Contract analysis

1. Thalassa Shipping & Logistics Société Anonyme ("TSL" or the "Objecting Party") hereby files this administrative objection (ένσταση) against Additional Duty Assessment Notice No. AADE/ADAN/2022/0073 (the "Assessment Notice" or "ADAN/2022/0073") in its entirety. TSL contests the legality, factual basis, and proportionality of the Assessment Notice, and respectfully requests that the Directorate of Resolution of Disp

2. The Assessment Notice reclassifies twenty (20) units of specialized marine cargo-handling equipment imported by TSL from Hailong Heavy Industries Co., Ltd. (hereinafter "Hailong"), a manufacturer headquartered at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, People's Republic of China (Unified Social Credit Code: 91330211MA2GR8KT5X), during the period from 2019 to 2022. The reclassified

3. The total value base of the reclassified equipment is €67,200,000 (sixty-seven million two hundred thousand euros). The Assessment Notice reclassifies all twenty (20) units from Combined Nomenclature ("CN") code 8426 41 00 (carrying a Most Favoured Nation ("MFN") duty rate of 0%) to CN code 8428 90 90 (carrying an MFN duty rate of 2.2%). The resulting additional customs duty assessed under the Assessment Notice am

4. In addition to the principal duty assessment of €1,478,400, the Assessment Notice imposes associated administrative penalties, import VAT adjustments, and late payment interest, all of which TSL contests and which are addressed in detail in Section IV of this objection.

5. TSL notes, for the avoidance of doubt, that eighteen (18) rubber-tired gantry ("RTG") cranes imported under a separate Master Purchase Contract No. HHI-TSL-2019-002, dated March 22, 2019, with a total declared CIF customs value of €25,200,000, remain classified under CN code 8426 41 00 and are not subject to reclassification under the Assessment Notice. AADE's auditors have confirmed in writing, within the body of

6. All forty-seven (47) units of equipment imported under the four master purchase contracts were imported through the Port of Piraeus and cleared through the Piraeus Regional Customs Office under Single Administrative Documents ("SADs") filed by Peloros Customs Agency S.A. (EORI: GR801234567000), TSL's licensed customs broker. Peloros Customs Agency was represented in all import declarations by its managing director

II. FACTUAL BACKGROUND A. TSL and Its Terminal Operations

7. TSL is a Greek société anonyme (ανώνυμη εταιρεία, or "A.E."), incorporated and registered under the laws of the Hellenic Republic. The company was founded in 2009 and is headquartered at 47 Akti Miaouli, 185 35 Piraeus, Greece, in the heart of the traditional maritime business district adjacent to the Port of Piraeus. TSL is registered with the Piraeus Commercial Registry under number 78214/06/B/09/42, and holds E

8. TSL's core business activities encompass container shipping, port terminal operations, freight forwarding, and marine equipment services. Since its founding, TSL has grown to become a significant participant in the Greek and Eastern Mediterranean maritime logistics sector. As of the date of this filing, TSL employs approximately 1,450 personnel across its operations in Greece, Cyprus, and Romania. For fiscal year

9. TSL's shipping operations are conducted through a fleet of twenty-eight (28) container vessels of varying size and capacity, serving trade routes throughout the Mediterranean, Northern Europe, and the Middle East. In parallel with its shipping operations, TSL manages terminal operations at three Greek ports — Piraeus, Thessaloniki, and Volos — under long-term concession agreements granted by the relevant port auth

10. TSL's Chairman and Chief Executive Officer is Mr. Nikolaos Andreadis. The controlling shareholder of TSL is Andreadis Family Holdings LLC, a Delaware limited liability company (Delaware Division of Corporations File No. 5847291), which holds approximately 62% of TSL's outstanding equity capital. The remaining equity is held by a combination of institutional investors and minority shareholders. TSL is governed by

11. The equipment that is the subject of this objection was procured specifically to modernize and expand TSL's container terminal operations at the three Greek port concessions described above. The investment in state-of-the-art STS gantry cranes and automated stacking crane systems reflects TSL's strategic commitment to enhancing terminal throughput capacity, improving safety, and achieving operational efficiencies

12. Between March 2019 and January 2022, TSL imported forty-seven (47) units of specialized marine cargo-handling equipment from Hailong Heavy Industries Co., Ltd. under four master purchase contracts. Hailong is a leading Chinese manufacturer of port and marine equipment, headquartered in Ningbo, Zhejiang Province, with manufacturing facilities in Ningbo and Nantong. The master purchase contracts, their dates, the e

13. The total declared CIF customs value across all four master purchase contracts was €98,000,000 (ninety-eight million euros). The equipment was procured under competitive international tender procedures, and the contract prices were negotiated at arm's length between TSL and Hailong. Delivery was effected on a CIF Piraeus basis, with Hailong responsible for ocean freight and marine cargo insurance to the Port of P

14. The equipment was destined for use at TSL's terminal facilities at the ports of Piraeus, Thessaloniki, and Volos. The twelve STS gantry cranes were allocated to TSL's Piraeus container terminal (eight units) and Thessaloniki container terminal (four units). The eight ASC systems were allocated exclusively to the Piraeus container terminal, which was undergoing a major automation upgrade during the relevant period

15. All equipment was delivered in partially assembled condition aboard heavy-lift vessels and subsequently assembled and commissioned on-site by Hailong's field engineering teams, with support from TSL's own technical personnel. The commissioning process, including integrated systems testing and trial operations, was completed in stages between 2019 and 2022, with final acceptance of the last ASC units occurring in

16. On April 4, 2022, AADE's Piraeus Regional Customs Office initiated a post-clearance audit of TSL's import declarations relating to the above-described equipment. The audit was conducted under audit file reference AADE/DTE/2022/PIR-04518 and was led by Chief Customs Auditor Aikaterini Vlachopoulou, together with a team of customs auditors and technical specialists attached to the Piraeus Regional Customs Office.

17. The scope of the audit encompassed both tariff classification and customs valuation of the imported equipment. The audit team reviewed the relevant SADs, commercial invoices, purchase contracts, technical specifications, product brochures, and correspondence between TSL, Hailong, and Peloros Customs Agency. The audit team also conducted site visits to TSL's Piraeus container terminal to inspect the installed equi

18. The audit was completed on August 1, 2022. On August 12, 2022, AADE issued two separate Additional Duty Assessment Notices: (a) ADAN/2022/0073 (Classification) — the Assessment Notice that is the subject of this objection, reclassifying twenty (20) units of equipment from CN 8426 41 00 to CN 8428 90 90 and assessing additional customs duties of €1,478,400; and (b) ADAN/2022/0074 (Valuation) — a separate assessmen

19. AADE has been advised in connection with this matter by external legal counsel from Meridian & Drakos Dikigiriko Grafeio, located at 15 Stadiou Street, 105 62 Athens, Greece. The responsible attorneys at Meridian & Drakos are Panagiotis Drakos, Senior Partner (Athens Bar Association Registration No. 29481), and Irini Konstantinou, Associate. D. Classification at Issue

20. At the time of importation, TSL classified all forty-seven (47) units of equipment — including the twelve STS gantry cranes, the eighteen RTG cranes, and the eight ASC systems — under CN code 8426 41 00. This subheading falls within heading 8426 of Chapter 84 of the Combined Nomenclature, which covers, inter alia, "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works

21. AADE contends, in the Assessment Notice, that the twelve STS gantry cranes and eight ASC systems (a total of twenty units, with a combined declared CIF value base of €67,200,000) are improperly classified under heading 8426 and should instead be classified under CN code 8428 90 90. Heading 8428 covers "Other lifting, handling, loading or unloading machinery (for example, lifts, escalators, conveyors, teleferics).

22. The eighteen RTG cranes imported under Contract HHI-TSL-2019-002 remain undisputed under CN 8426 41 00 at a 0% duty rate. AADE's own audit report expressly confirms that the RTG cranes are correctly classified. As discussed below, this concession is significant to the analysis, because the RTG cranes, like the STS gantry cranes and ASC systems, are functionally cranes that lift containers by means of wire ropes f

III. GROUNDS OF OBJECTION A. The Equipment Is Properly Classified Under Heading 8426 — "Cranes"

23. TSL submits that both the twelve STS gantry cranes and the eight ASC systems are properly classified under heading 8426 of the Combined Nomenclature — not under the residual heading 8428 as the Assessment Notice asserts. The equipment consists of cranes in every relevant sense: functionally, mechanically, and according to the plain meaning of the heading text, the Explanatory Notes, established EU customs practic

1. Applicable Legal Framework.

24. The classification of goods imported into the customs territory of the European Union is governed by the Combined Nomenclature ("CN"), established by Council Regulation (EEC) No. 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff, as amended. The CN is based on the Harmonized Commodity Description and Coding System ("HS") maintained by the World Customs Organizatio

25. Classification within the CN is determined by reference to the following hierarchy of interpretive instruments: (a) The General Interpretive Rules ("GIRs") of the Harmonized System, which are incorporated into the CN by virtue of Article 1(2) of Regulation 2658/87. The GIRs set out the foundational principles for tariff classification and are binding as a matter of EU law. GIR 1 provides that classification is de

26. The two headings at issue in this dispute are: Heading 8426: "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane." Heading 8428: "Other lifting, handling, loading or unloading machinery (for example, lifts, escalators, conveyors, teleferics)."

27. It is immediately apparent from the heading texts that heading 8426 specifically and expressly covers "cranes," whereas heading 8428 is a residual heading covering "other" lifting, handling, loading, or unloading machinery. The word "other" in heading 8428 signifies that this heading encompasses only machinery not covered by preceding headings in the Chapter — including, critically, heading 8426.

2. Application of GIR 1 — Heading Text.

28. GIR 1 provides that "classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes." This is the starting point and, in many cases, the ending point of any classification analysis. The terms of the heading are to be given their plain and ordinary meaning, interpreted in context and in light of the overall structure of the tariff nomenclature.

29. Both the STS gantry cranes and the ASC systems are "cranes" within the plain and ordinary meaning of that term as used in heading 8426. This conclusion is supported by the following considerations:

30. Both products lift loads vertically by means of wire ropes and spreader mechanisms suspended from a trolley traveling along a horizontal boom or gantry crossbeam. This is the defining characteristic of a crane, in both ordinary language and established engineering and technical usage. A crane is, at its core, a machine that uses a hoisting mechanism — typically involving wire ropes, sheaves, and a hook or other l

31. The STS gantry crane (Model QC-65 Super Post-Panamax Ship-to-Shore Container Crane) is a quayside container crane designed to load and unload containers from container ships. Its principal technical characteristics include: • Outreach (waterside): 65 meters • Backreach (landside): 20 meters • Lift height above quay: 52 meters • Safe working load (SWL): 65 metric tonnes under spreader • Hoist system: electrically

32. The ASC system (Model ASC-40R Automated Stacking Crane) is a container yard stacking crane designed to stack, retrieve, and reposition containers in the terminal yard. Its principal technical characteristics include: • Safe working load (SWL): 40 metric tonnes under spreader • Hoist system: electrically powered, wire-rope hoist with headblock and telescopic spreader • Trolley system: electrically driven trolley t

33. Both machines perform the classic crane operating cycle: hoist (vertical lift of the load by wire ropes), traverse (horizontal travel of the trolley carrying the load along the gantry beam), and lower (controlled descent of the load to its destination). This three-phase cycle — hoist, traverse, lower — is the fundamental operating sequence that defines a crane and distinguishes it from other categories of materia

34. The characterization of both the QC-65 and the ASC-40R as "cranes" is further confirmed by the manufacturer's own product designations. Hailong identifies the QC-65 as a "Super Post-Panamax Ship-to-Shore Container Crane" and the ASC-40R as an "Automated Stacking Crane." While manufacturer designations are not dispositive for customs classification purposes, they constitute probative evidence of the common underst

35. The classification of both products as cranes is also consistent with international industry standards. The European Federation of Materials Handling ("FEM"), the principal European industry body for materials handling and logistics equipment, classifies both STS gantry cranes and automated stacking cranes as "cranes" within its Group A (Heavy Lifting Equipment) classification framework. Similarly, the Internatio

3. Application of GIR 3(a) — Most Specific Description.

36. TSL submits that the application of GIR 1 is sufficient to resolve this classification dispute in TSL's favor. Both products are "cranes" within the plain meaning of heading 8426, and no further analysis is required. However, should the DED consider that the goods could prima facie be classifiable under both heading 8426 and heading 8428 — a proposition that TSL does not concede — GIR 3(a) provides a clear rule f

37. GIR 3(a) provides: "The heading which provides the most specific description shall be preferred to headings providing a more general description." This rule establishes a hierarchy between specific and residual headings. Where a product falls within the specific terms of one heading and within the general or residual terms of another, the specific heading prevails.

38. Heading 8426 specifically and expressly names "cranes" — the precise category of machinery at issue in this dispute. The heading text does not merely describe cranes by reference to their function; it identifies them by name. This is the paradigmatic case of a "specific description" within the meaning of GIR 3(a).

39. Heading 8428, by contrast, is a residual heading. It covers "other" lifting, handling, loading, or unloading machinery. The word "other" is the hallmark of a residual heading — it encompasses only machinery that is not specifically covered by any preceding heading in the Chapter. The parenthetical examples provided in heading 8428 — "for example, lifts, escalators, conveyors, teleferics" — illustrate machinery th

40. Under GIR 3(a), the heading providing the most specific description prevails over the heading providing a more general description. Heading 8426's express, named reference to "cranes" is manifestly more specific than heading 8428's residual reference to "other" lifting and handling machinery. Accordingly, even if the equipment could be viewed as falling within the broad language of heading 8428 (which TSL does no

4. Explanatory Notes Support Heading 8426.

41. The Explanatory Notes to the Harmonized System ("HS Explanatory Notes"), published by the WCO, provide authoritative interpretive guidance on the scope of each heading. The HS Explanatory Notes to heading 8426 describe the heading as covering: "Machines and apparatus designed to lift, load, or move objects or materials by means of ropes, chains, or other lifting gear suspended from a jib, boom, or overhead struct

42. Both the QC-65 STS gantry crane and the ASC-40R automated stacking crane satisfy every element of this description: (a) They are machines designed to lift and move objects — specifically, intermodal shipping containers; (b) They lift and move these objects by means of ropes — specifically, steel wire ropes; (c) The ropes and associated lifting gear (headblock, spreader) are suspended from an overhead structure —

43. The HS Explanatory Notes to heading 8426 further provide a detailed enumeration of the types of cranes covered by the heading. This enumeration includes, among others: overhead travelling cranes, portal cranes (portal jib cranes), gantry cranes, tower cranes, derrick cranes, and floating cranes. The STS gantry crane is a type of portal crane or gantry crane. The ASC is a type of gantry crane or overhead travellin

44. By contrast, the HS Explanatory Notes to heading 8428 describe a residual heading covering machinery "not falling in any of the preceding headings of this Chapter." The examples provided in the Explanatory Notes to heading 8428 include: bucket elevators, pneumatic conveyors, mechanical stackers (in the sense of warehouse shelf stackers), ski lifts, aerial ropeways for passenger transport, and similar equipment. N

45. The CJEU has consistently held that the Explanatory Notes, while not legally binding, constitute an important aid to the interpretation of the scope of the various tariff headings and are to be given significant weight by national customs authorities and courts. See Case C-311/04 Algemene Scheeps Agentuur Dordrecht, ECLI:EU:C:2006:23, paragraph 25; Case C-500/04 Proxxon, ECLI:EU:C:2006:111, paragraph 22.

5. Heading 8428 Is a Residual — Inapplicable to Cranes.

46. TSL underscores the fundamental structural point that heading 8428 is, by its own terms, a residual heading. The opening word of the heading text — "Other" — restricts its scope to machinery that is not covered by any other heading in Chapter 84. This is a standard structural feature of the Harmonized System: within each Section and Chapter, specific headings are listed first, and residual or "basket" headings ap

47. Cranes are specifically and expressly described in heading 8426. Goods that are specifically described in one heading cannot, as a matter of law, be classified under a residual heading. This principle is well established in CJEU case law and flows directly from GIR 1 and GIR 3(a). See, e.g., Case C-152/10 Unomedical, ECLI:EU:C:2011:402 (holding that goods specifically described in one heading cannot be classified

48. To classify the STS gantry cranes and ASC systems under heading 8428 would be to ignore the express text of heading 8426, which specifically covers "cranes," and to resort to a residual heading for goods that have a specific home in the nomenclature. This is precisely the analytical error that the GIRs are designed to prevent.

6. Automation Does Not Alter the Classification.

49. A central pillar of AADE's reasoning in the Assessment Notice — particularly with respect to the eight ASC-40R automated stacking crane systems — is the contention that the full automation of these machines fundamentally changes their nature, such that they are no longer "cranes" within the meaning of heading 8426 but are instead "other lifting, handling, loading or unloading machinery" within the meaning of head

50. The heading text of 8426 covers "cranes" without any qualification as to the method or degree of control. The heading text does not distinguish between manually operated cranes, semi-automated cranes, and fully automated cranes. It covers "cranes" — full stop. If the drafters of the Harmonized System had intended to limit heading 8426 to operator-controlled or manually operated cranes, they would have expressly s

51. This conclusion is reinforced by Section XVI, Note 5 of the Combined Nomenclature. Note 5 provides that "references to machines or apparatus in Section XVI" cover "both the manual type and the power-operated type" and "both the hand-operated type and the machine-operated type." While this Note is principally addressed to the distinction between manual and powered operation, its underlying principle is clear: the