On 4 August 2004, Kamino International Logistics B.V.imported a batch of LCD colour monitors under subheading 8528 21 90 of the Combined Nomenclature. The colour monitors at issue liquid crystal displays ("LCD") with a 23 inch screen and connecting points for D-sub, DVI-D, USB, S-video and Composite-video. These allow the monitors to display signals from an automatic data-processing machine (read: a personal computer, "PC"), as well as from other sources, such as a DVD player. The monitors are also provided with an audio port with a capacity of maximum 4 Watt to which loudspeakers can be connected. Kamino received an assessment amounting to €37,452.38 in customs duties for the import of these monitors.

Kamino argues that the LCD monitors should be classified under subheading 8471 60 90 of the CN (0% customs duties) and therefore lodged a complaint against the aforementioned assessment. In the legal proceedings that followed, the Customs Chamber of the Amsterdam Court of Appeal decided in Kamino's favour. The State Secretary of Finance appealed to the Dutch court of cassation ("Hoge Raad"). On 13 July 2007, the Hoge Raad referred three questions concerning the interpretation of the customs tariff to the Court of Justice of the European Communities ("ECJ").

Following the reference by the Hoge Raad of the above-mentioned questions, the Advocate General ("AG") gave an interesting opinion on 10 September 2008. This opinion does not contain a final judgment but merely advises the ECJ on one. This opinion will be further elaborated upon in this article.

Conclusion AG

As mentioned earlier, the Hoge Raad referred three questions to the ECJ for a preliminary ruling . The AG discusses each of these questions. It is important to stress that Kamino is in favour of classification of the LCD monitor at issue under Chapter 84 (heading 8471) whilst the State Secretary of Finance believes the correct classification to be Chapter 85 (heading 8528).

Note 5 to Chapter 84

Firstly, the Hoge Raad wonders whether Note 5 to Chapter 84 of the CN can be interpreted in such a way as to exclude a colour monitor that can display signals from a PC as referred to in heading 8471 of the CN as well as from other sources. This stance is taken by the Dutch Government and the European Commission.

The AG deals summarily with this point. Equipment that is aimed to be 'principally' but not solely connected and used with a PC, can be classified as an 'informatics product' under Chapter 84. The AG, therefore, concludes that Note 5 to Chapter 84 of the CN 2004 should be interpreted in such a way as to prohibit the exclusion from classification under heading 8471 of the CN of a colour monitor merely because that monitor is capable of displaying signals from a PC as well as from other sources

When can an LCD monitor be classified under heading 8471?

As indicated by the AG himself, this is the most delicate question to answer. The Dutch Government has stated that it is of the opinion that the LCD monitor at issue cannot be seen as of the sort used solely or principally in relation to an automatic data-processing machine, especially because of the connections the monitor possesses (D-sub, DVI-D, USB, S-video, Composite-video, audio port).

The AG provides a practical tool for the interpretation of the notion of 'principally using'. The notion of 'principal use' should, according to the AG, be interpreted as meaning normal/standard use. The time-frame during which a product is used for a certain application in relation to that used for other applications is thus not relevant; what is relevant is the use most frequently given to the product. In brief, it has to be determined what the normal use of the product is. Decisive importance is hereby given to the technical qualities of the product.

In case of the LCD monitor at issue, these qualities obviously are the resolution, the dimensions (ratio between the width and height of the screen), available connections, adjustability in height, possibility to tip over the monitor, and so forth. The AG stresses that all these factors need to be taken into account by the judge (i.e. the Hoge Raad) when determining whether the normal use of the monitor is mainly aimed at use with a PC.

Salient detail in this regard is the comment made by the AG that the presence of a DVI connection - this in contrast to what has been argued by the Dutch Government and the European Commission - is insufficient to determine that a monitor is not principally used for PC purposes.

Finally, the AG advises to not take into account the commercial use of the product when determining the normal use of the product because this increases the risk of misuse by the manufacturer.

Are the LCD monitors at issue covered by Classification Regulation No 754/2004?

In Regulation (EC) No 754/2004, the European Commission has classified plasma monitors with a 42 inch screen size under subheading 8528 21 90. The AG concludes that this classification regulation does not cover the LCD monitor at issue because the products - taking into account their screen size and the used technology (plasma vs LCD) - differ too strongly.

Outlook to the future

In the Kamino case, the AG concludes that the mere fact that an LCD monitor can display video images from other sources than from a PC, does not exclude its classification under heading 8471. For Kamino this opinion is useful, as is the AG's conclusion that the monitors at issue are not covered by Regulation (EC) 754/2004.

The question now is whether the ECJ will decide to abide by the opinion of the AG. If this is indeed the case, the national judge must go back to the base for the classification of the goods.

In fact, the AG gives the national judges homework amounting to the renewed assessing of the product by applying classification rule 1: "(...) for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes (...)". The tool given by the AG entails that for the classification of an LCD monitor the normal use of the monitor is determinative, thus including the technical qualities of the product such as the resolution, the dimensions, etc.