Classification of parts of fish
C-56/08 Pärlitigu OU v Maksu-ja Tolliameti Pohja maksu – ja tollikeskus
The ECJ has recently been particularly active in the sphere of customs law (See for example article “Liability of Importers due to administrative and declarative errors by non-EU Customs Authorities”
In the case of Pärlitigu, the ECJ was faced with a classification issue concerned with parts of fish and an existing Anti-Dumping Duty.
On January 19 2006 Pärlitigu purchased a large quantity of frozen backbones of farmed Atlantic salmon from Norway. On 23 January 2006, Pärlitigu imported the goods into Estonia as “fish waste” under CN heading 0511.91.10(Products of fish or crustaceans, molluscs or other aquatic invertebrates; dead animals of Chapter 3: Other) onwhich no duty was levied. The Estonian authorities accepted this declaration and the goods were placed into free circulation.
On 25 January 2006, Pärlitigu sold the same goods to a third party. On 23 March 2006, the Estonian Customs authorities carried out an inspection at the warehouse of the third party and took a sample of the goods in question to determine whether the correct CN code had been declared. The subsequent analysis showed that the goods were fit for human consumption. In light of this conclusion, the authorities allocated a new CN code to the goods: 0303.22.00.15 (Atlantic Salmon: Other: Other) which was subject to Anti-Dumping Duties by virtue of EC Regulation No.85/2006 and presented Pärlitigu with a notice to pay the duties.
Pärlitigu appealed and the issue was referred to the ECJ which was asked:
(1) [Should the product in question be classified under CN code:]
(a) 05.11.91.10 “fish waste” or
(b) 0303.22.00.15 “Atlantic Salmon- other- other” and;
(2) If the answer to question 1 is (b), is the table in Article 1(5) [of Regulation No.85/2006] void as contrary to the principle of proportionality laid down in Article 5 [EC] in so far as, according to that table, the minimum import price established for frozen salmon backbones is higher than the minimum import price for whole fish and gutted head-on fish?
The first question
The ECJ reiterated that 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 in the section or chapter notes. The Court noted that the goods at issue were not expressly referred to either in the wording of the CN headings in question or in the section or chapter notes thereto.
The Court noted that note 1© to Chapter 3 of Part Two, Section I of the CN stated that that chapter does not cover fish unsuitable for human consumption by reason of either their species or their condition. The Court argued that under these circumstances, the determinant question is whether at the time that they were cleared through Customs, the frozen backbones of Atlantic salmon, obtained after filleting the fish were fit for human consumption?
The applicant argued that the structure of Chapter 3 of Part Two, Section I of the CN concerned fish of which parts or the products thereof could still be used as whole fish or the essential parts of fish. They argued that fish backbones did not meet those requirements because they no longer had the essential properties and characteristics that made it possible, on an objective basis and in light of economic considerations to classify them under a subheading in Chapter 3.
The ECJ dismissed this argument. It found that the classification of the goods at issue had to be based on the objective characteristics and properties of those goods. It argued that having regard to the objective characteristics and properties defined by the wording of the subheadings and notes to Chapter 3 of Part Two, Section I of the CN, it was obvious, that in regard to those goods, the decisive factor in classifying them lies in the fact that they are fit for human consumption and as such it argued that the backbones should be classified under CN 0303.22.00 as the goods were fit for human consumption at time of import.
The second question
The ECJ agreed in part with the second argument that the fish parts attracted a higher import price as such under TARIC code 0303.22.00.15 than whole fish but pointed to EC Regulation No.319/2009 which entered into force on 16 April 2009. Salmon backbones and farmed salmon as defined in EC Regulation No 85/2006 are two different products because they are not interchangeable and do not compete with one another on the EC market.
Consequently, the new regulation now provides that salmon backbones, composed of a fishbone partly covered with flesh, being an edible by-product of the fishing industry and falling within CN codes ex 0302.12.00, ex0303.11.00, ex 0303.19.00, ex 0303.22.00, are not covered by the definitive Anti-Dumping Duty imposed by Regulation No 85/2006 provided that the flesh attached to the backbone represents no more that 40% of the salmon backbone weight. The new regulation also provided that this was to apply retroactively from 21 January 2006.
In the present case, the flesh attached to the backbone did not exceed 24% of the salmon backbone weight. Having regard to that established fact, it is clear that, by virtue of Regulation No 319/2009, those goods are deemed never to have come within the scope of the antidumping duty introduced by Regulation No 85/2006.
In conclusion, the importer lost on the classification issue which gave rise to an additional customs duty of 2%, but was successful in arguing against the imposition of Anti-dumping duty.