Recently, the Court of Justice of the European Union issued a judgment relevant to the question of when there is a 'container' for the transport of goods. The judgment concerns a classification issue regarding the classification of a transport system.
The reason for this judgment was a request for a preliminary ruling regarding the classification of a carrier profile transport system ('TubeLock transport system'), developed by Global Gravity ApS, (hereinafter: GG). The system consists of a certain number of sets of aluminium support profiles between which the tubes to be transported are placed at right angles to each other, those support profiles being interconnected by two steel support rods equipped with eyelets, so that further tubes can then be placed on top according to the same process until the number of tubes to be transported is loaded, after which the loading is completed by attaching steel slings to the support rods at each of the four corners, in order to facilitate easy handling. The system is called "TubeLock" and is suitable for repeated use. At the time of entry, it is still in an unassembled state.
In February 2014, GG applied to the Danish tax authorities for a decision on binding tariff information (BTI) for the TubeLock system. TubeLock is described as a safe method of transporting pipes from a factory to customers (in this case: drilling rigs) by different means of transport (by road, rail or ship), avoiding repacking en route.
In August 2015, the Danish tax authorities issued a decision and classified TubeLock as a product made of aluminium under CN subheading 7616 99 90 (TARIC goods code 7616 99 90 99). As a result, the applicable customs rate was 6%.
GG objected to that classification to Denmark's highest administrative-tax authority. They argued that the TubeLock should have been classified as a container under CN subheading 8609 00 90 (TARIC commodity code 8609 00 90 00). In that case, no customs tariff would have to be paid. The objection body ruled in GG's favour. The Danish Ministry of Taxation then appealed against this administrative decision in court. The Danish judge then put questions to the Court of Justice of the European Union (hereinafter: Court) on the application and interpretation of European law.
The Danish court raises the question of what criteria determine whether a product is a 'container' within the meaning of CN subheading 8609 00 90.
The court recalls that under general rules for the interpretation of the CN, the wording of headings and the notes to sections or chapters determine the classification of goods. The explanatory notes are an important point of reference in this respect. The decisive criterion, in the interests of certainty and easy inspection, must be sought in the objective characteristics and properties.
With regard to the first condition, the Court notes that the term 'container' usually means a means of storage consisting of at least a bottom and side partitions, intended for the storage or transport of liquid or solid products. This description is supported by the HS Explanatory Notes. Indeed, there it is stated that the product must have a 'volume'. According to the Court, a system such as TubeLock, cannot be said to contain or enclose the tubes to be transported, but only secure them like a stirrup. As a result, it does not meet the objective characteristics and properties of a container. Therefore, TubeLock cannot be classified as a 'container' for the purpose of the applicable customs tariff.
What does this judgment teach us? First, it establishes the concept of 'container'. Secondly, the Court analyses whether the TubeLock system meets the concept of 'container' based on its objective features and characteristics. In other words, if it looks like a duck, walks like a duck and quacks like a duck, then it is a duck. Thus, the fact that a product has a particular purpose in mind that is similar to products with which it is not very similar externally is of secondary importance.
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