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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Jan De Nul (Taxation) [2006] EUECJ C-391/05 (14 December 2006)
URL: http://www.bailii.org/eu/cases/EUECJ/2006/C39105.html
Cite as: [2006] EUECJ C-391/05, [2006] EUECJ C-391/5
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OPINION OF ADVOCATE GENERAL
BOT
delivered on 14 December 2006 1(1)
Case C-391/05
Jan de Nul NV
v
Hauptzollamt Oldenburg
(Reference for a preliminary ruling from the Finanzgericht Hamburg (Germany))
(Indirect taxes - Excise duties on mineral oils - The terms "Community waters", "inland waterways" and "navigation")
I - Introduction
1. In this reference the Court is being asked to give a preliminary ruling on the meaning of several terms used in Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils. (2)
2. It is being asked in particular to interpret the term "Community waters" in contrast to the term "inland waterways".
3. The Court is also being asked to rule on whether the operation of a hopper dredger in Community waters must in all respects be regarded as constituting "navigation" within the meaning of Article 8(1)(c) of Directive 92/81 or whether it is necessary to draw a distinction between the various types of activity performed by the dredger during the course of its use, in particular those relating to unladen journeys, to manoeuvres involved in dredging operations and to the transport of materials dredged up during such operations.
4. In this Opinion I will deal with each of these issues in turn.
5. With regard, first of all, to the search for a criterion whereby the term "Community waters" can be distinguished from the term "inland waterways", I shall rule out the "baseline" criterion as used in Articles 3 to 7 of the United Nations Convention on the Law of the Sea, signed at Montego Bay on 10 December 1982. (3) I shall also rule out the functional approach, which in essence maintains that the term "Community waters" in the first subparagraph of Article 8(1)(c) of Directive 92/81 covers all waters in which marine navigation normally takes place for commercial purposes.
6. I shall, however, contend that the term "Community waters" should be interpreted as covering marine waters falling within the sovereignty or jurisdiction of Member States, with the exception of the inland waterways referred to in Article 8(2)(b) of Directive 92/81. I shall also show that those inland waterways comprise the whole of the Community's inland waterway network, as listed in Annex I to Council Directive 82/714/EEC of 4 October 1982 laying down technical requirements for inland waterway vessels. (4)
7. With regard, secondly, to the interpretation of the term "navigation within Community waters", within the meaning of Article 8(1)(c) of Directive 92/81, I shall say first of all that, since a hopper dredger has a propulsion system which makes it capable of autonomous movement, such movement should be equated to navigation. I shall also suggest that the answer which the Court should give to the referring court should be that this term covers manoeuvres carried out by a hopper dredger during suction operations on the sea or river bed, that is to say, journeys made by the dredger whilst performing its dredging activity.
II - Legal background
A - Community law
8. With regard to excise duties, Council Directive 92/12/EEC (5) lays down rules concerning the general arrangements for products subject to excise duty. Article 2(1) of that directive provides that "[t]his Directive and the Directives listed in Article 1(2) shall apply in the territory of the Community as defined, for each Member State, by the Treaty establishing the European Economic Community, and in particular Article 227 [now, after amendment, Article 299 EC] thereof", except for a number of national territories expressly listed.
9. The specific directives provided for in Article 1(2) of Directive 92/12 are, first, Directive 92/81 at issue in these proceedings and, secondly, Council Directive 92/82/EEC of 19 October 1992 on the approximation of the rates of excise duties on mineral oils. (6)
10. According to the fifth recital in the preamble to Directive 92/81, "it is necessary to lay down certain obligatory exemptions at Community level".
11. The sixth recital in the preamble to that directive provides, however, that "it is appropriate to permit Member States to apply on an optional basis certain other exemptions or reduced rates within their own territory where this does not give rise to distortions of competition".
12. That duality between obligatory exemptions, on the one hand, and optional exemptions, on the other, is described in Article 8(1) and (2) of that directive.
13. Article 8(1) of Directive 92/81 reads as follows:
"In addition to the general provisions set out in Directive 92/12/EEC on exempt uses of excisable products, and without prejudice to other Community provisions, Member States shall exempt the following from the harmonised excise duty under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any evasion, avoidance or abuse:
...
(c) mineral oils supplied for use as fuel for the purposes of navigation within Community waters (including fishing), other than in private pleasure craft.
For the purposes of this Directive, "private pleasure craft" shall mean any craft used by its owner or the natural or legal person who enjoys its use either through hire or through any other means, for other than commercial purposes and in particular other than for the carriage of passengers or goods or for the supply of services for consideration or for the purposes of public authorities;
..."
14. Article 8(2) of Directive 92/81 provides:
"Without prejudice to other Community provisions, Member States may apply total or partial exemptions or reductions in the rate of duty to mineral oils or to other products intended for the same uses which are used under fiscal control:
...
(b) for navigation on inland waterways other than for private pleasure craft;
...
(g) in respect of dredging operations in navigable waterways and in ports."
B - National law
15. In Germany, the national provisions on the exempt use of mineral oil are to be found in the Mineralölsteuergesetz (Law on excise duty on mineral oil) of 21 December 1992, (7) and in the Mineralölsteuer-Durchführungsverordnung (Regulation implementing the law on excise duty on mineral oil) of 15 September 1993. (8)
16. Paragraph 4(1)(4) of the MinöStG provides that, subject to Paragraph 12 of that Law, mineral oil may be used exempt from duty as motor or heating fuel on vessels deployed exclusively for commercial navigation and associated ancillary activities such as pilotage, towing and other services, and for work purposes and on warships and public authority boats, sea rescue boats and dedicated fishing boats.
17. Under the statutory power conferred by Paragraph 31(2)(5) of the MinöStG, the German legislature excluded, in Paragraph 17(5) thereof, certain types of vessels from the definition of "ship or boat" within the meaning of Paragraph 4(1)(4) of the MinöStG. Paragraph 17(5)(2) thus provides, in particular, that floating constructions, such as excavators, cranes and grain elevators, are not regarded as "ships or boats" within the meaning of Paragraph 4(1)(4) of the MinöStG, with the result that fuel used on board them as motor or heating fuel cannot be exempt from duty.
III - Facts and procedure in the main proceedings
18. Jan de Nul NV ("Jan de Nul" or "the claimant in the main proceedings") is a company established in Belgium whose business is hydraulic engineering. The company operated the suction and holding vessel Cristoforo Colombo, also referred to as a hopper dredger, during a dredging operation between 19 October 1999 and 17 December 1999 on the Elbe between Hamburg and Cuxhaven. (9)
19. A hopper dredger enables sand, gravel and other similar materials to be sucked up from the sea or river bed. The mixture of water and materials thus poured into the hold of the dredger is then transported to a place where it is dumped.
20. On 3 April 2000 Jan de Nul declared to the Hauptzollamt Oldenburg (Oldenburg Customs Office, "the Hauptzollamt") the quantity of mineral oil that had been consumed during the work of sucking up water and materials.
21. The Hauptzollamt subsequently informed the claimant in the main proceedings that duty on mineral oil should also be paid on quantities consumed during journeys unladen and during manoeuvres involved in suction operations. The supplementary excise duty return made by Jan de Nul on 15 November 2000 resulted in a claim of DEM 183 127.02.
22. By decision of 3 July 2002 the Hauptzollamt dismissed the objection that Jan de Nul had brought on 19 December 2000 against that return. The company then lodged a claim, on 2 August 2002, before the Finanzgericht Hamburg (Hamburg Finance Court) (Germany).
23. Jan de Nul argued before that court that the operation of a hopper dredger must be equated with that of a special vessel involved in commercial navigation, with the result that the fuel used in the movement of the vessel rather than in the dredging operations themselves should remain exempt from excise duty. In its view, the assessment of the excise duty on mineral oil is in breach of Article 8(1)(c) of Directive 92/81, which provides for obligatory exemption from excise duty for navigation within Community waters. In the view of the claimant in the main proceedings, the stretch of the Elbe where the work was carried out constitutes Community waters. It also argued, on the basis of the judgment of the Court in Case C-389/02 Deutsche See-Bestattungs-Genossenschaft, (10) that Article 8(1)(c) of Directive 92/81 exempts commercial navigation in Community waters from excise duty on mineral oil irrespective of the purpose of the journey.
24. The Hauptzollamt, by contrast, argued before the Finanzgericht Hamburg that the stretch of the Elbe in which the hopper dredger was operating is an inland waterway, so that exemption from excise duty under Article 8(2)(b) of Directive 92/81 is at the discretion of the national authorities. It also noted that under Paragraph 17(5)(2) of the MinöStV, floating constructions such as a hopper dredger are not ships or boats within the meaning of Paragraph 4(1)(4) of the MinöStG.
25. By an amending notice of 27 December 2004, the Hauptzollamt amended the excise duty return of 15 November 2000 in the light of the judgment of the Bundesfinanzhof (Federal Finance Court) of 3 February 2004, (11) in which the latter took into consideration the dual function of hopper dredgers and drew a distinction, for the purpose of exemption from excise duty on mineral oil, between the carriage element and the work element of those constructions.
26. The Bundesfinanzhof accepted that, when they are involved in carriage, hopper dredgers are used as ships or boats in commercial navigation and must therefore be exempt from such duty. However, when they are performing dredging, suction and dumping work it is the work element that is foremost, with the result that fuel used in that connection must not be exempt from duty on mineral oil.
27. In its amending notice the Hauptzollamt thus accepted that the consumption of mineral oil during a hopper dredger's unladen journeys should be exempt from duty on mineral oil as provided for by the MinöStG. The return of 15 November 2000 was therefore cancelled in the sum of DEM 164 372.74.
28. The parties therefore agreed that the proceedings were settled in respect of the point that had given rise to the reduction in the amount of duty on mineral oil. It is clear from the documents in the case that the dispute in the main proceedings is therefore restricted to the issue of whether Jan de Nul must pay that duty on the quantity of mineral oil consumed during dredging operations.
IV - The reference for a preliminary ruling
29. With regard, first, to the definition of the terms "Community waters" and "inland waterways", the Finanzgericht Hamburg explains in its order for reference that the Bundesfinanzhof, in a judgment of 23 March 2000, (12) adopted the "baseline" criterion as used in Articles 3 to 7 of the Law of the Sea Convention. (13)
30. In the view of the Finanzgericht, it is possible, however, to envisage another interpretation of the term "Community waters", which could also be understood to incorporate any body of water that is intended and appropriate for use by marine craft. In so far as Directive 92/81 distinguishes between navigation in Community waters and navigation on inland waterways, the Finanzgericht considers that it would seem feasible to take the form of navigation as the distinguishing criterion. It would then be possible to designate as inland waterways those waters on which inland navigation normally takes place, whilst Community waters would be those waters on which marine navigation normally takes place.
31. The Finanzgericht also notes that the interpretation under which exemption from duty exists on the seaward side of the baseline, whilst under national legislation mineral oil consumed on the landward side of the baseline is subject to duty, would lead to considerable difficulties in practice, both for the shipping company and for the customs authorities when checks are carried out. A hopper dredger might cross the baseline several times during an operation.
32. That court also states that using the baseline will lead to an outcome that is both difficult to interpret and ultimately inconsistent, as baselines are not uniformly determined. It notes in that regard that the Elbe between Hamburg and Cuxhaven lies on the landward side of the baseline joining the offshore islands and would therefore be regarded as an inland waterway, whereas in the Baltic Sea area, for example, part of the Trave would be considered to be marine waters.
33. With regard, secondly, to the interpretation of the term "navigation", the Finanzgericht considers it doubtful whether it is appropriate to distinguish between the carriage element and the work element with regard to a hopper dredger. In its view, all forms of navigation lead to mineral oil being consumed - even during periods in which no movement takes place.
34. The Finanzgericht observes, moreover, that such a distinction would also lead to practical problems. In addition to the time and expense needed when compiling returns for the purposes of excise duty on mineral oils, that court takes the view that there would also be considerable classification difficulties because other kinds of specialised vessels also perform services, so that similar questions might arise to those raised in the case of hopper dredgers. It mentions, in this regard, cargo ships equipped with devices whereby they can be loaded or unloaded without using port cranes.
35. In the opinion of the Finanzgericht, regard should be had to establishing whether a vessel is equipped with its own means of propulsion, which it also uses. "Navigation" would then be construed as meaning any form of navigation irrespective of the purpose of the journey - even including the performance of work - provided that the vessel uses its own means of propulsion.
36. The Finanzgericht concludes its observations by stating that, if the guidance it has outlined is correct, the use of the hopper dredger in this case on the Elbe between Cuxhaven and Hamburg would constitute "navigation within Community waters" within the meaning of the first subparagraph of Article 8(1)(c) of Directive 92/81. The action brought before it by Jan de Nul would therefore have to be allowed.
37. However, as it had doubts regarding the interpretation of that provision of Directive 92/81, and also of Article 8(2)(b) of that directive, the Finanzgericht Hamburg decided to stay proceedings pending a ruling from the Court of Justice on the following questions:
"(1) What interpretation should be given to the term "Community waters" in the first subparagraph of Article 8(1)(c) of Directive 92/81 in contrast to the term "inland waterways" for the purposes of the first subparagraph of Article 8(2)(b) of [that directive]?
(2) Should the operation of a suction and holding vessel (so-called "hopper dredger") in Community waters always be regarded as navigation within the meaning of the first subparagraph of Article 8(1)(c) of Directive 92/81, or is it necessary to draw a distinction between the various forms of activity during the course of its use?"
V - Analysis
A - First question
38. By its first question, the Finanzgericht Hamburg is seeking in essence an interpretation from the Court of the term "Community waters" in the first subparagraph of Article 8(1)(c) of Directive 92/81 in contrast to the term "inland waterways" in Article 8(2)(b) of that directive.
39. It is clear both from the order for reference from the Finanzgericht Hamburg and from the written observations lodged at the Court by Jan de Nul, the Hauptzollamt, the Belgian Government and the Commission of the European Communities that two main avenues are explored in order to answer this question, first, the relevance of the baseline criterion provided for in the Law of the Sea Convention and, second, the possibility of a functional approach.
40. In that regard, in order to define the term "Community waters", Jan de Nul considers it is necessary to have regard to the main activity performed in those waters. According to the claimant in the main proceedings, a functional approach should be taken in distinguishing between Community waters and inland waterways and this should not be done on the basis of the baseline criterion provided for in the Law of the Sea Convention. That criterion has a different purpose from that of Directive 92/81 in that it is designed to determine the sovereign rights of each of the States Parties to that Convention and their reciprocal obligations.
41. Jan de Nul explains the functional approach it takes as follows: in order to distinguish between the two terms being interpreted it is necessary to have regard to the type of transport being carried out on Community waters and inland waterways respectively, according to the circumstances in each case. Waterways on which inland navigation normally takes place should be designated as inland waterways because, due to their configuration, inland waterways are not normally suitable for sea-going vessels. By contrast, marine waters are all waters which naturally form part of the sea or which, due to their configuration, are normally used by sea-going vessels.
42. According to that interpretation, both the Wattenmeer and the approaches to the international ports of Emden, Bremen, Bremerhaven, Cuxhaven and Hamburg, as well as the approach to the Kiel Canal, should be regarded as marine waters and hence Community waters.
43. Like the Finanzgericht Hamburg and Jan de Nul, the Commission takes the view that the use of the baseline criterion is not relevant, because that criterion, which is a technical device used for the specific purposes of the Law of the Sea Convention, would not ensure that the intended objectives of Article 8(1)(c) of Directive 92/81, that is to say, to ensure the proper operation of the internal market and avoid distortion of competition, would be achieved.
44. Therefore, the Commission proposes that the difference between Community waters and inland waterways should be determined in the light of the wording and purpose of Directive 92/81. That approach favours an interpretation of the term "Community waters" along the lines proposed by the Finanzgericht Hamburg, covering all waters in which marine navigation normally takes place for commercial purposes. According to the Commission, the area at issue in the main proceedings, between the German coast and the port of Hamburg, which is one of the largest sea ports in the world, should be regarded as being Community waters as thus defined.
45. The Commission adds that the result of this interpretation would, in accordance with the purpose of Article 8(1)(c) of Directive 92/81, be that marine navigation would be treated in the same way in all relevant situations, irrespective of the position of the port approached in relation to the coast, whether it be directly on the coast or further inland on the banks of a large river.
46. Agreeing in essence with the arguments put forward by the Finanzgericht Hamburg in its order for reference, the Hauptzollamt also takes the view that the baseline criterion should not be adopted for the purpose of defining Community waters and inland waterways.
47. It considers, however, that a functional approach whereby "Community waters" covers any waters that are, and are intended to be, used by sea-going vessels is likely to encroach excessively on the rights of the Member States. In addition to marine waters, sea-going vessels could use any German waterways of requisite depth. Besides the Elbe as far as Hamburg, this would apply in relation to the Weser as far as Bremen, the River Hunte as far as Oldenburg, the Kiel Canal (Nord-Ostsee Kanal), the Ems as far as Leer and the Rhine as far as Duisburg. If that interpretation were adopted, the Federal Republic of Germany would, under Article 8(1)(c) of Directive 92/81, exempt from duty mineral oil used as fuel on the abovementioned waterways, which the Hauptzollamt regards as inland waterways.
48. In support of that opinion, it states that, according to the definition of inland waterways contained in Paragraph 1(1)(1) of the Bundeswasserstraßengesetz (Federal Law on Waterways), in the version of 4 November 1998, (14) the Elbe is an inland waterway from the German-Czech border up to the point at which that river flows into the North Sea near Cuxhaven. German law also stipulates which inland waterways may be used by sea-going vessels. Thus, the stretch of the Elbe situated between the lower limit of the port of Hamburg and the point where it meets the North Sea near Cuxhaven is also a maritime waterway under Paragraph 1(1)(6) of the Seeschiffahrtsstraßenordnung (Order relating to maritime waterways), in the version of 22 October 1998. (15)
49. The Hauptzollamt therefore proposes that the Court should adopt the following two definitions:
- "Community waters" comprise territorial seas within a radius of 12 nautical miles from the baseline and marine waters situated on the landward side of that line, with the exception of inland waterways within the meaning of Article 8(2)(b) of Directive 92/81;
- "inland waterways" are the internal waters of a Member State which, up to the point where they meet the open sea, are suitable and intended for navigation.
50. The Belgian Government considers, on the basis of the first paragraph of Article 1 and Article 2(2)(e) of Council Regulation (EC) No 718/1999 of 29 March 1999 on a Community-fleet capacity policy to promote inland waterway transport, (16) that vessels which sometimes undertake a sea crossing fall within the Community rules applying to navigation in Community waters.
51. In the light of all these observations, it should be noted first of all that the terms "Community waters" and "inland waterways" are not expressly defined in the wording of the articles of Directive 92/81. Nor does a reading of the preamble to that directive provide conclusive guidance on the meaning of those two terms. (17)
52. The difference between the terms "Community waters" and "inland waterways" is, however, crucial for the purpose of determining which of the systems of exemption and/or reduction of excise duties on mineral oils provided for in Directive 92/81 must be applied.
53. I should like to point out that the first subparagraph of Article 8(1)(c) of that directive provides that mineral oils supplied for use as fuel for the purposes of navigation within Community waters, other than in private pleasure craft, must be made exempt from the harmonised excise duty. However, Article 8(2)(b) of that directive provides that mineral oils used for navigation on inland waterways, other than for private pleasure craft, are eligible for total or partial exemptions or reductions in the rate of excise duty only at the discretion of the Member States.
54. The first criterion proposed in order to distinguish between "Community waters" and "inland waterways" is that of the baseline, as used in Article 3 et seq. of the Law of the Sea Convention.
55. All the opinions expressed in the written observations lodged with the Court concur in rejecting that criterion in the present case.
56. I am also of that view. I consider that, although this technical device plays a fundamental role in the context of the Law of the Sea Convention, in particular as it constitutes the line from which the territorial sea starts and enables the breadth of the territorial sea to be measured, there appears to be no justification for using it in the context of Directive 92/81 since, as the Commission points out, the two instruments have different purposes.
57. The preamble to the Law of the Sea Convention states that the Convention seeks to establish "a legal order for the seas and oceans which will facilitate international communication, and will promote the peaceful uses of the seas and oceans, the equitable and efficient utilisation of their resources, the conservation of their living resources, and the study, protection and preservation of the marine environment". The baseline device contributes towards establishment of that "legal order" since, as seen above, it helps to delimit the sea areas defined in that Convention: the internal waters, the territorial sea, the contiguous zone and the exclusive economic zone. It is therefore involved in defining the rights that Contracting States can exercise and the obligations to which those States are subject in each of those areas, according to the provisions of the Law of the Sea Convention.
58. As the Court has held, the objective of Directive 92/81 is "to ensure the free movement of mineral oils in the internal market, and to avoid distortions of competition which could stem from different structures of excise duties". (18) The criterion selected in order to differentiate between Community waters and inland waterways must be appropriate to that objective. However, I do not think that the baseline criterion is appropriate.
59. Moreover, reference to the baseline would lead to what, in my view, is the extreme consequence that the "internal waters" of the Member States, which are defined under Article 8 of the Law of the Sea Convention as the "waters on the landward side of the baseline of the territorial sea", should all be regarded as inland waterways within the meaning of Directive 92/81, even when they are situated beyond the river mouths.
60. The baseline criterion contained in Article 3 et seq. of the Law of the Sea Convention does not therefore appear to me to be relevant for distinguishing between Community waters and inland waterways for the purposes of applying Directive 92/81.
61. However, in my view it should not be left merely to the discretion of the Member States to define these two terms, since this might lead to differing interpretations, which would be contrary to the Community legislature's objective of achieving harmonisation through Directive 92/81. That is why it is necessary to look for an independent interpretation of the terms "Community waters" and "inland waterways". (19)
62. In that regard, the Court has already had occasion to rule in Deutsche See-Bestattungs-Genossenschaft that "the definitions relating to the products governed by Directive 92/81 and the exemptions applicable to them should be interpreted independently on the basis of the wording of the provisions in question and of the purpose of the directive". (20)
63. As seen above, the wording of Directive 92/81 remains silent with regard to a definition and, thus, with regard to the distinction between the terms "Community waters" and "inland waterways".
64. So far as the purpose of Directive 92/81 is concerned, it is not immediately clear to me that a satisfactory criterion can be inferred from it. Both the system of mandatory exemption and that of optional exemption must be used, as stated in the sixth recital in the preamble to that directive, in such a way as to avoid distortions of competition. The distortions of competition which that directive therefore seeks to avoid are just as likely to occur in the course of navigation in Community waters as in the course of navigation within the Community network of inland waterways.
65. Since the wording and purpose of Directive 92/81 do not provide a precise definition of the terms "Community waters" and "inland waterways", it is necessary to investigate whether these terms are defined in any other Community measures.
66. Neither of these two terms is new in Community law, nor specific to the subject-matter of Directive 92/81.
67. It is, thus, interesting to note that the term "Community waters" is used in connection with the common fisheries policy. One of the first instances of the use of this term, although differently expressed, was in Council Regulation (EEC) No 2141/70, (21) and again in Council Regulation (EEC) No 101/76, (22) which replaced it. Those regulations required the Member States to ensure equal conditions of access to and use of the fishing grounds situated in maritime waters coming under their sovereignty or within their jurisdiction for all fishing vessels flying the flag of a Member State and registered in Community territory. (23)
68. The term "Community waters" has also been used to designate the Community fishing zone resulting from the communitisation of the Member States" exclusive economic zones. (24)
69. Still on the subject of fish, the most recent Community measures expressly describe as "Community waters" "waters falling within the sovereignty or jurisdiction of Member States" as opposed to "international waters", which are "waters falling outside the sovereignty or jurisdiction of any State". (25)
70. Thus defined in contrast to international waters, "Community waters", interpreted in the broad sense as being marine waters falling within the sovereignty or jurisdiction of Member States, cover all the marine territories of the Member States.
71. In order to determine the lower limit of Community waters in relation to the inland waterways referred to in Article 8(2)(b) of Directive 92/81, it is important at this point to compare the two terms, as the Finanzgericht is asking the Court to do in its first question.
72. In this connection, I note first of all that the term "inland waterways" is fully part of Community law. Thus, Article 80 EC expressly refers to "transport by ... inland waterway".
73. I also note that a number of Community measures have been adopted in order to regulate inland navigation within the Community, as regards, for example, access to the occupation of carrier of goods by waterway and mutual recognition of diplomas, (26) structural improvements, (27) Community-fleet capacity, (28) safety and technical specifications for inland waterway vessels, (29) or laying down common rules applicable to the transport of goods or passengers by inland waterway between Member States. (30)
74. Among those Community measures I should like to highlight Directive 82/714, which, as mentioned above, lays down technical requirements for inland waterway vessels. That directive contributed towards the introduction of a common transport policy in the field of inland navigation and was designed, according to the first recital in its preamble, to help to ensure that "the movement of vessels on the Community network [takes] place under the best conditions as far as safety and competition are concerned".
75. In view of the fact that "Community inland waterways differ as regards safety" Directive 82/714 "divided [the waterways] into a number of zones". (31)
76. It is particularly interesting to refer to Annex I to that directive. It contains the "list of Community inland waterways divided geographically into Zones 1, 2, 3 and 4".
77. I will quote in full the following description of one of the inland waterways of the Federal Republic of Germany classified in Zone 2, which is given in Chapter I of that annex:
"Elbe: from the lower limit of the port of Hamburg to a line linking the Döse beacon and the north-west point of the Hohe Ufer (Dieksand) with the Este, Lühe, Schwinge, Oste, Pinnau, Krückau and Stör tributaries (in each case from the barrage to the mouth) including the Nebenelbe."
78. The zone thus described corresponds to the estuary of the Elbe, which starts level with the port of Hamburg and continues to the point where it meets the North Sea north of Cuxhaven. This zone represents the main stretch of the sector in which the hopper dredger Cristoforo Colombo carried out its dredging operations. It constitutes an inland waterway under Community law and must therefore, in my view, be described as such in the context of the application of Directive 92/81.
79. By referring in that directive to "inland waterways", without giving a specific definition of that term, the Community legislature must necessarily have been referring to the existing definition of what that term covers. Moreover, I consider that it would be inconsistent and contrary to the principle of legal certainty to adopt different definitions of the term "inland waterways" depending on the Community measure in question.
80. A risk that competition will be distorted is also, in my view, contained in Directive 92/81 itself by reason of the dual exemption systems which it permits. The way to eliminate this risk therefore lies in amending the Community legislation, combining the systems and thereby clarifying the relevant law, (32) rather than in a judicial interpretation leading to the creation of a new criterion overriding the others, of a literal origin, already in existence. It would in fact appear to be in the interest of Community law, from the point of view of its accessibility and hence its effectiveness, to avoid such a confusing plurality of definitions.
81. The term "inland waterways" should therefore, in my view, be interpreted as covering the whole of the Community's inland waterway network, as listed in Annex I to Directive 82/714.
82. In relation to that definition, the term "Community waters" should be interpreted as covering all the marine waters which come under the sovereignty or jurisdiction of Member States, with the exception of inland waterways as I have just defined them.
83. The functional approach proposed by the Finanzgericht Hamburg, and supported by Jan de Nul and the Commission, does not appear to me to place this view in question.
84. As I said above, this approach in essence maintains that the term "Community waters", as used in the first subparagraph of Article 8(1)(c) of Directive 92/81, covers all waters in which maritime navigation normally takes place for commercial purposes.
85. This interpretation, in my view, amounts to a denial of the existence at Community level of a special category of inland waterways, that is to say, waterways of a maritime character.
86. Specifically, the Elbe estuary, as described above, has special features which give it the status of a waterway of a maritime character.
87. That description does not derive solely from national law, but is also part of Community law. Thus, Commission Decision 77/527/EEC of 29 July 1977 establishing the list of maritime shipping lanes for the application of Council Directive 76/135/EEC (33) classifies the "Elbe unterhalb des Hamburger Hafens" in that category. Also, Annex I to Commission Regulation (EC) No 13/2004 of 8 December 2003 determining the composition of the list of waterways of a maritime character provided for in Article 3(d) of Council Regulation (EEC) No 1108/70 (34) lists the "Lower Elbe" among the waterways of a maritime character.
88. The fact that waters may be used by sea-going vessels for commercial purposes is therefore not enough of itself for those waters to be classified as Community waters.
89. At the end of this analysis, I therefore suggest that the answer that the Court should give to the Finanzgericht Hamburg should be that the first subparagraph of Article 8(1)(c) of Directive 92/81 should be interpreted as meaning that the term "Community waters" covers maritime waters falling within the sovereignty or jurisdiction of Member States, with the exception of the inland waterways referred to in Article 8(2)(b) of that directive. Those waterways comprise the whole of the Community's inland waterway network, as listed in Annex I to Directive 82/714. (35)
B - Second question
90. By its second question, the Finanzgericht Hamburg is seeking a ruling from the Court on whether the operation of a hopper dredger in Community waters must always be regarded as navigation within the meaning of the first subparagraph of Article 8(1)(c) of Directive 92/81 or whether it is necessary to draw a distinction between the various forms of activity during the course of its use.
91. It is apparent from the order for reference that the Hauptzollamt accepted in the main proceedings that mineral oil consumed by the hopper dredger Cristoforo Colombo during unladen journeys should be exempt from excise duty. Jan de Nul does not, moreover, dispute in the main proceedings that such duty is payable on the quantity of mineral oil consumed in order to carry out the work of sucking up water and materials per se. (36) The dispute in the main proceedings is therefore limited to the issue of the possible exemption of mineral oil consumed during manoeuvres carried out by the dredger in the course of suction operations on the river or sea bed, that is to say, journeys made by the dredger in the performance of its dredging activity. (37)
92. Consequently, and as the Commission suggests, (38) the second question must be interpreted as seeking to determine whether such manoeuvres must be regarded as "navigation within Community waters" within the meaning of Article 8(1)(c) of Directive 92/81.
93. In my view this question should be answered in the affirmative.
94. First, I consider that, since a hopper dredger has a propulsion system which enables it to move independently, its journeys must be regarded as navigation. The situation would be different in the case of a dredger which had no means of self-propulsion. (39)
95. Secondly, the Court has already been required to interpret the concept of "navigation" for the purposes of Article 8(1)(c) of Directive 92/81 in Deutsche See-Bestattungs-Genossenschaft.
96. In that case, a firm of German undertakers, Deutsche See-Bestattungs-Genossenschaft eG ("Deutsche See"), applied to the Hauptzollamt Kiel (Kiel Customs Office) for permission to use mineral oil exempt from excise duties on its vessels in order to perform burials on the high seas. The Hauptzollamt Kiel refused to allow this exemption on the basis of Paragraph 4(1)(4) of the MinöStG, on the ground that Deutsche See's activity was not the commercial carriage of passengers or goods, but the performance of burials at sea. When the case was subsequently referred to it, the Finanzgericht Hamburg sought a ruling from the Court of Justice on the interpretation of the term "navigation" within the meaning of the first subparagraph of Article 8(1)(c) of Directive 92/81.
97. In its judgment the Court held that that provision, which, as I have stated above, provides for exemption for mineral oils supplied for use as fuel for navigation within Community waters, contains a sole exception. The provision makes clear that exemption does not apply to mineral oils used for the purposes of navigation in private pleasure craft. The Court also pointed out that the second subparagraph of Article 8(1)(c) of Directive 92/81 defines the term "private pleasure craft" as craft used "for other than commercial purposes". (40)
98. It follows, in the Court's view, that "all navigation activity for commercial purposes comes within the scope of the exemption from the harmonised excise duty provided for in the first [subparagraph] of Article 8(1)(c) of Directive 92/81". (41) In other words, in the Court's view that provision applies to "all forms of navigation, irrespective of the purpose of the voyage, when it is made for commercial purposes". (42)
99. In the context of that same case, the Court states first of all that it is not disputed that the navigation activity carried out by Deutsche See constitutes a supply of services for consideration. It also expresses the view that "[b]ecause of its commercial nature, that navigation activity does not fall within the exception laid down for private pleasure craft, with the result that it is covered by the exemption". (43)
100. I conclude from that finding that the purpose of the journey made by a vessel is of little relevance where navigation takes place for commercial purposes. It should also be noted that the second subparagraph of Article 8(1)(c) of Directive 92/81 states that commercial purpose covers not only the carriage of passengers or goods but also the supply of services for consideration.
101. The activity of a hopper dredger, in my view, falls within the latter category. Navigation by that vessel, which takes place within the framework of the supply of such services, comes within the scope of Article 8(1)(c) of Directive 92/81 as a result of its commercial purpose.
102. In the context of the supply of services, navigation of the hopper dredger comprises not only unladen journeys and those for the purpose of transporting dredged materials to the dumping location, but also manoeuvres carried out by the dredger during operations for the suction of materials from the sea or river bed, that is to say, journeys made by the dredger whilst performing its dredging activity.
103. In my view, therefore, Article 8(1)(c) of Directive 92/81 should be interpreted as meaning that the term "navigation within Community waters" covers manoeuvres carried out by a hopper dredger during operations for the suction of materials from the sea or river bed, that is to say, journeys made by the dredger in the course of its dredging activity.
104. As indicated above, Jan de Nul does not, in the main proceedings, dispute that excise duties should be paid on the quantity of mineral oil consumed in order to carry out suction work per se. I would state, however, as a final observation, that in my view the exemption provided for in Article 8(1)(c) of Directive 92/81 should also apply to mineral oil consumed whilst actually carrying out such work and dumping the dredged materials. I consider that, for the purposes of applying that provision, the activities performed by a hopper dredger during its dredging operations, either on its journeys or in the course of its work, constitute an indivisible whole.
VI - Conclusion
105. In the light of all the foregoing considerations, I propose that the Court should give the following answers to the questions referred by the Finanzgericht Hamburg:
(1) The first subparagraph of Article 8(1)(c) of Council Directive 92/81/EEC of 19 October 1992 on the harmonisation of the structures of excise duties on mineral oils should be interpreted as meaning that the term "Community waters" covers maritime waters falling within the sovereignty or jurisdiction of Member States, with the exception of the inland waterways referred to in Article 8(2)(b) of that directive. Those waterways comprise the whole of the Community's inland waterway network, as listed in Annex I to Council Directive 82/714/EEC of 4 October 1982 laying down technical requirements for inland waterway vessels.
(2) Article 8(1)(c) of Directive 92/81 should be interpreted as meaning that the term "navigation within Community waters" covers manoeuvres carried out by a hopper dredger during operations for the suction of materials from the sea or river bed, that is to say, journeys made by that dredger in the course of its dredging activity.
1 - Original language: French.
2 - OJ 1992 L 316, p. 12. The Directive was last amended by Council Directive 94/74/EC of 22 December 1994 amending Directive 92/12/EEC on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products, Directive 92/81/EEC on the harmonisation of the structures of excise duties on mineral oils and Directive 92/82/EEC on the approximation of the rates of excise duties on mineral oils (OJ 1994 L 365, p. 46, "Directive 92/81"). Directive 92/81 was repealed by Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy products and electricity (OJ 2003 L 283, p. 51).
3 - Convention approved on behalf of the European Community by Council Decision 98/392/EC of 23 March 1998 (OJ 1998 L 179, p. 1) and ratified by all the Member States of the European Union ("the Law of the Sea Convention").
4 - OJ 1982 L 301, p. 1.
5 - Directive of 25 February 1992 on the general arrangements for products subject to excise duty and on the holding, movement and monitoring of such products (OJ 1992 L 76, p. 1).
6 - OJ 1992 L 316, p. 19.
7 - BGBl. 1992 I, pp. 2150 and 2185, "the MinöStG".
8 - BGBl. 1993 I, p. 1602, "the MinöStV".
9 - In its written observations, Jan de Nul states that this operation was carried out between the Port of Hamburg (kilometre 638) and the waters along the Cuxhaven coast (kilometre 748).
10 - [2004] ECR I-3537.
11 - VII R 4/03, BFHE 205, p. 351.
12 - VII S 26/99, BFHE 191, p. 184.
13 - According to Article 3 of the Law of the Sea Convention, the baseline is the point from which the territorial sea starts and is used in order to measure its breadth. That article provides that "[e]very State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with this Convention". Two methods may be used by States in order to define baselines. The first is the "normal baseline" method (Article 5 of the Law of the Sea Convention): this is the low-water line along the coast, that is to say, the line to which the water recedes at the lowest tides. The other, the "straight baselines" method (Article 7 of the Law of the Sea Convention), consists of "broken lines which link significant points on the coast or on offshore islands across waters" (Lucchini, L., and Vœlckel, M., Droit de la Mer, Volume 1, Pédone, Paris, 1990, pp. 178 and 179). Article 8(1) of the Law of the Sea Convention provides: "[e]xcept as provided in Part IV, waters on the landward side of the baseline of the territorial sea form part of the internal waters of the State". The baseline also makes it possible to measure the breadth of other sea areas such as the contiguous zone and the exclusive economic zone (see, Articles 33(2) and 57, respectively, of the Law of the Sea Convention).
14 - BGBl. 1998 I, p. 3294.
15 - BGBl. 1998 I, p. 3209.
16 - OJ 1999 L 90, p. 1.
17 - In that regard, the expression "within their own territory" used in the sixth recital in the preamble to Directive 92/81 does not provide much clarification since Community waters may also be considered to be "within" the territory of the Member States and, more precisely, as forming an integral part of their marine territory.
18 - Case C-240/01 Commission v Germany [2004] ECR I-4733, paragraph 39.
19 - The Court made the same finding with regard to the expression "used as ... fuel" contained in the first sentence of Article 2(2) of Directive 92/81 in Commission v Germany. Similarly, the Court held in paragraph 21 of Deutsche See-Bestattungs-Genossenschaft, that "[a]ny divergent interpretation at national level of [the] exemption obligations would not only undermine the objectives of the Community legislation and legal certainty, but could introduce unequal treatment between the economic operators concerned".
20 - Paragraph 19.
21 - Council Regulation (EEC) No 2141/70 of 20 October 1970 laying down a common structural policy for the fishing industry (OJ, English Special Edition 1970(III), p. 703).
22 - Council Regulation (EEC) No 101/76 of 19 January 1976 laying down a common structural policy for the fishing industry (OJ 1976 L 20, p. 19).
23 - See Article 2(1) of each of those regulations.
24 - See, in particular, Case C-258/89 Commission v Spain [1991] ECR I-3977, paragraphs 12 and 13. The creation of a Community fishing zone is the result of the Council resolution of 3 November 1976 on certain external aspects of the creation of a 200-mile fishing zone in the Community with effect from 1 January 1977 (OJ 1981 C 105, p. 1).
25 - See, in particular, Articles 2(b) and 3(b) of Council Regulation (EC) No 27/2005 of 22 December 2004 fixing for 2005 the fishing opportunities and associated conditions for certain fish stocks and groups of fish stocks, applicable in Community waters and, for Community vessels, in waters where catch limitations are required (OJ 2005 L 12, p. 1).
26 - See, in particular, Council Directive 87/540/EEC of 9 November 1987 on access to the occupation of carrier of goods by waterway in national and international transport and on the mutual recognition of diplomas, certificates and other evidence of formal qualifications for this occupation (OJ 1987 L 322, p. 20).
27 - Council Regulation (EEC) No 1101/89 of 27 April 1989 on structural improvements in inland waterway transport (OJ 1989 L 116, p. 25).
28 - Regulation No 718/1999.
29 - I will mention two directives: Council Directive 76/135/EEC of 20 January 1976 on reciprocal recognition of navigability licences for inland waterway vessels (OJ 1976 L 21, p. 10) and Directive 82/714.
30 - See, in particular, Council Regulation (EC) No 1356/96 of 8 July 1996 on common rules applicable to the transport of goods or passengers by inland waterway between Member States with a view to establishing freedom to provide such transport services (OJ 1996 L 175 p. 7).
31 - Third recital in the preamble to Directive 82/714. Article 1 of that directive gives details of the classification and refers to Annex I to the directive.
32 - I would point out in this regard that Article 8(1)(e) of the initial proposal for a Council Directive on the harmonisation of the structures of excise duties on mineral oils, submitted by the Commission on 27 September 1990, also made subject to the exemption system "oils supplied for use as fuel for inland navigation and navigation within Community waters" [COM(90) 434 final, OJ 1990 C 322, p. 18].
33 - OJ 1977 L 209, p. 29. That decision is a measure for implementing Article 3(6) of Council Directive 76/135/EEC of 20 January 1976 on reciprocal recognition of navigability licences for inland waterway vessels (OJ 1976 L 21, p. 10), which provides: "Member States may require fulfilment in maritime shipping lanes of additional conditions equivalent to those required for their own vessels. Member States shall inform the Commission of their maritime shipping lanes, the list of which will be drawn up by the Commission within three months following the entry into force of this Directive, on the basis of the information supplied to it by the Member States".
34 - OJ 2004, L 3, p. 3.
35 - In the specific context of the main proceedings and in view of the description of the journey of the dredger provided by Jan de Nul in its written observations, it appears that the dredger travelled to a large extent on the inland waterway constituted by the Lower Elbe, then on Community waters off Cuxhaven. It will be for the Finanzgericht Hamburg to clarify this decisive point in order to establish a division between mineral oils falling within the system of mandatory exemption and those falling within the system of optional exemption.
36 - Order for reference, pp. 3 and 4.
37 - Like the Commission, I interpret the term "journeys" in the broad sense, that is to say, including in it the technical operation of keeping the dredger in one place.
38 - Written observations, paragraphs 68 and 69.
39 - I will give as an example the case of a dredger, towed by a tug to the place where the dredging operations were to be carried out, which was the subject of a decision of the French Tribunal des conflits (Tribunal for resolving conflicts of jurisdiction between the judicial and administrative courts) of 11 December 1972, Préfet de la Gironde v CA Bordeaux (Spathis v Port autonome de Bordeaux), No 1975. That tribunal held with regard to that type of dredger that, "although the manoeuvring of two sets of lines attached to fixed points or moorings can allow it to make movements in a longitudinal and a transverse direction in order to work, this fact, which cannot be dissociated from the actual operation of the vessel, does not mean that it can be regarded as a vehicle for the purposes of the provisions of the Law of 31 December 1957", conferring jurisdiction on judicial tribunals to adjudicate in liability actions in respect of damage caused by a vehicle brought against a public law body (Journal Officiel "Lois et Décrets", 5 January 1958, p. 196). By contrast, the provisions of that Law are applicable in the event of damage caused by a self-propelled dredger carrying out dredging operations in a port (see the decision of the French Tribunal des conflits of 24 May 1965, Préfet de Seine-Maritime v TGI du Havre (Société Marles-Kuhlmann), No 1858).
40 - Deutsche See-Bestattungs-Genossenschaft, paragraph 22.
41 - Ibid., paragraph 23.
42 - Ibid., paragraph 29.
43 - Ibid., paragraph 28.