATION CONFERRING ON THE PRODUCT RESULTING FROM THOSE ACTIVITIES A PARTICULAR ORIGIN FOR THE PURPOSES OF THE SAID REGULATION .

ALTHOUGH OPINIONS EXPRESSED BY THE COMMITTEE ARE NOT BINDING , EXCEPT IN SO FAR AS THE COMMISSION HAS ADOPTED IMPLEMENTING PROVISIONS IN APPLICATION OF ARTICLE 14 ( 3 ) ( A ) OF REGULATION NO 802/68 , NEVERTHELESS , UNTIL SUCH TIME AS THE COMMISSION ADOPTS CONTRARY PROVISIONS UNDER SUBPARAGRAPHS ( B ) AND ( C ) OF THE SAID ARTICLE 14 ( 3 ), THEY CONSTITUTE AN IMPORTANT CRITERION FOR INTERPRETING ARTICLE 5 OF THE SAID REGULATION , THE SCOPE OF WHICH THEY DEFINE IN RESPECT OF SPECIFIC CASES .

9 IT IS THEREFORE TO BE CONCLUDED THAT THE CLEANING AND GRINDING OF A RAW MATERIAL , SUCH AS RAW CASEIN IMPORTED FROM A THIRD COUNTRY INTO A MEMBER STATE , TOGETHER WITH THE GRADING AND PACKAGING OF THE PRODUCT OBTAINED , DO NOT CONSTITUTE A SUBSTANTIAL PROCESS OR OPERATION FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68 , AND DO NOT CONFER A COMMUNITY ORIGIN ON THE SAID PRODUCT , ACCORDING TO THAT REGULATION .

COSTS
10 THE COSTS INCURRED BY THE COMMISSION OF THE EUROPEAN COMMUNITIES , WHICH HAS SUBMITTED OBSERVATIONS TO THE COURT , ARE NOT RECOVERABLE .

AS THESE PROCEEDINGS ARE , IN SO FAR AS THE PARTIES TO THE MAIN ACTION ARE CONCERNED , A STEP IN THE ACTION PENDING BEFORE THE NATIONAL COURT , THE DECISION ON COSTS IS A MATTER FOR THAT COURT .

ON THOSE GROUNDS ,
THE COURT
IN ANSWER TO THE QUESTION REFERRED TO IT BY THE VERWALTUNGSGERICHT HAMBURG BY ORDER OF 28 MAY 1976 , HEREBY RULES :
THE CLEANING AND GRINDING OF A RAW MATERIAL , SUCH AS RAW CASEIN IMPORTED FROM A THIRD COUNTRY INTO A MEMBER STATE , TOGETHER WITH THE GRADING AND PACKAGING OF THE PRODUCT OBTAINED , DO NOT CONSTITUTE A SUBSTANTIAL PROCESS OR OPERATION FOR THE PURPOSES OF ARTICLE 5 OF REGULATION NO 802/68 , AND DO NOT CONFER A COMMUNITY ORIGIN ON THE SAID PRODUCT ACCORDING TO THAT REGULATION .