JUDGMENT OF THE COURT (Seventh Chamber)
11 March 2020 (*)
(Reference for a preliminary ruling – Common Customs Tariff – Combined Nomenclature – Tariff classification – Heading 8901 – Ship hulls – Maritime navigation – Vessels, designed as seagoing – Meaning)
In Case C‑192/19,
REQUEST for a preliminary ruling under Article 267 TFEU from the Gerechtshof Amsterdam (Court of Appeal, Amsterdam, Netherlands), made by decision of 12 February 2019, received at the Court on 27 February 2019, in the proceedings
Rensen Shipbuilding BV
Other party:
Inspecteur van de Belastingdienst/Douane district Rotterdam,
THE COURT (Seventh Chamber),
composed of P.G. Xuereb, President of the Chamber, T. von Danwitz and A. Kumin (Rapporteur), Judges,
Advocate General: G. Pitruzzella,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
– Rensen Shipbuilding BV, by B.J.B. Boersma, advocaat,
– the Netherlands Government, by M. Bulterman and J.M. Hoogveld, acting as Agents,
– the European Commission, by A. Caeiros and P. Vanden Heede and by M. Salyková, 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 the interpretation of Additional note 1 to Chapter 89 of the Combined Nomenclature 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 Regulation (EC) No 1031/2008 of 19 September 2008 (OJ 2008 L 291, p. 1); (‘the CN’).
2 The request has been made in proceedings between Rensen Shipbuilding BV and the Inspecteur van de Belastingdienst/Douane district Rotterdam (Tax and Customs Inspector of the district of Rotterdam, Netherlands) concerning the tariff classification of ship hulls.
Legal context
The CN
3 The CN, introduced by Regulation No 2658/87, is based on the Harmonised Commodity Description and Coding System, drawn up by the Customs Cooperation Council, now the World Customs Organisation (WCO), and established by the International Convention on the Harmonised Commodity Description and Coding System, concluded in Brussels on 14 June 1983. That convention, and the Protocol of Amendment thereto of 24 June 1986, was approved on behalf of the European Economic Community by Council Decision 87/369/EEC of 7 April 1987 (OJ 1987 L 198, p. 1).
4 Part Two of the CN, entitled ‘Schedule of Customs Duties’, includes Section IV, of which, inter alia, Chapter 89, entitled ‘Ships, boats and floating structures’, forms part.
5 Chapter 89 of the CN includes heading 8901, which is worded as follows:
‘8901 Cruise ships, excursion boats, ferry-boats, cargo ships, barges and similar vessels for the transport of persons or goods’.
6 Heading 8901 of Chapter 89 includes the following subheadings:
… | … |
8901 20 | - Tankers: |
8901 20 10 | ‐ ‐ Seagoing |
8901 20 90 | ‐ ‐ Other |
… | … |
8901 90 | ‐ Other vessels for the transport of goods and other vessels for the transport of both persons and goods: |
8901 90 10 | ‐ ‐ Seagoing |
| – – Other: |
8901 90 91 | – – – Not mechanically propelled |
8901 90 99 | – – – Mechanically propelled |
… | … |
7 Note 1 to Chapter 89 of the CN states:
‘A hull, an unfinished or incomplete vessel, assembled, unassembled or disassembled, or a complete vessel unassembled or disassembled, is to be classified in heading 8906 if it does not have the essential character of a vessel of a particular kind.’
8 Additional note 1 to Chapter 89 provides:
‘Subheadings … 8901 20 10, … 8901 90 10 … are to be taken to apply only to vessels, designed as seagoing, having a hull of an overall length (excluding any projecting parts) of not less than 12 m. However, fishing boats and lifeboats, designed as seagoing, shall be considered as seagoing vessels regardless of their length.’
The CN Explanatory Notes
9 Pursuant to Article 9(1) of Regulation No 2658/87, the European Commission is to adopt explanatory notes to the CN (‘the Explanatory Notes to the CN’).
10 The Explanatory Notes to the CN, as published in the Official Journal of the European Union on 30 May 2008 (OJ 2008 C 133, p. 1), are worded as follows with regard to Additional note 1 to Chapter 89 of the CN:
‘The expression “vessels, designed as seagoing” means vessels which, by reason of their construction and equipment, are capable of operating at sea even in bad weather (winds of about force 7 on the Beaufort scale). Such vessels are generally fitted with watertight decks and weatherproof superstructures.
…
The expression “seagoing vessels” means ships and hovercraft which satisfy the above conditions, whether or not they are actually used mainly in coastal waters, in estuaries or on lakes, etc.
…’
The dispute in the main proceedings and the question referred for a preliminary ruling
11 During the months of May and September 2009 Rensen Shipbuilding made a declaration for customs purposes under subheading 8901 90 10 of the CN, applicable to seagoing vessels for the transport of goods, in relation to 27 hulls from China.
12 Following a customs inspection carried out in March 2012, the Inspector of the Tax and Customs Office of the district of Rotterdam concluded, on the basis of certain commercial documents and certificates discovered among the accounting records of that company, that the declared goods had to be regarded as ship hulls intended for the construction not of seagoing vessels but of inland vessels. Thus, the ship hulls concerned were classified, respectively, under subheading 8901 20 90 of the CN, as tankers other than seagoing tankers, and under subheadings 8901 90 91 and 8901 90 99 of the CN, as other vessels for the transport of goods and other vessels for the transport of both persons and goods, mechanically propelled and not mechanically propelled, other than seagoing vessels. Consequently, a demand for payment was issued to the applicant on 27 April 2012.
13 Hearing the subsequent dispute, the Gerechtshof Amsterdam (Court of Appeal, Amsterdam, Netherlands) upheld, by judgment of 11 June 2015, the judgment at first instance declaring the action brought by Rensen Shipbuilding to be unfounded.
14 By judgment of 30 June 2017, the Hoge Raad der Nederlanden (Supreme Court, the Netherlands) set aside the judgment of the Gerechtshof Amsterdam (Court of Appeal, Amsterdam).
15 As the case is pending again before the Gerechtshof Amsterdam (Court of Appeal, Amsterdam), that court states that, at this stage of the proceedings, the dispute solely relates to whether the ship hulls at issue should be categorised as seagoing vessels under sub-headings 8901 20 10 and 8901 90 10 of the CN, or not as seagoing vessels, under subheadings 8901 20 90, 8901 90 91 and 8901 90 99 of the CN. In the present case, those ship hulls are likely to be categorised respectively under those last three subheadings, due to the fact that they can be used as hulls for navigation on inland waterways. If it were established that those hulls may also be used as hulls for vessels, designed as seagoing, they would have to be categorised as such.
16 According to that court, although it is common ground that the hulls of the vessels concerned cannot be used as the hull of a vessel able to cross the oceans at full load in the event of bad weather, the parties to the main proceedings remain divided as to the distance which a vessel must be able to cover from the shore for it to be regarded as a seagoing vessel. In that regard, Rensen Shipbuilding has claimed primarily that the hulls of the vessels concerned can be used as hulls of such vessels, on the ground that they can sail at sea once their construction has been completed. According to expert statements, vessels having the dimensions of those vessels’ hulls should be able to sail approximately 21 nautical miles (approximately 38 kilometres) from the shore in the event of bad weather.
17 In so far as Additional note 1 to Chapter 89 of the CN provides that only vessels designed ‘as seagoing’ fall within, inter alia, subheadings 8901 20 10 and 8901 90 10 of the CN, the Gerechtshof Amsterdam (Court of Appeal, Amsterdam) asks what is to be understood by those expressions. It observes, in that context, that it could be inferred from the wording of the Commission’s explanatory note relating to that Additional note 1 that coastal waters, estuaries and lakes do not fall within the concept of ‘seagoing’. However, in the absence of a definition of the term ‘coastal waters’, the distance which a vessel must travel in order to be ‘seagoing’ is always imprecise.
18 That court adds that, in the light of the Commission’s explanatory note, according to which ‘the expression “vessels, designed as seagoing” means vessels which, by reason of their construction and equipment, are capable of operating at sea even in bad weather (winds of about force 7 on the Beaufort scale)’, it is conceivable that it is not the distance between the vessel and the coast which matters, but solely the possibility that the latter is seagoing in bad weather. However, distance from the coast increases the effects of bad weather, in particular because of the increasing height of waves. In addition, even if the concept of ‘seagoing’ were disregarded and even if it were necessary only to ascertain whether a vessel, having regard to its construction and equipment, is capable of operating at sea in winds of force 7 on the Beaufort scale, it is important to know from what distance from the coast a vessel must be able to operate in those circumstances in order to be classified as a ‘seagoing vessel’ within the meaning of Chapter 89 of the CN.
19 In those circumstances the Gerechtshof Amsterdam (Court of Appeal, Amsterdam) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Additional note 1 to Chapter 89 of the [CN] provides that (inter alia) the CN subheadings 8901 and 10, entitled ‘Seagoing’, are to be taken to apply only to vessels that are designed as seagoing. What should be understood by the term ‘seagoing’ in this context?’
Consideration of the question referred
20 As a preliminary point, it should be noted that the dispute in the main proceedings concerns the question whether the ship hulls of the vessels concerned should be classified under the subheadings of the CN concerning ‘seagoing’ vessels, that is to say, depending on the nature of those vessels’ hulls, under subheadings 8901 20 10 and 8901 90 10, or under subheadings applicable to ‘other’ vessels, namely under subheadings 8901 20 90, 8901 90 91 and 8901 90 99.
21 In the first place, it must be borne in mind that, in accordance with Note 1 to Chapter 89 of the CN, where there is no doubt about the type of vessel to which the hulls of vessels relate, they are to be classified under the subheadings applicable to those vessels.
22 In the second place, according to the Court’s settled case-law, 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 the CN and of the notes relating to the sections or chapters (judgment of 19 December 2019, Amoena, C‑677/18, EU:C:2019:1142, paragraph 40 and the case-law cited).
23 Those objective characteristics and properties of products must be capable of being assessed at the time of customs clearance (judgment of 19 December 2019, Amoena, C‑677/18, EU:C:2019:1142, paragraph 41 and the case-law cited).
24 As the Commission has pointed out, in the absence of additional factual information about the ship hulls at issue in the main proceedings, it must be assumed that, in the present case, the objective characteristics and properties, on the basis of which those hulls must be classified, respectively, under subheading 8901 20 of the CN as tankers, and under subheading 8901 90 of the CN, as other vessels for the transport of goods and other vessels for the transport of both persons and goods, were already present at the time of clearance, and therefore, that those hulls are not identical, which is for the referring court to determine.
25 That being said, it should be observed as a preliminary point that, according to the Court’s 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 national court with an answer which will be of use to it and enable it to determine the case before it. With this in mind, the Court may have to reformulate the questions referred to it (judgment of 16 February 2017, Aramex Nederland, C‑145/16, EU:C:2017:130, paragraph 19 and the case-law cited).
26 In that regard, it is apparent from the information provided by the referring court, first, that the goods at issue in the main proceedings cannot be used as the hulls of vessels which make it possible to cross the oceans at full load in the event of bad weather. Second, according to the expert reports produced by Rensen Shipbuilding, the vessels having the dimensions of the goods concerned had to be able to sail at approximately 21 nautical miles from the coast in the event of bad weather.
27 Thus, in order to resolve the dispute before it, the question of whether ‘seagoing vessels’ in Additional note 1 to Chapter 89 of the CN covers vessels which can sail at approximately 21 nautical miles from the coast in the event of bad weather is relevant.
28 For the purposes of answering that question, it should be borne in mind that it is apparent from that Additional note that only vessels which are (i) designed as seagoing and (ii) whose hull overall length (excluding any projecting parts) is not less than 12 m come within the subheadings relating to seagoing vessels, although that second condition is not relevant in the present case.
29 As regards the wording of that Additional note, the use of the word ‘designed’ implies that it is the design and not the use of the vessel in question, which is decisive. Thus, a vessel within the meaning of a ‘vessel’ in that Additional note, means a vessel which, because of the characteristics inherent in its construction, is able to be ‘seagoing’, irrespective of the fact that it is not actually used in that capacity.
30 As regards, in particular, the expression ‘seagoing’, the language versions of Additional note 1 to Chapter 89 of the CN differ. Whereas, in particular, the French version (‘tenir la haute mer’) and Dutch version (‘vaart in volle zee’) refer to the ‘high seas’, the German (‘seetüchtig’) and English (‘seagoing’) versions refer simply to the ‘sea’.
31 Despite those differences, it may be inferred from all the language versions of Additional note 1 to Chapter 89 of the CN that vessels, in order to be regarded as coming within that provision, must be able to sail, in general, anywhere at sea, including on the high seas.
32 On the other hand, a vessel which, owing to the properties inherent in its construction, is able to sail only in a specific area off the coast cannot be regarded as being designed to be ‘seagoing’.
33 That interpretation is supported by the scheme of Chapter 89 of the CN, since that chapter contains specific subheadings corresponding to ‘seagoing’ vessels, on the one hand, and ‘other’ vessels, on the other, since the latter subheadings relate, a contrario, to non-seagoing vessels, that is to say those which navigate on inland waterways, such as rivers and lakes.
34 As the Netherlands Government has pointed out, the distinction between seagoing vessels and vessels for navigation on inland waterways would cease to be relevant if all inland waterway vessels were to be regarded as seagoing vessels on the ground that they are technically able to sail a few nautical miles off the coast.
35 That interpretation is also supported by the explanatory notes to the CN, which, although not legally binding, are an important aid to interpretation of the various customs headings (see judgment of 5 September 2019, TDK-Lambda Germany, C‑559/18, EU:C:2019:667, point 26 and the case-law cited).
36 It is apparent from the explanatory notes relating to Additional note 1 to Chapter 89 of the CN that ‘vessels, designed as seagoing’ are ‘vessels which, by reason of their construction and equipment, are capable of operating at sea even in bad weather (winds of about force 7 on the Beaufort scale)’. It is true that the fact that those explanatory notes refer to the capability of operating ‘at sea’ allows an interpretation to the effect that it may be sufficient that the vessel at issue is able to sail somewhere at sea, if only in the vicinity of the coast. Yet, if that had been the interpretation envisaged by those explanatory notes, it would not have been necessary to add, in those explanatory notes, that ‘vessels, designed as seagoing’ include those which meet stated conditions, but which are used mainly in coastal waters, in estuaries or on lakes.
37 It follows that vessels which are able to sail some nautical miles off the coast at most in the case of bad weather cannot be regarded as ‘vessels, designed as seagoing’ within the meaning of Additional note 1 to Chapter 89 of the CN and, therefore, do not fall within the subheadings of ‘seagoing vessels’.
38 In the light of all the foregoing considerations, the answer to the question referred is that Additional note 1 to Chapter 89 of the CN must be interpreted as meaning that vessels which, because of the properties inherent in their construction, are able to sail only about 21 nautical miles off the coast in the event of bad weather do not come within the concept of ‘vessels, designed as seagoing’ in that Additional note.
Costs
39 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national 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 (Seventh Chamber) hereby rules:
Additional note 1 to Chapter 89 of the Combined Nomenclature 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 Regulation (EC) No 1031/2008 of 19 September 2008, must be interpreted as meaning that vessels which, because of the properties inherent in their construction, are able to sail only about 21 nautical miles off the coast in the event of bad weather do not come within the concept of ‘vessels, designed as seagoing’ in that Additional note.
[Signatures]