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

Provisional text

JUDGMENT OF THE COURT (Sixth Chamber)

12 December 2024 (*)

( Reference for a preliminary ruling - Customs union - Regulation (EEC) No 2658/87 - Common Customs Tariff - Tariff classification - Combined Nomenclature - Heading 1516 - Fats and oils and their fractions - Fish oil in the form of ethyl esters - Esterification of fatty acids with ethanol - Implementing Regulation (EU) 2019/1661 - Validity )

In Case C‑388/23,

REQUEST for a preliminary ruling under Article 267 TFEU from the rechtbank Noord-Holland (District Court, Noord-Holland, Netherlands), made by decision of 27 June 2023, received at the Court on 27 June 2023, in the proceedings

Golden Omega S.A.

v

Inspecteur van de Belastingdienst/Douane, kantoor Rotterdam Rijnmond,

THE COURT (Sixth Chamber),

composed of T. von Danwitz, Vice-President of the Court, acting as President of the Sixth Chamber, A. Kumin (Rapporteur) and I. Ziemele, Judges,

Advocate General: M. Szpunar,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–        Golden Omega S.A., by A.J.C. Lindsen and R.R. Ramautarsing, tax advisors,

–        the Netherlands Government, by M.K. Bulterman and J.M. Hoogveld, acting as Agents,

–        the European Commission, by M. Salyková and F. van Schaik, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1        This request for a preliminary ruling concerns (i) the interpretation of heading 1516 of the Combined Nomenclature set out in Annex I to 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 by Commission Implementing Regulation (EU) No 2018/1602 of 11 October 2018 (OJ 2018 L 273, p. 1) (‘the CN’), and (ii) the validity of Commission Implementing Regulation (EU) 2019/1661 of 24 September 2019 concerning the classification of certain goods in the Combined Nomenclature (OJ 2019 L 251, p. 1).

2        The request has been made in proceedings between Golden Omega S.A. and the Inspecteur van de Belastingdienst/Douane, kantoor Rotterdam Rijnmond (Inspector of the Tax and Customs Administration, Rotterdam Rijnmond office, Netherlands) (‘the Tax Inspector’) concerning the CN tariff classification of fish oil in the form of ethyl esters, bearing the trade name ‘Fish Oil EE 1050’.

 Legal context

 International law

 The HS

3        The Harmonized Commodity Description and Coding System (‘the HS’) was drawn up by the Customs Cooperation Council, now the World Customs Organization (WCO), established by the Convention establishing a Customs Cooperation Council, concluded in Brussels on 15 December 1950. The HS was established by the International Convention on the Harmonized Commodity Description and Coding System, concluded in Brussels on 14 June 1983 (United Nations Treaty Series, vol. 1503, p. 4, No 25910 (1988)), and approved, with its protocol of amendment of 24 June 1986, on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1) (‘the HS Convention’).

4        The WCO approves, under the conditions laid down in Article 8 of the HS Convention, the Explanatory Notes and Classification Opinions adopted by the HS Committee established by Article 6 of that convention.

5        Under Article 3(1)(a) of the HS Convention, each Contracting Party undertakes that its customs tariff and statistical nomenclatures will be in conformity with the HS, first, by using all the headings and the subheadings of the HS without addition or modification, together with their related numerical codes, second, by applying the General rules for the interpretation of the HS and all the section, chapter and subheading notes without modifying their scope, and third, by following the numerical sequence of the HS.

 The Explanatory Notes published by the WCO

6        The Explanatory Notes published by the WCO relating to Chapter 15 of the HS state as follows:

‘(A)      This Chapter covers:

(1)      Animal, vegetable or microbial fats and oils, whether crude, purified or refined or treated in certain ways (e.g., boiled, sulphurised or hydrogenated).

(2)      Certain products derived from fats or oils, particularly their cleavage products (e.g., crude glycerol).

(3)      Compounded edible fats and oils (e.g., margarine).

(4)      Animal or vegetable waxes.

(5)      Residues resulting from the treatment of fatty substances or of animal or vegetable waxes.

The following are, however, excluded:

…

(e)      Fatty acids, acid oils from refining, fatty alcohols, glycerol (other than crude glycerol), prepared waxes, medicaments, paints, varnishes, soap, perfumery, cosmetic or toilet preparations, sulphonated oils or other goods of Section VI.

…

With the exception of sperm oil and jojoba oil, animal, vegetable or microbial fats and oils are esters of glycerol with fatty acids (such as palmitic, stearic and oleic acids).

…’

7        The Explanatory Notes published by the WCO relating to heading 1516 of the HS state:

‘…

This heading covers animal, vegetable or microbial fats and oils, which have undergone a specific chemical transformation of a kind mentioned below, but have not been further prepared.

The heading also covers similarly treated fractions of animal, vegetable or microbial fats and oils.

…

(B)      Inter-esterified, re-esterified or elaidinised fats and oils.

(1)      Inter-esterified (or trans-esterified) fats and oils. The consistency of an oil or fat can be increased by suitable rearrangement of the fatty acid radicals in the triglycerides contained in the product. The necessary interaction and rearrangements of the esters is stimulated by the use of catalysts.

(2)      Re-esterified fats and oils (also called esterified fats and oils) are triglycerides obtained by direct synthesis from glycerol with mixtures of free fatty acids or acid oils from refining. The arrangement of the fatty acid radicals in the triglycerides is different from that normally found in natural oils.

…’

 The classification opinions adopted by the HS Committee

8        Classification opinion 1516.10/1, adopted by the HS Committee at the 61^st session, held in March 2018, states:

‘1.      A product consisting of 90% of re-esterified triglycerides of highly concentrated omega-3 fatty acids EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) produced from raw anchovy oil. The remaining 10% of the product consists mainly of mono- and diglycerides. The product contains EPA (400 mg/g) and DHA (300 mg/g). Vitamin E (tocopherol) has been added to the product as an antioxidant. The raw anchovy oil has undergone the manufacturing steps of deacidification, ethyl esterification, distillation, filtration, bleaching, re-esterification and deodorization. The product is presented in barrels and will be used in the manufacture of food supplements.’

9        In accordance with Classification Opinion 2106.90/36, adopted by the HS Committee at that 61^st session, held in March 2018:

‘36.      A product consisting of ethyl esters of highly concentrated omega-3 fatty acids EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) produced from raw anchovy oil. Vitamin E (tocopherol) has been added to the product as an antioxidant. The raw anchovy oil has undergone the manufacturing steps of deacidification, ethyl esterification, distillation, filtration, bleaching and deodorization. The product is presented in barrels and will be used in the manufacture of food supplements.’

 European Union law

 The CN

10      The tariff classification of goods imported into the European Union is governed by the CN. The CN is based on the HS. The CN reproduces the six-digit headings and subheadings of the HS, with only the seventh and eighth figures creating further subdivisions which are specific to it.

11      Under the General rules for the interpretation of the CN, which are set out in Part One, Section I(A), of Annex I to Regulation No 2658/87:

‘Classification of goods in [the CN] shall be governed by the following principles:

1.      The titles of sections, chapters and sub-chapters are provided for ease of reference only; for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the following provisions.

…

6.      For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section and chapter notes also apply, unless the context requires otherwise.’

12      Part Two of the CN includes Section III, which contains Chapter 15, entitled ‘Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes’, and Section IV, which contains Chapter 21, entitled ‘Miscellaneous edible preparations’.

13      Chapter 15 of the CN includes the following headings and subheadings:

‘…

…’

14      Chapter 21 of the CN includes the following headings and subheadings:

‘…

…’

 Implementing Regulation 2019/1661

15      The annex to Implementing Regulation 2019/1661 consists in a table divided into three columns. Column 1 of that table sets out the description of the goods referred to, column 2 reproduces the classification of those goods in the CN and column 3 specifies the reasons for that classification. As regards subheading 2106 90 92 of the CN, that table provides:

‘…

…’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

16      Golden Omega sells fractions of fish oil, including a fraction in the form of ethyl esters, which bears the trade name ‘Fish Oil EE 1050’ (‘the product at issue’).

17      On 25 November 2019, the Tax Inspector issued Golden Omega with binding tariff information (BTI) concerning the product at issue, valid from 25 November 2019 until 24 November 2022, in which it classified that product under CN subheading 2106 90 92. The customs duty for products classified under that subheading amounts to 12.8%.

18      Claiming that that product should be classified, like fish oil in the form of triglycerides, under heading 1516 10 90, subject to a customs duty of 10.9%, Golden Omega lodged an objection against the 2019 BTI.

19      By decision of 28 February 2020, the Tax Inspector rejected that objection. Golden Omega then brought an action against that decision before the rechtbank Noord-Holland (District Court, Noord-Holland, Netherlands), which is the referring court.

20      It is apparent from the order for reference that on 12 April 2016 the Tax Inspector had issued Golden Omega with a first BTI in which that inspector had classified the product at issue under subheading 2106 90 92 of the CN. Golden Omega had challenged that classification. By judgment of 3 December 2018, the referring court had found in Golden Omega’s favour and, accordingly, annulled the 2016 BTI, finding, in particular, that the treatment of raw fish oil as carried out by that company was referred to in the wording of heading 1516 of the HS. In that judgment, the referring court had concluded that the product at issue could not be classified under heading 2016 of the HS, since it was covered by heading 1516 thereof.

21      The referring court states also that the Tax Inspector had failed to bring an appeal against the judgment of 3 December 2018. In addition, in consultation with the European Commission, that inspector had decided to refer the matter to the Customs Code Committee with regard to the classification of the product in question. Following that referral, Implementing Regulation 2019/1661 was adopted, which provides that a product such as the product at issue must be classified under subheading 2106 90 92.

22      Before the referring court, Golden Omega submits that, pursuant to the General rules for the interpretation of the CN, the product at issue should be classified under CN heading 1516. In that regard, it states that the fats and oils covered by that heading correspond to the animal fats and oils of which that product consists and that the treatment and/or transformation referred to in that heading correspond to those to which that product had been subject to, namely refining, esterification and fractioning. According to Golden Omega, it is irrelevant that that product is esterified with ethanol rather than with glycerol. As regards Implementing Regulation 2019/1661, it submits that, by failing to comply with the legally binding wording of heading 1516 of the CN and, therefore, by unlawfully altering the scope of that heading, the Commission exceeded its powers. That regulation, in its submission, is therefore invalid.

23      The referring court shares Golden Omega’s view. That court notes, in particular, that, since heading 1516 of the CN refers to transformation by ‘esterification’, without drawing a distinction according to the type of alcohol used for that purpose, it is possible to consider that esterification with ethanol also comes under that heading. Furthermore, although, as is apparent from the Explanatory Notes published by the WCO relating to Chapter 15 of the HS, it could be argued that, from a chemical point of view, fatty acid ethyl esters are not animal fats, such a finding would not rule out, in view of the wording of that heading, classification of ethyl esters under that heading. In that context, the referring court states that the Explanatory notes published by the WCO, which are referred to in the grounds of Implementing Regulation 2019/1661, do not have binding force, with the result that they should not be given paramount importance.

24      In those circumstances, the rechtbank Noord-Holland (District Court, Noord-Holland) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Is heading 1516 of the CN to be interpreted as containing restrictions relating to the method and substance used for esterification of an animal oil and, if so, what are those restrictions?

(2)      In order to fall under heading 1516, must an animal oil, such as fish oil, be esterified with glycerol?

(3)      Is an animal oil, such as fish oil, that is esterified with ethanol to be excluded from classification under heading 1516?

(4)      In answering the above questions, is it relevant to assess the extent to which the product has undergone the processing mentioned in heading 1516 and, if so, on the basis of what criteria should that assessment be carried out?

(5)      Do the answers to the above questions affect the validity of [Implementing Regulation 2019/1661] and, if so, how?’

 Consideration of the questions referred

25      As a preliminary point, it should be noted that, when the Court receives a reference for a preliminary ruling on tariff classification, its function is more to advise the referring court on the criteria which, if applied, will enable it to classify the products concerned correctly in the CN, rather than to carry out such classification itself. That classification results from a purely factual assessment which it is not for the Court to make in the context of a reference for a preliminary ruling (judgment of 15 June 2023, NOVA TARGOVSKA KOMPANIA 2004, C‑292/22, EU:C:2023:492, paragraph 33 and the case-law cited).

26      Consequently, it is for the referring court to classify the goods concerned in the light of the answers given by the Court of Justice to the questions referred (judgment of 15 June 2023, NOVA TARGOVSKA KOMPANIA 2004, C‑292/22, EU:C:2023:492, paragraph 34 and the case-law cited).

27      Furthermore, it must be stated that, according to settled case-law, in the procedure laid down by Article 267 TFEU, providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the referring court with an answer which will be of use to it and enable it to determine the case before it. In that light, the Court may have to reformulate the questions referred to it (judgment of 15 June 2023, NOVA TARGOVSKA KOMPANIA 2004, C‑292/22, EU:C:2023:492, paragraph 35 and the case-law cited).

28      In the present case, it is apparent from the order for reference that, in the context of the production process for the product at issue, refined fish oil, which takes the form of triglycerides, is transformed, by esterification, into fish oil in the form of ethyl esters. The referring court explains, in that regard, that the difference between those two oils relates to the type of alcohol attached to the fatty acids. In the composition of an ethyl ester, the alcohol used is ethanol, whereas, in the composition of a triglyceride, the alcohol used is glycerol. That court notes also that the parties to the main proceedings agree on the classification of fish oil in the form of triglycerides under heading 1516 of the CN.

29      In that context, the referring court, by its first to fourth questions, asks the Court of Justice about the interpretation to be given to heading 1516 of the CN for the purposes of the tariff classification of fish oil in the form of ethyl esters, obtained by esterification of fatty acids with ethanol, and, by its fifth question, asks the Court of Justice whether, in the light of the interpretation to be given to that heading, Implementing Regulation 2019/1661 is valid.

 The first to fourth questions

30      By the first to fourth questions, which it is appropriate to examine together, the referring court asks, in essence, whether heading 1516 of the CN must be interpreted as covering fish oil in the form of ethyl esters, obtained by esterification of fatty acids with ethanol.

31      It should be borne in mind that, according to General rule 1 for the interpretation of the CN, the tariff classification of goods in the CN is to be determined according to the terms of the headings and any relative section or chapter notes, the titles of sections, chapters and subchapters being provided for ease of reference only. In the interests of legal certainty and ease of verification, the decisive criterion for the classification of goods for customs purposes is in general to be sought in their objective characteristics and properties as defined in the wording of the relevant heading of that nomenclature and of the notes to the sections or chapters (judgment of 5 September 2024, BIOR, C‑344/23, EU:C:2024:696, paragraph 65 and the case-law cited).

32      According to the wording of heading 1516 of the CN, that heading includes ‘animal or vegetable fats and oils and their fractions, partly or wholly hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not further prepared’. As the Commission has stated, that wording implies that the products coming under that heading may be considered to be fats or oils or fractions of those fats or of those oils.

33      In that regard, it must be noted that neither the CN nor its explanatory notes define the terms ‘fats and oils’.

34      In that respect, it should be borne in mind that, according to settled case-law, the meaning and scope of terms for which EU law provides no definition must be determined according to their meaning in everyday language whilst considering the context in which they occur and the purposes of the rules of which they form part (judgment of 25 May 2023, Danish Fluid System Technologies, C‑368/22, EU:C:2023:427, paragraph 40 and the case-law cited).

35      As regards the meaning in everyday language of the words ‘fats and oils’, it is apparent from several dictionaries that, in French, German and English, those terms are commonly defined as fatty substances, of animal or vegetable origin, composed mainly of glycerides, namely esters formed from glycerol and fatty acids.

36      That definition is, moreover, borne out by the Explanatory Notes published by the WCO relating to Chapter 15 of the HS. Those explanatory notes state that, ‘with the exception of sperm oil and jojoba oil, animal, vegetable or microbial fats and oils are esters of glycerol with fatty acids’.

37      In that regard, it must be noted that the Court has repeatedly held that, although the Explanatory Notes to the HS do not have binding force, they are an important means of ensuring the uniform application of the Common Customs Tariff and, as such, may be regarded as useful aids to its interpretation (judgment of 5 September 2024, BIOR, C‑344/23, EU:C:2024:696, paragraph 66 and the case-law cited).

38      It follows from the foregoing considerations that a characteristic specific to fats and oils is that they consist mainly of esters of glycerol and fatty acids, taking the form of triglycerides. Accordingly, a product which consists mainly of ethyl esters, which are synthetic esters obtained from ethanol and fatty acids, is not covered by heading 1516 of the CN.

39      In addition, the wording of that heading states that animal or vegetable fats and oils and their fractions may have been ‘partly or wholly hydrogenated, inter-esterified, re-esterified or elaidinised, whether or not refined, but not further prepared’. Thus, that heading includes animal, vegetable or microbial fats and oils which have undergone a particular chemical transformation of the kind referred to in that heading, but which have not been further prepared.

40      As regards the processes of inter-esterification and re-esterification of oils and fats, which are relevant in the case in the main proceedings, the Explanatory Notes published by the WCO relating to heading 1516 of the HS specify the nature of the chemical transformation achieved by means of those processes.

41      Thus, point 1 of Part B of those notes states, with regard to ‘inter-esterified (or trans-esterified) fats and oils’, that ‘the consistency of an oil or fat can be increased by suitable rearrangement of the fatty acid radicals in the triglycerides contained in the product. The necessary interaction and rearrangements of the esters is stimulated by the use of catalysts’.

42      As regards ‘re-esterified fats and oils (also called esterified fats and oils)’, point 2 of Part B of those notes states that they ‘are triglycerides obtained by direct synthesis from glycerol with mixtures of free fatty acids or acid oils from refining. The arrangement of the fatty acid radicals in the triglycerides is different from that normally found in natural oils’.

43      It therefore follows from those notes that the products resulting from those chemical processes still constitute triglycerides. Accordingly, in order to come under heading 1516 of the CN after having undergone such processes, those products must always meet the definition of ‘fats or oils’, as referred to in paragraph 38 above, and must therefore consist mainly of esters of glycerol and fatty acids, in the form of triglycerides. Consequently, a product which, after esterification, consists mainly of ethyl esters cannot come under that heading.

44      Moreover, that interpretation is borne out by the classification opinions adopted by the HS Committee at the 61^st session, held in March 2018. Thus, Classification Opinion 1516.10/1, approved by the WCO, states, as regards animal fats and oils and their fractions, that the product to be classified under heading 1516 of the HS consists, inter alia, of 90% re-esterified triglycerides of fatty acids. By contrast, in accordance with Classification Opinion 2106.90/36, approved by the WCO, a product consisting of fatty acid ethyl esters must be classified under heading 2106 of the HS.

45      In that regard, it should be borne in mind that, although the WCO opinions classifying goods in the HS do not have legally binding force, they amount, as regards the classification of those goods in the CN, to important aids to the interpretation of the scope of the various tariff headings of the CN (judgment of 16 November 2023, Viterra Hungary, C‑366/22, EU:C:2023:876, paragraph 35 and the case-law cited).

46      In the light of all the foregoing considerations, the answer to the first to fourth questions is that heading 1516 of the CN must be interpreted as not covering fish oil in the form of ethyl esters, obtained by esterification of fatty acids with ethanol.

 The fifth question

47      By the fifth question, the referring court asks, in essence, whether, in the light of the interpretation of heading 1516 of the CN, adopted in response to the first to fourth questions, Implementing Regulation 2019/1661 is to be regarded as valid.

48      In that regard, it is apparent from the order for reference that it is common ground in the dispute in the main proceedings that the properties of the product at issue are identical to those of the product described in column 1 of the table set out in the annex to that implementing regulation.

49      The Commission provided reasons for the classification under subheading 2106 90 92 of the CN of the product covered by that implementing regulation, stating, inter alia, that ‘classification under heading 1516 [of the CN] is excluded as the product consists mainly of ethyl esters obtained by esterification of fatty acids with ethanol and not with glycerol. The degree of processing that the product has undergone therefore exceeds what is permitted under heading 1516 as only re-esterified triglycerides are covered by that heading’. That implementing regulation refers, in that regard, to the Explanatory Notes published by the WCO relating to heading 1516 of the HS, part (B), point 2.

50      In addition, Implementing Regulation 2019/1661 states that ‘fatty acid ethyl esters are not animal or vegetable fats and oils’, and refers, in that regard, to the Explanatory Notes published by the WCO relating to Chapter 15 of the HS, General, part (A), second paragraph.

51      In view of the answer given to the first to fourth questions, the reasons relating to the classification of the product covered by that implementing regulation and that classification in itself are therefore consistent with the interpretation to be given to heading 1516 of the CN.

52      It follows that, by adopting that implementing regulation, the Commission altered neither the content nor the scope of that heading, and, therefore, did not exceed its powers.

53      Consequently, the answer to the fifth question is that examination of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Implementing Regulation 2019/1661.

 Costs

54      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Sixth Chamber) hereby rules:

1.      Heading 1516 of the Combined Nomenclature set out in Annex I to Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff, in the version resulting from Commission Implementing Regulation (EU) 2018/1602 of 11 October 2018,

must be interpreted as not covering fish oil in the form of ethyl esters, obtained by esterification of fatty acids with ethanol.

2.      The examination of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Commission Implementing Regulation (EU) 2019/1661 of 24 September 2019 concerning the classification of certain goods in the Combined Nomenclature.

[Signatures]

*      Language of the case: Dutch.

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