Interpreting the Customs Tariffs (TARIC)

The tariff is interpreted as a legal instrument. The courts interpret the Code in a broadly similar manner to the interpretation of legal documents and legislation generally. The context and objective of regulations are given effect.

The general approach of the courts emphasise the various explanatory notes and official opinions. The basic rule of classification is based on the objective properties and characteristics of the goods in question.

In the interests of legal certainty and ease of verification, the decisive criteria for customs classification are the objective characteristics and properties as defined by the wording at headings in the customs tariff and the notes to them.

Factors in Interpretation I

The notes preceding the chapters of the common customs tariff and explanatory notes by the Customs Cooperation Council are a means for ensuring the uniform application. They are an important aid to the interpretation of the scope of the various headings. They do not have binding legal force.

The objective characteristics of the products or goods are considered at the time of presentation to customs. A subsequent analysis or technical examination may be required

Expert evidence may be offered in relation to the objective characteristics and properties of the goods in appropriate cases. Reference to catalogues and learned treatises may be appropriate. The classification of foods drawn up by the Food and Agricultural Organisation and the World Health Organisation may be referred to.

Factors in Interpretation II

The court has considered various factors in determining the classification of goods objectively in various cases over time. The below is a range of factors that may be relevant in particular case

  • the function which the goods facilitate;
  • geographical origin where the products classification may depend on the process by which it is manufactured or another geographical origin of some of its constituent elements
  • the intention in the creation of the products;
  • whether or not the product was intentionally created
  • state of medical science and technology (may assist in some cases)
  • the intended use of the products will not always be relevant but may sometimes give objective criteria for classification if it is inherent to the character of the product
  • sight and sensory perception may be relevant. This may include what is visible can be tasted smelt or otherwise perceived. This will be relevant in respect of particular types of goods for example bold.
  • the process of manufacturing is not usually relevant. However, in  some cases, the tariff refers to the manufacturing process which is thereby relevant
  • technological innovation and developments will not necessarily change the classification of goods. There may be technological developments; which  may be included in the updated tariff

General Rules on Interpretation

The following general rules apply to both nomenclature (classification) and duties.

The first rule is to the effect that unless otherwise provided, the provisions relating to customs values apply to determined values by reference to which the headings are defined as well as the customs values for ad valorem (percentage) customs duty.

The second rule sets out the meaning of gross weight and net weight, where goods are chargeable by weight. Gross weight is the aggregate weight of the goods and all the packaging material and packing containers. Net weight or weight without qualification is the weight of the goods themselves without packing material and packing containers of any kind.

The third rule relates to rates of exchange. The equivalent in national currencies to the euro for non-euro states is specified

In some areas, the courts have developed case law relevant to specific goods and classification headings to which reference must be made. Many of these are technical and relate to particular sectors. Litigation has arisen due in particular circumstances due to  the high stakes economic consequences, economic power in the market practice pages and the lack of certainty in relation to the issue or  question

Technical matters have come before the courts in relation to such matters as medicaments consisting of mixed or mixed products for therapeutic or prophylactic uses put up in measured doses or in the form of packaging for retail sales.

Cases have also turned on distinctions between foodstuffs and chemical products residues and waste. There have been several cases relating to electronics and  computer technology

Binding Tariff Information I

Binding tariff information supplied by customs authority of a member statemate may become binding on the customs authorities of all states. This will not apply to the United Kingdom after Brexit.

Binding tariff information is valid for six years. It may be subject to changes in legislation. Even in the circumstances, a trader may request authorities to allow it to apply for a transitional period. This is usually up to 6 months. Generally, it must be shown that the trader had entered binding contracts in relation to goods on the basis of the binding tariff information before the change in legislation occurred.

Binding tariff information is by national customs authorities are published in the European binding tariff information database.

There is provision for binding origin information in much the same manner as that for tariffs. It Is generally valid for three years.

Binding Tariff Information II

There is a provision in principle for advance decisions in relation to valuations on a more informal basis which gives an indication in relation to classification, origin and value which are binding for a period, usually up to a year. This applies throughout the European Union.

Binding rulings are mandatory for contracting parties under the Kyoto Convention. Advance rulings on customs value based on cost insurance freight are less useful than those in respect of free on board based valuations, because of changes in transport and insurance costs which must be included in the CIF measure.

There is no provision as such for binding value information rulings.W here the code contemplates that a person may request information concerning the application of customs legislation, the customs authority may provide it

Binding information may be relied on by the holder in respect of the customs tariff classification or origin in respect of goods for which the formalities were completed after the date on which the information was supplied

Customs authorities may require the holder of information to inform them that he is in possession of binding information.

The holder of the information must be able to prove in relation to the tariff information that the goods correspond with those described in the binding information.

In respect of origin, he must be able to prove that the circumstances relevant to determining the acquisition of origin correspond in every way with the circumstances described in the information.

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