The ECJ, on 6th February 2014, answered pre-judicial questions raised by a French court regarding rule 2a of the Combined Nomenclature which prevents importers or manufacturers to split the importation of their products in several parts to save customs duties, where the commercial effect is really importing the product as a whole.
Humeau Beaupreau SAS was a shoe manufacturer in France and imported sports shoes from China. The components imported separately but in identical amounts included uppers, outer soles, inner soles and laces. The French authorities deemed that importations should be classified as unassembled sports footware under tariff 6404 11 00 whose corresponding duty rate was much higher than those of the four separate parts. The French view was that the post importation “roughening” work did not qualify as “processing” but merely as “assembly” and the duty rate for un-assembled products should apply.
The ECJ pointed out that according to the first sentence of general rule 2a, including a certain good in a tariff code does also include that good in an unfinished or incomplete state as long as it has the essential character of the complete or finished item. The ECJ observed that the character of the shoe is mainly the combination of the upper and outer sole since these are the largest components of what goes to make a complete product. These components enclose and protect the user’s feet and provide the main functions of a shoe. Therefore, the import of an upper, outer sole and inner sole should be considered as a product with the essential characteristics of a “shoe”.
There are some important unanswered questions following the ECJ decision. The ECJ only mentioned that the components were imported in the same quantities. It did not address the question whether the decision would be different if the goods were imported at quite different times, at different places and entered on different customs declarations. It remains to be seen how the individual member states interpret this judgement of the ECJ.