University of Hamburg v Hauptzollamt München-West (236/83)

Contents

In Case 236/83REFERENCE to the Court under Article 177 of the EEC Treaty by the Finanzgericht München [Finance Court, Munich] for a preliminary ruling in the action pending before that court betweenUniversity of HamburgandHauptzollamt München-West [Principal Customs Office, Munich-West],THE COURT (Second Chamber)composed of: O. Due, President of Chamber, P. Pescatore and K. Bahlmann, Judges,Advocate General: P. VerLoren van ThemaatRegistrar: D. Louterman, Administratorgives the following

Judgment

Facts and Issues

The facts of the case, the course of the procedure and the observations submitted pursuant to Article 20 of the Protocol on the Statute of the Court of Justice of the EEC may be summarized as follows:

I —Facts and written procedure

1. On 23 September 1977 the University of Hamburg presented to the Hauptzollamt München-West for release into free circulation in the Community two precision rotors and a multiple contact switch unit imported from the United States of America and intended for incorporation into a model E analytical ultracentrifuge which was being manufactured by the firm of Beckmann in Hannover.The ultracentrifuge is designed to analyse molecular weight distribution in synthetic and natural polymers. It is composed essentially of the following parts:(a) The centrifuge itself, consisting of the propulsion mechanism (“drive”), comprising an electric motor with transmission and instruments for measuring and regulating the speed, and the rotor chamber with rotor;(b) A system for cooling (refrigeration unit) and heating (resistance wire) the rotor chamber and for measuring and regulating the temperature;(c) Oil and diffusion pumps for emptying the rotor chamber;(d) Two optical systems (an ultra-violet optical system and a Schlieren/Interference optical system) comprising light sources, lenses and other optical components as well as photographic and electronic apparatus, including the multiple contact switch unit.The rotors are made of titanium, a light, highly resistant material, and are specially shaped so as to stabilize rotation and prevent vortical movement. The bases of the rotors are fitted with a thermistor needle for measuring the temperature in the rotor. Variations in the resistance of the needle produced by fluctuations in temperature are transmitted to the regulating mechanism through a small container of mercury in the rotor chamber in order to maintain a constant temperature in the rotor's armour-plated chamber. Measuring cells (sensors) are inserted in slots containing solutions of the materials for analysis; each rotor is equipped with either two or four slots.The multiple contact switch unit consists essentially of a large number of electrical and electronic components.As a result of the extremely fast acceleration of the rotor (up to 68000 revolutions per minute), the measuring cells (sensors) themselves accelerate by up to 200000 times the speed of gravitational acceleration. Under the influence of the huge gravitational field, the separated molecules drift towards the base of the apparatus. The speed at which the molecules travel varies according to their nature and they are thus separated. By measuring those processes it is possible to ascertain molecular weight distribution. Optical systems are used to project a beam of light through the measuring cells and measure, with the aid of a large number of subsidiary components, the optical difference in the refractive index of the solution of the substances for analysis and of the solvent. Those measurements are recorded on a photo-sensitive plate and it is thus possible to ascertain the different speeds at which the molecules travel by means of a large number of exposures. At the same time the optical signals are recorded on paper in the form of a graph with the aid of other equipment. The multiple contact switch unit makes it possible to select certain measuring cells and phases during the process.By decision of 26 September 1977, the Hauptzollamt admitted free of customs duty the rotors and the multiple contact switch unit imported by the University of Hamburg.On the strength of an examination conducted by the Zolltechnische Prüflings- und Lehranstalt München [Customs Laboratory and Training College, Munich], the Hauptzollamt served a notice of reassessment dated 8 November 1979 on the University of Hamburg demanding payment of customs duty of DM 1458,50 for the rotors and of DM 2345,20 for the multiple contact switch unit, in addition to the proportionate import turnover tax payable thereon of DM 418,30.That decision was justified by the consideration that the rotors and the multiple contact switch unit were not in themselves of a scientific character and, therefore, could not be admitted free of duty under Article 3 (1) of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975, L 184, p. 1). Article 3 (2) of that Regulation was also inapplicable, in the Hauptzollamťs view, on the ground that components, spare parts and accessories required for the operation of scientific instruments and apparatus could be admitted free of duty only if the principal item had also been imported free of duty, which had not been done in the present case.The University of Hamburg filed an objection which was dismissed and it then brought an action against the notice of reassessment of 8 November 1979 before the Finanzgericht München.The University of Hamburg contended essentially that the imported materials in themselves were, in the light of their objective characteristics, of a scientific character and that, moreover, it was wrong to make the duty-free admission of components, spare parts and accessories conditional on the principal apparatus being imported free of duty.Taking the view that the questions of interpretation raised by Article 3 (1) and (2), of Regulation No 1798/75 had to be resolved before it could give judgment in the case before it and that those questions were also relevant to several other cases pending before it, the Finanzgericht München, by order of its Third Senate of 6 October 1983, decided pursuant to Article 177 of the EEC Treaty to stay the proceedings pending a preliminary ruling by the Court of Justice on the following questions:I. How is Article 3 (1) of Regulation No 1798/75 of 10 July 1975 (in its original version) to be interpreted as regards the phrase “scientific instruments and apparatus”?1. Can it also include materials which are components, spare parts or accessories of a unit of equipment?If Question 1 is answered in the affirmative :2. Does the phrase “instruments and apparatus” include materials of all kinds or only those which are so designed that they can be used for performing a specific operation or for producing specific effects in relation to other materials? What other criteria, if any, are decisive for the definition of that phrase?3. In the case of materials which are components, spare parts or accessories of a unit of equipment, does the question whether they are instruments or apparatus depend on whether, in relation to that unit of equipment or its other components, they are(a) structurally autonomous (for example, they have their own casing, their own baseplate or the like) and/or(b) they perform an independent function?If Question 3 (a) is answered in the negative and Question 3 (b) is answered in the affirmative:(c) Where a component, spare part or accessory performs an independent function within a unit of equipment, is the decisive factor whether it is capable of working on its own, thus, in particular, whether in addition to the operative component itself, it also contains the propulsion mechanism therefor?4. Is the decisive factor as regards the scientific character of instruments and apparatus which are components of a unit of equipment, whether those instruments and apparatus, viewed in themselves, serve scientific purposes, particularly in the light of their own characteristics and the functions (or parts of functions) performed by them, or is their scientific character established by the mere fact that the unit of equipment of which they form part is scientific and that, since they are specific components of that unit, they can be employed only in conjunction with it and thus, like it, they are used mainly or exclusively for scientific research?II. How is Article 3 (2) of Regulation No 1798/75 to be interpreted?1. Does the phrase “required for the operation of scientific instruments and apparatus” mean that(a) the instruments and apparatus are incapable of functioning without the component, spare part or accessoiy concerned; or is the decisive factor whether(b) the components, spare parts or accessories arc specially made for or adapted to the instruments and apparatus concerned and are therefore components, spare parts or accessories specific to those instruments or apparatus?2. Does the phrase “which quality for duty-free admission” entail that the instruments and apparatus for the operation of which the components, spare parts or accessories are required:(a) are or were themselves imported, or is it sufficient that they(b) satisfy the requirements laid down for admission free of Common Customs Tariff duties, with the result that Article 3 (2) of Regulation No 1798/75 applies even where some of the components of the instruments and apparatus are imported from a non-member countiy and some are manufactured in the Community, provided that no instruments or apparatus of scientific value equivalent to that of the instruments and apparatus assembled from those components are manufactured in the Community?The order of the Finanzgericht München was lodged at the Court Registry on 20 October 1983.In accordance with Article 20 of the Protocol on the Statute of the Court of Justice of the EEC, written observations were submitted on 30 January 1984 by the Commission of the European Communities, represented by Jörn Sack, a member of its Legal Department.On hearing the report of the Judge-Rapporteur and the views of the Advocate General, the Court decided to open the oral procedure without any preparatory inquiry. It did, however, put a question to the Commission asking for a reply in writing which was duly furnished within the period prescribed.By order of 14 March 1984 the Court decided, pursuant to Article 95 (1) and (2) of its Rules of Procedure, to assign the case to the Second Chamber.

II —Written observations submitted to the Court

In the Commision's view, it would be useful if the Court's interpretation of Regulation No 1798/75 were as comprehensive as possible in view of the large number of questions raised by that Regulation.

(a)Question LI

Article 3 of Regulation No 1798/75 is based, from a structural point of view, in both its original version and as amended by Council Regulation (EEC) No 1027/79 of 8 May 1979 (Official Journal 1979, L 134, p. 1.), on a clear separation between instruments, apparatus and “Geräte” (the latter term — literally “devices” — appears in the German version but not in the English or French versions), on the one hand, and components, spare parts and accessories intended for such equipment, on the other. However, there is no difference in the effects of duty-free admission for components or accessories for scientific instruments and apparatus which themselves qualify for duty-free admission.Since they are treated in the same way, it is not usually necessary to distinguish the concept of “scientific instruments and apparatus” from that of “components, spare parts and accessories” of such equipment. The importation of components, spare parts or accessories free of duty is even simpler since they do not themselves need to be of a scientific character. The maxim that accessories follow the principal item is implicitly applied.The question whether components, spare parts or accessories may themselves be classified as scientific instruments or apparatus would arise only if the principal scientific instrument or apparatus is not admitted free of duty on the ground that apparatus of equivalent scientific value is manufactured in the Community whilst the components, spare parts or accessories are not.In order to answer the question raised it is necessary to ascertain whether “scientific instruments and apparatus” are to be distinguished from “components, spare parts and accessories” in conceptual terms or in terms of their function.A definition in conceptual terms is not only extremely problematic but may also ultimately lead to fine distinctions that cannot subsequently be applied in practice. The Commission, therefore, considers it appropriate to seek a definition in terms of function, which, in the present case, means that Question 1.1 should be answered in the negative.What is important, according to that approach, is not the structure of apparatus, or the manner in which it functions, but only the question whether it is to be used on its own, to be incorporated in other apparatus as a component or spare part or to be fitted on to other apparatus as an accessory. That may often be difficult to establish in practice but an abstract interpretation can do little to mitigate that difficulty. In the present case, there cannot in practical terms be any serious doubt that the rotors and the multiple contact switch unit are components or accessories of the high-speed centrifuge.A distinction between instruments and apparatus, on the one hand, and components, spare parts and accessories, on the other, purely in functional terms corresponds to the scheme of Regulation No 1798/75 and to the practical requirement that the provisions in question be as simple to apply as possible.The answer to Question 1.1 should therefore be as follows:Materials that are intended to serve as components, spare parts or accessories of a scientific instrument or apparatus must not be treated as scientific instruments or apparatus within the meaning of Article 3 of Regulation No 1798/75.The other questions raised under Question I thus become devoid of purpose.

(b)Questionili

The purpose of this question is essentially to ascertain whether Article 3 (2) of Regulation No 1798/75 in its original version is to be given an autonomous interpretation on the basis of its wording or whether it is to be interpreted in the light of the subsequent amendment by Regulation No 1027/79.From a purely theoretical point of view, interpretation of the original wording of that provision taken on its own would undoubtedly be highly desirable since, as far as the point at issue is concerned, the original text is drafted in much stricter terms than the later version. That would lead to unsatisfactoiy results, however. The more liberal rule in the new version of Article 3 (2) is therefore, as far as possible, to be regarded as already incorporated in the initial version of that provision. Accordingly, components, spare parts and accessories need not be indispensable to the operation of the principal instruments or apparatus. It is sufficient to establish that they have been specially made for the scientific instruments or apparatus in question. In the case of accessories, Article 12 of Commission Regulation (EEC) No 2784/79 of 12 December 1979 laying down provisions for the implementation of Council Regulation No 1798/75 (Official Journal 1979, L 318, p. 32) expressly provides for that solution. The interpretation thus suggested is also appropriate inasmuch as the high performance required of scientific apparatus can in most cases be achieved only by means of parts and accessories specially designed for such equipment.The answer to Question ILI should be as follows:Components, spare parts and accessories are required, within the meaning of Article 3 (2) of Regulation No 1798/75 in its original version, for the operation of scientific instruments and apparatus where they have been specially made for or adapted to such equipment.

(c)Question II. 2

This question is also concerned with the impact of the new version of Regulation No 1798/75 on the interpretation of the initial version.The German text of the original version is unclear. It may be understood as meaning that admission of components, spare parts and accessories free of duty is conditional on the principal apparatus actually being admitted free of duty. However, the French and English versions point to the opposite conclusion.Regulation No 1027/79 clarified the original version in all the languages by providing that the principal apparatus must actually have been imported. Article 3 (2) (a) covers cases where the components, spare parts and accessories are imported at the same time as the principal apparatus or subsequently. The obvious inference is that the principal apparatus must actually have been imported, whether before or at the same time as the importation of the components and accessories. The last part of that subparagraph (“or entitled to dutyfree entry”) must not be understood as providing for a third, quite separate, possibility. It merely expresses the idea that the importation of the principal apparatus free of duty must still be possible at the time of importation of the components and accessories.The above interpretation of Article 3 (2) of Regulation No 1798/75, reflecting the Commission's original intentions, is expressed in much clearer terms in Article 53 (a) of Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (Official Journal 1983, L 105, p. 1) which is applicable as from 1 July 1984. That provision leaves no room for doubt that it covers only cases where spare parts, components or accessories are imported at the same time as the principal instrument or apparatus or where the latter was imported beforehand. In the case of spare parts, components or accessories imported subsequently, the regulation once again distinguishes between two possibilities the second of which covers comparatively rare situations, in particular where the importer has not previously availed himself of the possibility of dutyfree admisson, although he was entitled to do so, or where comparable apparatus was at the time still being manufactured in the Community.The incorporation of such subsequent clarifications in the initial version, to the detriment of the importer, is of course open to criticism. It must however be borne in mind that the purpose of the provisions in question was to implement in Community law international conventions concluded under the auspices of Unesco, namely the Florence Agreement of 1950 on the Importation of Educational, Scientific and Cultural Materials and the 1976 Nairobi Protocol to that Agreement. The latter makes the importation of components, spare parts and accessories free of duty conditional upon the actual importation of the principal apparatus. The Community was not under any obligation to establish a more favourable system for imports, nor did it intend to do so, not least because of the lack of reciprocity. The decisive consideration is that the rules should be simple for the customs authorities to administer. It is difficult to ascertain whether an instrument or apparatus that has not been imported is of a scientific character.The argument that t_e transfer of some stages of production to the Community is “penalized” by the imposition of customs duty is not devoid of substance but its significance cannot be exaggerated since the burden represented by customs duty nowadays only rarely constitutes a reason for investment abroad and, conversely, permanent exemption from duty in the case of components of considerable value may be a reason for keeping production of such components, which is of the greatest scientific and technical importance, outside the Community.The answer to Question II.2 should be as follows :Article 3 (2) of Regulation No 1798/75 must be interpreted, also in its initial version, as meaning that components, spare parts and accessories may be imported free of customs duty only if the instruments and apparatus for which they are intended are, or already have been, imported as well.

III —Oral procedure

The Commission of the European Communities, represented by J. Sack, presented oral argument and answered questions put to it by the Court at the sitting on 17 May 1984.The Advocate General delivered his opinion at the sitting on 5 July 1984.

Decision

1By an order of 6 October 1983, which was received at the Court Registry on 20 October 1983, the Finanzgericht München [Finance Court, Munich] referred to the Court for a preliminary ruling under Article 177 of the EEC Treaty two sets of questions concerning the interpretation of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials (Official Journal 1975, L 184, p. 1) which was adopted pursuant to the “Florence Agreement” (Agreement of the Importation of Educational, Scientific and Cultural Materials, opened for signature at Lake Success, New York, on 22 November 1950, United Nations Treaty Series, Vol. 131, p. 27).

2It appears from the order for reference that on 23 September 1977 the University of Hamburg presented to the Hauptzollamt München-West for customs clearance two precision rotors and a multiple contact switch unit originating in the United States of America and intended for incorporation in an analytical ultracentrifuge constructed for the university by a firm in Hannover. The University of Hamburg applied for and was granted dutyfree admission in respect of those materials under Regulation No 1798/75.

3However, after reconsidering the matter, the Hauptzollamt took a different view and, by decision of 8 November 1979, demanded payment of customs duties. The Hauptzollamt considered that the rotors and the multiple contact switch unit, viewed in themselves, could not be regarded as scientific instruments or apparatus within the meaning of Article 3 (1) of Regulation No 1798/75. Nor, in its view, could they be regarded as components, spare parts or accessories (hereinafter referred to as “components” required for the operation of scientific instruments and apparatus within the meaning of Article 3 (2) of that Regulation.

4The University of Hamburg brought an action against that decision before the Finanzgericht. In support of its action, the University of Hamburg contended that the imported materials in themselves were, in the light of their objective characteristics, of a scientific character. Accordingly, as far as the exemption of those components was concerned, there was no reason to draw a distinction according to whether the principal apparatus was imported free of duty or, instead, was manufactured within the territory of the Community. The wording of Article 3 of Regulation No 1798/75 did not rule out such a solution.

5The Hauptzollamt disputed the scientific character of the components in question which, in the light of their construction, constituted specific components of a centrifuge and had no autonomous function independently of that performed by the centrifuge. Nor, in the Hauptzollamťs view, could those components be imported free of customs duty under Article 3 (2) of Regulation No 1798/75 since that provision granted exemption only in respect of components required for the operation of scientific instruments and apparatus which had themselves been imported free of duty. Therefore that provision could not apply to components which were intended to be incorporated in a unit of equipment constructed in the Communtiy.

6To enable it to decide that dispute, the Finanzgericht referred the following questions to the Court for a preliminary ruling:I. How is Article 3 (1) of Regulation No 1798/75 of 10 July 1975 (in its original version) to be interpreted as regards the phrase “scientific instruments and apparatus”?1. Can it also include materials which are components, spare parts or accessories of a unit of equipment?If Question 1 is answered in the affirmative:2. Does the phrase “instruments and apparatus” include materials of all kinds or only those which are so designed that they can be used for performing a specific operation or for producing specific effects in relation to other materials? What other criteria, if any, are decisive for the definition of that phrase?3. In the case of materials which are components, spare parts or accessories of a unit of equipment, does the question whether they are instruments or apparatus depend on whether, in relation to that unit of equipment or its other components, they are(a) structurally autonomous (for example, they have their own casing, their own baseplate or the like) and/or(b) they perform an independent function?If Question 3 (a) is answered in the negative and Question 3 (b) is answered in the affirmative :(c) Where a component, spare part or accessoiy performs an independent function within a unit of equipment, is the decisive factor whether it is capable of working on its own, thus, in particular, whether in addition to the operative component itself, it also contains the propulsion mechanism therefor?4. Is the decisive factor as regards the scientific character of instruments and apparatus which are components of a unit of equipment, whether those instruments and apparatus, viewed in themselves, serve scientific purposes, particularly in the light of their own characteristics and the functions (or parts of functions) performed by them, or is their scientific character established by the mere fact that the unit of equipment of which they form part is scientific and that, since they are specific components of that unit, they can be employed only in conjunction with it and thus, like it, they are used mainly or exclusively for scientific research?II. How is Article 3 (2) of Regulation No 1798/75 to be interpreted?1. Does the phrase “required for the operation of scientific instruments and apparatus” mean that(a) the instruments and apparatus are incapable of functioning without the component, spare part or accessoiy concerned; or is the decisive factor whether(b) the components, spare parts or accessories are specially made for or adapted to the instruments and apparatus concerned and are therefore components, spare parts or accessories specific to those instruments or apparatus?2. Does the phrase “which qualify for duty-free admission” entail that the instruments and apparatus for the operation of which the components, spare parts or accessories are required:(a) are or were themselves imported, or is it sufficient that they(b) satisfy the requirements laid down for admission free of Common Customs Tariff duties, with the result that Article 3 (2) of Regulation No 1798/75 applies even where some of the components of the instruments and apparatus are imported from a non-member country and some are manufactured in the Community, provided that no instruments or apparatus of scientific value equivalent to that of the instruments and apparatus assembled from those components are manufactured in the Community?

7Following a detailed analysis of the relevant facts and law, the Finanzgericht indicated that it was in favour of an interpretation that would allow the components in question to be admitted free of duty. It considered such a solution to be reasonable and in the interests of a rational international division of labour.

8The parties to the main action have not submitted any observations to the Court. The Commission has submitted to the Court observations which ultimately support the Hauptzollamťs point of view.

9As regards the first set of questions submitted by the Finanzgericht, the Commission contended that components which could not have any function other than that of being incorporated in a unit could not at the same time be described as scientific instruments or apparatus within the meaning of the regulation in question. In view of their nature, therefore, such components could not qualify as such for the exemption laid down for scientific instruments and apparatus. They could benefit from such exemption only if they satisfied the requirements of Article 3 (2) which were applicable to components.

10As regards the second set of questions, the Commission put forward two kinds of arguments. To begin with, it drew attention to the fact that Regulation No 1798/75 was subsequently amended on two occasions. First it was amended by Council Regulation (EEC) No 1027/79 of 8 May 1979 (Official Journal 1979, L 134, p. 1) in order to take account of certain provisions of the Protocol adopted at the 19th General Conference of Unesco at Nairobi on 26 November 1976 amending and clarifying certain provisions of the Florence Agreement (Protocol registered with the United Nations under No 20669). It was clear from Annex D (ii) to that Protocol, which formed the basis for the amendment of Article 3 (2) by Regulation No 1027/79, that components were to be admitted free of duty only if they were intended for instruments or apparatus imported previously or at the same time. Article 53 (a) of Council Regulation (EEC) No 918/83 of 28 March 1983 setting up a Community system of reliefs from customs duty (Official Journal 1983, L 105, p. 1), which consolidated the legislation in force in this area, was similarly amended. The Commission took the view that, on grounds of reciprocity which, in its view, played an important role in international conventions, an interpretation should be adopted for the application of the legislative provision in force at the material time that was consistent with the Community's international obligations.

11Furthermore, the Commission contended that, for reasons based on customs procedure, duty-free admission should be confined to components intended for imported instruments and apparatus, in view of the fact that components qualified for exemption only if it was established by the customs authorities that the equipment in question qualified for duty-free admission, which was not possible in the case of equipment constructed within the Community.

12Paragraphs 1 and 2 of Article 3 of Regulation No 1798/75 read as follows:1. “Scientific instruments and apparatus not included in Article 2 imported exclusively for educational purposes or for pure scientific research may be admitted free of Common Customs Tariff duties provided:(a) they are intended for:either public establishments principally engaged in education or scientific research, including those departments of public establishments which are principally engaged in education or scientific research;or private scientific or educational establishments authorized by the competent authorities of the Member States to receive such articles duty free and provided:(b) instruments or apparatus or equivalent scientific value are not being manufactured in the Community.2. Subject to the production of satisfactory evidence, the duty-free admission referred to in paragraph 1 shall apply to the components, spare parts and accessories required for the operation of scientific instruments and apparatus which qualify for duty-free admission.”

13Annex D (ii) to the Nairobi Protocol, on which the subsequent amendments to Article 3 (2) are based, is worded as follows in the English and French versions, both of which are equally authentic:“Spare parts, components or accessories specifically matching scientific instruments or apparatus, provided these spare parts, components or accessories are imported at the same time as such instruments and apparatus, or if imported subsequently, that they are identifiable as intended for instruments or apparatus previously admitted duty-free or entitled to duty-free entry.”“Pièces de rechange, éléments ou accessoires spécifiques s'adaptant aux instruments ou appareils scientifiques, pour autant que ces pièces de rechange, éléments ou accessoires soient importés en même temps que ces instruments ou appareils ou, s'ils sont importés ultérieurement, qu'ils soient reconnaissables comme étant destinés à des instruments ou appareils admis précédemment en franchise ou susceptibles de bénéficier de la franchise.”

14Article 3 (2) of Regulation No 1798/75, as amended by Regulation No 1027/79, now reads as follows:“The duty-free admission referred to in paragraph 1 shall apply to :(a) spare parts, components or accessories specifically suitable for scientific instruments or apparatus, provided that these spare parts, components or accessories are imported at the same time as such instruments and apparatus, or, if imported subsequently, that they can be identified as being intended for instruments or apparatus previously admitted duty free or entitled to duty-free entry;...”

15That provision was in its turn replaced by Article 53 of Regulation No 918/83 which reads as follows:“The relief shall also apply to :(a) spare parts, components or accessories specifically suitable for scientific instruments or apparatus, provided that these spare parts, components or accessories are imported at the same time as such instruments and apparatus or, if imported subsequently, that they can be identified as being intended for instruments or apparatus:which have previously been admitted duty free, provided that such instruments or apparatus are still of a scientific nature at the time when relief is requested for the specific spare parts, components or accessories, orwhich would be entitled to relief at the time when such relief is requested for the specific spare parts, components or accessories.”

First set of questions (possibility of components being classified as scientific instruments or apparatus)

16These questions are directed to a distinction between the phrase “scientific instruments and apparatus” and the phrase “components, spare parts or accessories”. More particularly, the Finanzgericht wishes to ascertain whether such components may at the same time be classified as scientific instruments or apparatus and as such, qualify for duty-free admission independently of the unit for which they are intended. If so, the Finanzgericht asks what are the characteristics on the basis of which those components may be held to have the function of a scientific instrument or apparatus.

17As the Commission has rightly pointed out, components, spare parts and accessories are admitted free of duty if it is established that they are required for the operation of a scientific instrument or apparatus, without there being any need to establish that the components, spare parts and accessories themselves are of a scientific character. That classification therefore depends not on the nature of those components but on their connection with a scientific instrument or apparatus.

18There is nothing in the scheme of the regulation to prevent such a component from also being classified in its own right as a scientific instrument or apparatus within the meaning of Article 3 (1) of Regulation No 1798/75. In those circumstances, however, the component in question is admitted free of duty only if it satisfies all the requirements laid down by the Regulation for the duty-free admission of scientific instruments and apparatus. The classification of such a component therefore depends on the question whether, apart from the connection which it may have with another scientific unit of equipment, it is also capable of performing an independent scientific function and whether it satisfies in addition all the requirements of Article 3 (1) of the Regulation, particularly inasmuch as it must be particularly suitable for pure scientific research, as the Court emphasized in its judgment of 2 February 1978 in Case 72/77 Universiteitskliniek Utrecht [1978] ECR 189.

19The answer to the first set of questions must therefore be that paragraphs 1 and 2 of Article 3 of Regulation No 1798/75, considered in conjunction with one another, must be interpreted as meaning that the fact that materials can be regarded as components, spare parts or accessories of an installation or a complex unit of equipment for scientific research does not prevent them from being classified as scientific instruments or apparatus, if it is established that they are capable of performing an independent scientific function and if all the requirements of Article 3 (1) of the Regulation are satisfied.

20It is for the national court to make that determination in the light of all the relevant facts of the case.

Second set of questions (customs treatment of components intended for scientific installations constructed within the Community)

21If the materials in question cannot be classified as scientific instruments or apparatus within the meaning of the Regulation, the Finanzgericht seeks guidance on the question whether the duty-free admission provided for components, spare parts and accessories may also be granted where such materials are imported for incorporation in a scientific installation constructed within the Community or whether such duty-free admission is restricted to components intended for scientific instruments or apparatus which have themselves been imported. The answer to that question depends on the interpretation of the phrase ‘scientific instruments and apparatus which qualify for duty-free admission’ in Article 3 (2) of Regulation No 1798/75.

22In that regard, the arguments put forward by the Commission which are based on the Nairobi Protocol and on the subsequent amendments to the relevant legislation cannot be accepted. The customs treatment for the materials in question is determined by the legislation in force at the time of importation. That legislation cannot be altered by the provisions of subsequent conventions or legislation. Moreover, it should be observed that even the Nairobi Protocol and the legislation based thereon do not entirely dispel the doubts surrounding the question whether duty-free admission may be granted in respect of components intended for installations which, if they were imported, would qualify for duty-free admission.

23As regards the conclusions to be drawn from the manner in which the other contracting parties are likely to interpret the provisions of existing conventions, it is sufficient to recall what the Court stated in its jugdment of 26 October 1982 regarding the need to ensure that international agreements were interpreted objectively, regardless of considerations relating to reciprocity in the implementation of such agreements by other parties (Case 104/81 Hauptzollamt Mainz v Kupferberg [1982] ECR 3641, paragraph 18 of the decision). Moreover, it must be observed in that connection that the Commission has not submitted any information whatsoever on the manner in which the provision in question has actually been applied and interpreted by the other contracting parties to the Florence and Nairobi Agreements. Its observations seem to be based not on established facts but on assumptions regarding the intentions of the other contracting parties. The Commission's reasoning must therefore be rejected in its entirety.

24However, it is possible in the circumstances to derive certain indications which may be useful for the interpretation of the contested provision from the scheme of Regulation No 1798/75 and from certain considerations connected with the customs control procedure.

25In the first place, it is appropriate to draw attention to Article 2 of Regulation No 1798/75 which provides that educational, scientific and cultural materials may be admitted free of duty only when they are intended for certain research or teaching establishments. The application of that provision raises certain difficulties where the imported components are intended not directly for the scientific or educational institution concerned but for the manufacture of scientific equipment which is to be delivered subsequently to the institution concerned. Secondly, it is appropriate to point out that a scientific installation constructed in the Community falls outside the scope of customs law and may not therefore legally be classified as a scientific instrument or apparatus within the meaning of Regulation No 1798/75, particularly since duty-free admission may be granted only if it is established that instruments or apparatus of equivalent value are not being manufactured in the Community. It would appear therefore that the argument relied upon by the University of Hamburg amounts to classifying the principal installation as a scientific instrument or apparatus which qualifies for duty-free admission, not in its own right, since it is built in the Community, but exclusively by virtue of its connection with the imported components, spare parts or accessories. Regulation No 1798/75 does not provide any basis for such an interpretation which is a pure fiction and contrary to the system established by that Regulation.

26For all those reasons, it would appear that certain considerations relating to the scope and the scheme of Regulation No 1798/75 preclude the duty-free admission of components intended for incorporation in a scientific installation constructed in the Community.

27The industrial and commercial policy considerations referred to by the Finanzgericht in its order for reference do not stand in the way of a conclusion of that kind. As the Commission has pointed out, where it appears that Community industry is capable of constructing a scientific unit of equipment in its entirety, except for certain specific parts, the duty-free admission of high-value components may, far from promoting technological progress in the Community, instead constitute an incentive to keep outside the Community certain scientifically and technically important production facilities. In those circumstances, the refusal to admit the components in question free of duty may therefore act as a useful incentive to secure the transfer of such production to the Community.

28For those reasons, the answer to the second set of questions submitted by the Finanzgericht must be that the phrase ‘scientific instruments and apparatus which qualify for duty-free admission’ in Article 3 (2) of Regulation No 1798/75 must be interpreted as meaning that components, spare parts and accessories may be imported free of duty provided that they are intended for scientific instruments or apparatus which are, or have been, admitted free of duty. Duty-free admission may not, however, be granted where the components are intended to be incorporated in a scientific installation constructed in the Community.

Costs

29The costs incurred by the Commission of the European Communities, which has submitted observations to the Court, are not recoverable. As these proceedings are, in so far as the parties to the main action are concerned, in the nature of a step in the action pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,THE COURT (Second Chamber)in reply to the questions referred to it by the Finanzgericht München by order of 6 October 1983 hereby rules:

1.Paragraphs 1 and 2 of Article 3 of Regulation (EEC) No 1798/75 of the Council of 10 July 1975 on the importation free of Common Customs Tariff duties of educational, scientific and cultural materials, considered in conjunction with one another, must be interpreted as meaning that the fact that materials can be regarded as components, spare parts or accessories of an installation or a complex unit of equipment for scientific research does not prevent them from being classified as scientific instruments or apparatus, if it is established that they are capable of performing an independent scientific function and if all the requirements of Article 3 (1) of the regulation are satisfied.

2.The phrase ‘scientific instruments and apparatus which qualify for duty-free admission’ in Article 3 (2) of Regulation No 1798/75 must be interpreted as meaning that components, spare parts and accessories may be imported free of duty provided that they are intended for scientific instruments or apparatus which are, or have been, admitted free of duty. Duty-free admission may not, however, be granted where the components are intended to be incorporated in a scientific installation constructed in the Community.

Delivered in open court in Luxembourg on 15 November 1984.