15 April 2011

SUCCESSFUL OUTCOME AT ECJ IN SKY/PACE CUSTOMS DUTY DISPUTE

Jeremy White represented Pace in this case where the Court of Justice of the European Union has decided that decoders with a hard disk drive – such as the Sky+ box – must be classified, for customs purposes, as set-top boxes with a communication function (duty free under the ITA Agreement – GATT/WTO) and not as recording apparatus (positive duty rate).  The Sky+ box is principally intended to be used to receive television signals and that function is inherent in that device.  It thus constitutes its principal function and the recording function is only secondary.  Consequently, the Explanatory Notes to the Combined Nomenclature, on which the Commissioners based their decision, must be disregarded on that point.  The Court observed that the ITA did not have direct effect but did have primacy over secondary Community legislation for the purposes of interpretation.  The judgment is therefore of considerable importance with respect to the classification of other kinds of set-top box, flat panel displays and multi-function devices whose classification has been the subject of a WTO Panel Report.
You can access the ECJ Judgment here.