1044-00005 · Client 1044 · BTI Application & Filings

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CALDERWOOD & HARKNESS LLP Avenue Louise 480 1050 Brussels, Belgium Tel: +32 (0)2 643 7800

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www.calderwoodharkness.com

March 15, 2023

European Commission Directorate-General for Taxation and Customs Union (DG TAXUD) Classification Policy Unit — TAXUD.A.3 Rue de la Loi 200 1049 Brussels, Belgium

Transmitted via: Independent Authority for Public Revenue (AADE) Directorate of Customs Compliance and Audit 2 Karaoli & Dimitriou Street 185 31 Piraeus, Greece

Re: Supplemental Submission in Support of BTI Application BTI-GR-2022-003847 — Thalassa Shipping & Logistics SA — Classification of Ship-to-Shore Gantry Cranes and Automated Stacking Cranes Under the Combined Nomenclature

Dear Members of the Classification Policy Unit,

We write on behalf of our client, Thalassa Shipping & Logistics Société Anonyme ("TSL"), EORI No. GR094827361000, a company organized under the laws of the Hellenic Republic, with its registered office at 47 Akti Miaouli, 185 35 Piraeus, Greece, in connection with Binding Tariff Information Application BTI-GR-2022-003847, which was filed with the Independent Authority for Public Revenue ("AADE") on November 15, 2022. As DG TAXUD is aware, the application was referred to this Directorate-General for consultation on February 7, 2023, pursuant to Article 34(10) of Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (the "UCC"). The referral was prompted by the existence of divergent Binding Tariff Information rulings among EU member states concerning materially identical goods — specifically, ruling NL-BTI-2021-01234, issued by the Dutch Customs and Tax Administration on June 14, 2021, which classified ship-to-shore ("STS") gantry cranes and automated stacking crane ("ASC") systems under CN 8426 19 00, and ruling DE-BTI-2020-05678, issued by the Hauptzollamt Hamburg-Hafen on September 3, 2020, which classified an ASC system under CN 8428 90 90.

This supplemental submission is intended to supplement and expand upon the legal arguments set forth in Annex C of the original BTI application, and to provide DG TAXUD with additional materials — including a supplemental expert opinion, a survey of member state classification practices, and an analysis of relevant World Customs Organization ("WCO") precedent — to assist the Directorate-General in reaching a harmonized classification determination.

This submission is filed jointly by Christy Bauer, Senior Associate at Calderwood & Harkness LLP, Brussels office, and Alexandros Vournas, Managing Partner at Vournas & Theodorakis Dikigiriko Grafeio, 22 Academias Street, 106 71 Athens, Greece (Athens Bar Association Registration No. 18744), who serves as TSL's local Greek counsel retained by Calderwood & Harkness in connection with this matter. This matter is designated internally as C&H Matter No. C&H-2022-ITS-04781.

I. BACKGROUND AND PROCEDURAL HISTORY

A. The Applicant

Thalassa Shipping & Logistics Société Anonyme ("TSL") is a Greek société anonyme (Ανώνυμη Εταιρεία, or "A.E.") incorporated and existing under the laws of the Hellenic Republic, registered with the Piraeus Commercial Registry under Registration No. 78214/06/B/09/42 and holding Greek Tax Identification Number (AFM) 094827361. TSL was founded in 2009 and has since grown into one of Greece's leading integrated shipping and logistics enterprises. The company currently employs approximately 1,450 persons across its operations in Greece, Cyprus, and Romania, and reported annual revenue of €387.2 million for fiscal year 2021.

TSL's core business activities encompass container shipping, port terminal operations, freight forwarding, and marine equipment services. The company operates a fleet of 28 container vessels engaged in both intra-Mediterranean and intercontinental trade routes. Of particular relevance to the present matter, TSL manages terminal operations at three Greek ports — Piraeus, Thessaloniki, and Volos — under long-term concession agreements entered into with the respective port authorities. These terminal operations require substantial ongoing capital investment in specialized marine cargo-handling equipment, including the equipment at issue in this BTI application.

TSL's Chairman and Chief Executive Officer is Mr. Nikolaos Andreadis, who has served in that capacity since the company's founding in 2009.

B. The Imported Equipment

Between March 2019 and January 2022, TSL imported a total of 47 units of specialized marine cargo-handling equipment manufactured by Hailong Heavy Industries Co., Ltd. (海龙重工有限公司), a company registered and operating in the People's Republic of China, with its principal manufacturing facility located at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, PRC (Unified Social Credit Code: 91330211MA2GR8KT5X). Hailong Heavy Industries is a leading global manufacturer of port and marine equipment, including ship-to-shore container cranes, rubber-tyred gantry cranes, rail-mounted gantry cranes, automated stacking cranes, and ancillary port automation systems.

All 47 units of equipment were imported through the Port of Piraeus and cleared through the Piraeus Regional Customs Office of AADE. Customs entries were filed on TSL's behalf by Peloros Customs Agency S.A. (EORI: GR801234567000), TSL's licensed customs broker, which has acted in that capacity for TSL since 2012.

The equipment was imported pursuant to four master purchase contracts between TSL and Hailong Heavy Industries, the relevant details of which are set forth below:

It is important to note at the outset that the classification dispute at issue in this BTI application concerns only 20 of the 47 imported units — specifically, the 12 STS gantry cranes imported under Contract HHI-TSL-2019-001 and the 8 ASC systems imported under Contract HHI-TSL-2020-003. The total declared CIF customs value of the equipment in dispute is €67,200,000. The 18 rubber-tyred gantry ("RTG") cranes imported under Contract HHI-TSL-2019-002 are not subject to any classification dispute; both TSL and AADE agree that the RTG cranes are properly classified under CN 8426 41 00 ("Self-propelled [machinery], on tyres"). The spare parts, software, and commissioning services imported under Contract HHI-TSL-2021-004 are likewise not the subject of the present dispute, as their classification follows that of the principal equipment to which they relate.

C. The Classification Dispute

At the time of importation, TSL classified all of the equipment — including the 12 STS gantry cranes and 8 ASC systems — under CN 8426 41 00, the subheading for "Self-propelled [machinery], on tyres" within heading 8426 of the Combined Nomenclature. TSL now acknowledges in this BTI application that the specific subheading 8426 41 00 is technically inaccurate for the STS gantry cranes and ASC systems, as these machines are rail-mounted rather than self-propelled on tyres. TSL accordingly requests, as part of this BTI application, correction of the subheading classification to CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"), which is the appropriate subheading within heading 8426 for rail-mounted gantry cranes. This correction has no duty impact, as all subheadings within heading 8426 carry a most-favoured-nation ("MFN") duty rate of 0% under the Common Customs Tariff.

The dispute with AADE arises from a post-clearance audit conducted by AADE's Directorate of Customs Compliance and Audit. The audit was initiated under file reference AADE/DTE/2022/PIR-04518 on April 4, 2022, and completed on August 1, 2022. Upon completion of the audit, AADE issued Additional Duty Assessment Notice AADE/ADAN/2022/0073, dated August 12, 2022 (the "Assessment Notice"), in which AADE reclassified the 12 STS gantry cranes and 8 ASC systems from heading 8426 to CN 8428 90 90 — the residual subheading of heading 8428, covering "Other lifting, handling, loading, or unloading machinery" not specified elsewhere in Chapter 84. The MFN duty rate applicable to CN 8428 90 90 is 2.2%.

The additional customs duty assessed under the Assessment Notice is calculated as follows:

Reclassified customs value: €67,200,000 MFN duty rate (CN 8428 90 90): 2.2% Additional duty assessed: €1,478,400

TSL filed an administrative objection to the Assessment Notice with AADE's Directorate of Resolution of Disputes ("DED") on November 30, 2022. By agreement between TSL and AADE, formalized in a standstill agreement dated March 1, 2023, the DED proceedings have been held in abeyance pending the resolution of the BTI application and, specifically, the outcome of DG TAXUD's consultation under Article 34(10) UCC.

D. The BTI Application and Referral

BTI Application BTI-GR-2022-003847 was filed with AADE on November 15, 2022, seeking a binding tariff information ruling confirming that both the 12 STS gantry cranes (Hailong Model QC-65) and the 8 ASC systems (Hailong Model ASC-40R) are properly classified under CN 8426 19 00 as "other overhead travelling cranes, transporter cranes, gantry cranes" within heading 8426.

The BTI application was supported by three principal annexes:

(a) Technical Annex — containing detailed equipment descriptions, engineering specifications, photographs, and schematic drawings for both the QC-65 STS gantry crane and the ASC-40R automated stacking crane;

(b) Legal Argument Annex — setting forth TSL's classification analysis under the General Interpretive Rules ("GIRs"), the relevant Section and Chapter Notes of the Combined Nomenclature, and the applicable WCO Explanatory Notes; and

(c) Expert Opinion of Dr. Lukas Brenner — an independent classification opinion prepared by Dr. Brenner, Managing Director of Argonaut Trade Consulting GmbH, Berlin, Germany, a recognized expert in customs classification of industrial machinery and former member of the WCO Harmonized System Committee.

On February 7, 2023, AADE referred the BTI application to DG TAXUD for consultation under Article 34(10) of the UCC, citing the existence of divergent Binding Tariff Information rulings issued by the customs authorities of other EU member states in respect of materially identical goods. Specifically, the referral identified the divergence between:

• BTI Ruling NL-BTI-2021-01234, issued by the Dutch Customs and Tax Administration (Douane Nederland, Belastingdienst) on June 14, 2021, which classified both STS cranes and ASC systems under CN 8426 19 00; and

• BTI Ruling DE-BTI-2020-05678, issued by the Hauptzollamt Hamburg-Hafen (Hamburg-Port Main Customs Office) on September 3, 2020, which classified an ASC system under CN 8428 90 90.

The referral to DG TAXUD under Article 34(10) UCC triggers the consultation mechanism designed to ensure uniform application of the Common Customs Tariff across all member states of the European Union. TSL respectfully submits this supplemental submission to assist DG TAXUD in its deliberations.

II. SUMMARY OF TSL'S CLASSIFICATION POSITION

TSL submits that both the STS gantry cranes (Hailong Model QC-65) and the ASC systems (Hailong Model ASC-40R) are properly classified under heading 8426 of the Combined Nomenclature, specifically under subheading CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"). Heading 8426, in relevant part, covers "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane." Both machines fall squarely within the term "cranes" as used in this heading, and more specifically within the concept of "gantry cranes" identified in the subheading text.

The classification turns on the machines' objective physical characteristics at the time of importation. Both the QC-65 STS gantry crane and the ASC-40R automated stacking crane share the following core physical and structural characteristics that are universally associated with, and definitional of, gantry cranes:

(a) a gantry (portal frame) structure — a large steel structural frame supported on legs that travel on rails, creating an open portal through which containers and transport vehicles can pass;

(b) a trolley traveling on a horizontal boom or crossbeam — a wheeled carriage that traverses the horizontal beam of the gantry, carrying the hoist mechanism and allowing horizontal movement of the load;

(c) a wire rope hoist system with headblock and spreader — multiple wire rope reeving, a headblock assembly, and a telescoping container spreader that locks onto the corner castings of standardized intermodal containers; and

(d) the capability for vertical lifting and horizontal traversing of loads (containers) — the fundamental crane function of raising a load from one position, moving it horizontally, and lowering it to another position.

These physical characteristics are identical to those of traditional gantry cranes that have been universally and without controversy classified under heading 8426 since the inception of the Harmonized System in 1988. The QC-65 STS gantry crane and the ASC-40R automated stacking crane are, in all material structural and mechanical respects, gantry cranes.

TSL recognizes that the ASC-40R differs from the QC-65 in one significant respect: the degree of automation. The QC-65 STS gantry crane is semi-automated, with an operator present in a cab who controls certain crane movements while other functions are automated. The ASC-40R is fully automated, operating without a human operator in a cab, with all crane movements directed by the HaiControl Suite v4.2 software system in conjunction with sensor arrays (LIDAR, DGPS, optical container recognition). However, TSL submits that this distinction — the degree of automation — does not alter the heading-level classification, for the following reasons:

(i) Heading 8426 covers "cranes" without qualification as to whether the crane is manually operated, semi-automated, or fully automated. The heading text imposes no condition or limitation based on the method of control or the presence or absence of a human operator.

(ii) The Harmonized System and the Combined Nomenclature classify goods based on their objective physical characteristics — their structure, design, and mechanical function — not based on the control technology or software that directs their operation. The physical characteristics of the ASC-40R at the time of importation are those of a gantry crane.

(iii) Section XVI, Note 5 of the Combined Nomenclature provides that references to machines in Section XVI cover both manual and power-operated machines. This Note reflects the broader principle that the manner of control or operation does not determine heading-level classification within Section XVI.

By contrast, heading 8428 is a residual heading that covers "Other lifting, handling, loading, or unloading machinery (for example, lifts, escalators, conveyors, teleferics)." The critical words in this heading are "other" and the parenthetical examples. The heading applies only to lifting, handling, loading, or unloading machinery that is not elsewhere specified or included in Chapter 84. Since STS gantry cranes and ASC systems are "cranes" within the meaning of heading 8426, they are "elsewhere specified" in Chapter 84, and heading 8428 cannot apply.

Furthermore, to the extent any ambiguity exists as to whether the ASC-40R is more specifically described by heading 8426 or heading 8428, General Interpretive Rule 3(a) resolves the question in favour of heading 8426. GIR 3(a) provides that, when goods are prima facie classifiable under two or more headings, "the heading which provides the most specific description shall be preferred to headings providing a more general description." Heading 8426, which specifically identifies "cranes" by name, provides a more specific description of these machines than heading 8428, which is a catch-all for "other" handling machinery.

III. ADDITIONAL EXPERT OPINION OF DR. LUKAS BRENNER

TSL encloses as Exhibit 1 to this submission a supplemental expert opinion prepared by Dr. Lukas Brenner, Managing Director of Argonaut Trade Consulting GmbH, Friedrichstraße 191, 10117 Berlin, Germany. This opinion supplements and expands upon the initial expert opinion of Dr. Brenner submitted as part of the original BTI application.

Dr. Brenner is one of Europe's foremost authorities on the customs classification of industrial machinery. His qualifications include the following:

• Dr. Brenner served as a member of the World Customs Organization's Harmonized System Committee from 2008 to 2016, representing the Federal Republic of Germany. During his tenure on the Committee, he participated in the consideration of numerous classification opinions concerning machinery of Chapter 84 and Chapter 85, including automated industrial equipment.

• Dr. Brenner holds a doctorate (Dr.-Ing.) in mechanical engineering from the Technische Universität München, with a doctoral thesis on structural dynamics of heavy lifting equipment.

• Dr. Brenner has over 20 years of professional experience in customs classification of industrial machinery, having served in the German customs administration before entering private consulting practice. He has provided expert opinions in classification disputes before national courts and customs authorities in Germany, the Netherlands, Belgium, France, and Italy, as well as before the General Court of the European Union.

In his supplemental opinion, Dr. Brenner reaches the following principal conclusions:

First, Dr. Brenner confirms that both the Hailong QC-65 STS gantry crane and the Hailong ASC-40R automated stacking crane are "cranes" within the meaning of heading 8426 of the Harmonized System, based on their mechanical structure and physical function. In Dr. Brenner's expert assessment, the question is not a close one: both machines exhibit every defining physical characteristic of a gantry crane, and would be universally recognized as cranes by any qualified mechanical engineer.

Second, Dr. Brenner identifies the core lifting mechanism common to both machines — wire ropes reeved through sheaves, a headblock assembly, a container spreader, a trolley traveling on a horizontal beam, all supported by a gantry (portal frame) structure — and concludes that this mechanism is the defining characteristic of a crane as that term is used in heading 8426 and as understood in both ordinary and engineering usage. The core lifting mechanism of the ASC-40R is identical to that of the QC-65 and, indeed, to that of traditional rail-mounted gantry (RMG) cranes that have been classified under heading 8426 without controversy for decades.

Third, Dr. Brenner addresses the role of the automated control systems in the ASC-40R, including the HaiControl Suite v4.2 software platform, the LIDAR-based obstacle detection system, the Differential Global Positioning System (DGPS) for precise crane positioning, and the optical container recognition system. Dr. Brenner concludes that these systems constitute control systems — they direct the movements of the crane — but they do not alter the fundamental mechanical nature of the machine. The ASC-40R remains, in Dr. Brenner's words, "a gantry crane in every structural and mechanical respect, the movements of which happen to be directed by software rather than by a human operator manipulating joysticks in a cab."

Fourth, Dr. Brenner notes that the WCO Harmonized System Committee has not adopted any classification opinion reassigning automated gantry cranes from heading 8426 to heading 8428. Dr. Brenner considers this absence significant, given that port terminal automation has been a global trend for over twenty years and the HS Committee has had ample opportunity to address the issue. The absence of any reclassification opinion strongly supports the conclusion that the existing consensus among customs administrations worldwide is that automated gantry cranes remain classified under heading 8426.

Fifth, Dr. Brenner provides a detailed analysis of the German BTI ruling DE-BTI-2020-05678 and concludes that the ruling is analytically flawed. In his assessment, the German authority erred in treating automation as a classification-determinative factor. The German ruling, according to Dr. Brenner, conflates the machine's physical function (lifting containers by means of a wire rope hoist system suspended from a gantry) with its software-driven operational management (automated stacking optimization, yard management algorithms, and predictive sequencing). Classification under the HS turns on what the machine is and what it does mechanically, not on the sophistication of the software that directs its movements.

Sixth, Dr. Brenner's opinion includes a detailed side-by-side technical comparison of the QC-65 STS gantry crane and the ASC-40R automated stacking crane. This comparison demonstrates that the only material differences between the two machines are: (1) the presence of an operator cabin on the QC-65, which is absent from the ASC-40R; and (2) the degree of automation — the QC-65 is semi-automated, while the ASC-40R is fully automated. Neither of these differences is relevant to heading-level classification. The structural components, the mechanical lifting system, the rail-mounted gantry configuration, and the physical operation (vertical lift, horizontal traverse, vertical lower) are identical.

Seventh, Dr. Brenner confirms that, in both ordinary usage and established engineering terminology, a gantry-mounted machine that lifts loads using a trolley and wire rope system suspended from a horizontal beam is universally referred to as a "crane." The term "crane" is not limited to operator-controlled machines; engineers and manufacturers routinely describe and market automated machines with these characteristics as "automated cranes" or "automated stacking cranes." The designation "crane" in the product name of the ASC-40R — "Automated Stacking Crane" — reflects this universal understanding.

IV. SURVEY OF EU MEMBER STATE BTI RULINGS AND CLASSIFICATION PRACTICE

TSL encloses as Exhibit 2 to this submission a comprehensive survey of Binding Tariff Information rulings and national classification practices across EU member states regarding the classification of STS gantry cranes and ASC-type automated stacking crane systems. This survey was compiled by Calderwood & Harkness LLP based on publicly available BTI databases, published classification guidance, and information obtained through correspondence with customs administrations in relevant member states.

The key findings of the survey are as follows:

(a) A majority of EU member states that have issued BTI rulings or classification guidance on STS gantry cranes and/or ASC-type systems have classified such equipment under heading 8426 of the Combined Nomenclature.

(b) The Netherlands BTI ruling NL-BTI-2021-01234, issued on June 14, 2021, is the most detailed and directly relevant ruling supporting classification under CN 8426 19 00. That ruling addressed both STS cranes and ASC systems and provided a thorough analysis under the General Interpretive Rules.

(c) The German BTI ruling DE-BTI-2020-05678, issued on September 3, 2020, which reclassified an ASC system under CN 8428 90 90, appears to be an outlier among EU member states. No other member state identified in the survey has adopted the German approach of reclassifying automated cranes from heading 8426 to heading 8428.

(d) Notably, the German ruling was limited in its scope to ASC systems. The German ruling did not address STS gantry cranes, and even under the analytical approach adopted by the German authority, STS gantry crane classification under heading 8426 is not challenged.

(e) The divergence between the Dutch and German rulings underscores the urgent need for a harmonized EU-wide determination by DG TAXUD to ensure consistent application of the Common Customs Tariff across all member states.

The following subsections provide a detailed analysis of the two most directly relevant rulings.

A. Analysis of NL-BTI-2021-01234 (Netherlands)

The Netherlands BTI ruling NL-BTI-2021-01234 was issued by Douane Nederland (the Dutch Customs and Tax Administration, part of the Belastingdienst) on June 14, 2021. The ruling concerned the classification of two categories of port container-handling equipment: a Post-Panamax STS container crane and an automated stacking crane system, both manufactured in South Korea. Although the specific manufacturer and applicant differ from those in the present case, the equipment is functionally and structurally comparable to TSL's Hailong QC-65 and ASC-40R units.

The Dutch customs authority confirmed classification of both machines under CN 8426 19 00. The ruling's reasoning is notable for its thoroughness and analytical rigor:

Application of GIR 1. The Dutch authority began its analysis with GIR 1, which requires classification to be determined according to the terms of the headings and any relative Section or Chapter Notes. The authority found that both the STS crane and the ASC system are "cranes" within the ordinary meaning of heading 8426. The machines lift loads vertically using a trolley-and-rope system suspended from a horizontal boom or gantry — the defining physical characteristic of a crane. This analysis was dispositive: since both machines fall within the terms of heading 8426 under GIR 1, no further analysis under GIRs 2 through 6 was strictly necessary.

Rejection of the automation argument. The Dutch authority expressly considered and rejected the argument that the automation of the ASC system altered its classification. The ruling stated, in relevant part: "The addition of automated control systems does not alter the fundamental mechanical nature of the machine as a crane." The authority emphasized that classification under the HS is based on the objective physical characteristics of the goods, and that the control technology — whether manual, semi-automated, or fully automated — is not a classification-determinative factor.

Alternative analysis under GIR 3(a). In the alternative, the Dutch authority considered whether GIR 3(a) would apply if the machines were deemed prima facie classifiable under both heading 8426 and heading 8428. The authority concluded that heading 8426, which specifically identifies "cranes," provides a more specific description of the machines than heading 8428, which is a residual heading for handling machinery "not elsewhere specified or included." Under GIR 3(a), the more specific heading prevails.

ASC-specific analysis. With respect to the ASC system specifically, the Dutch authority analogized the machine to rail-mounted gantry (RMG) cranes, which have been universally and without controversy classified under heading 8426. The authority observed that the ASC system is, in structural and mechanical terms, an RMG crane equipped with automated control systems. The automation does not transform the machine into something other than a crane; it merely changes the method by which the crane's movements are directed.

TSL submits that the reasoning of the Dutch ruling is correct and should be adopted by DG TAXUD as the basis for a harmonized EU-wide classification.

B. Analysis and Rebuttal of DE-BTI-2020-05678 (Germany)

The German BTI ruling DE-BTI-2020-05678 was issued by the Hauptzollamt Hamburg-Hafen (Hamburg-Port Main Customs Office) on September 3, 2020. The ruling concerned the classification of an automated stacking crane (ASC) system manufactured in China. The Hauptzollamt reclassified the ASC system from heading 8426 to CN 8428 90 90, departing from the prevailing classification practice in other EU member states.

The key reasoning of the German ruling is as follows:

(i) The German authority drew a distinction between "traditional" cranes (heading 8426) and "integrated automated handling systems" (heading 8428), asserting that the ASC system's high degree of automation and integration with terminal operating systems transformed it from a crane into a distinct category of handling machinery.

(ii) The German authority found that the ASC system's primary function was "automated container storage and retrieval management" rather than simple lifting, and that this function was more appropriately described by the general terms of heading 8428 than by the specific term "crane" in heading 8426.

(iii) The ruling placed significant emphasis on the degree of automation, noting that the machine operates without human intervention and that its movements are directed entirely by software algorithms that optimize container placement, retrieval sequencing, and yard utilization.

(iv) The German authority applied Section XVI, Note 3 (principal function analysis for composite machines) and concluded that the principal function of the ASC system was "automated handling and storage" rather than "lifting," which the authority associated with heading 8428 rather than heading 8426.

(v) The German authority distinguished operator-controlled rail-mounted gantry (RMG) cranes, which it acknowledged are classified under heading 8426, from automated ASC systems, asserting that the absence of a human operator fundamentally altered the character of the machine.

TSL respectfully submits that the German ruling is analytically flawed and should not be followed by DG TAXUD. TSL advances the following specific grounds of rebuttal:

1. Conflation of function and use. The German ruling confuses the machine's physical function with its operational use. The physical function of the ASC-40R — and of any gantry crane — is the vertical lifting, horizontal traversing, and controlled lowering of loads. This is a crane function, and it is performed by the same mechanical means (wire ropes, trolley, gantry) regardless of whether the crane is controlled by a human operator or by software. The German authority's characterization of the machine's function as "automated container storage and retrieval management" is not a description of a physical function at all; it is a description of a software-mediated operational management activity. HS classification turns on what the machine is and what it does mechanically, not on the purpose to which it is put or the software that directs its movements.

2. Erroneous principal function analysis. The German authority purported to apply Section XVI, Note 3, which requires composite machines to be classified by reference to their principal function. The authority identified "automated handling and storage" as the principal function. However, "automated handling and storage" is not a physical function of the machine — it is an operational outcome achieved through software direction of the machine's physical functions. The principal physical function of the ASC-40R remains lifting, traversing, and lowering containers by means of a wire rope hoist system suspended from a gantry — which is, by definition, a crane function. Note 3 requires analysis of the machine's function, not its software-mediated purpose.

3. Artificial automation distinction. The German authority's distinction between operator-controlled RMG cranes (heading 8426) and automated ASC systems (heading 8428) is unsupported by the heading text. Heading 8426 covers "cranes" without any condition or limitation based on the presence or absence of a human operator. The heading does not distinguish between manually operated, semi-automated, and fully automated cranes. Moreover, the distinction is practically unworkable: many modern RMG cranes are semi-automated, with varying degrees of automated operation. Some RMG cranes are capable of switching between operator-controlled and fully automated modes. Under the German approach, the same physical machine could be classified under different headings depending on whether its automation software is activated — a result that is wholly inconsistent with the HS principle of classification based on objective physical characteristics at the time of importation.

4. Limited scope. The German ruling addressed only ASC systems. It did not consider or address STS gantry cranes. Even if the German approach to ASC classification were correct (which TSL denies), it would have no bearing on the classification of TSL's 12 STS gantry cranes. The STS gantry crane is universally recognized as a crane, and AADE's reclassification of the STS cranes under heading 8428 goes beyond even the German position.

5. Minority position. As demonstrated by the survey enclosed as Exhibit 2, the German ruling represents a minority view among EU member states. No other member state identified in the survey has adopted the approach of reclassifying automated gantry cranes from heading 8426 to heading 8428. The weight of classification practice across the EU supports classification under heading 8426.

V. WCO HARMONIZED SYSTEM COMMITTEE PRECEDENT

TSL encloses as Exhibit 3 to this submission a summary of relevant classification opinions, decisions, and discussions of the World Customs Organization's Harmonized System Committee relating to the classification of automated cranes and port handling equipment. This summary was prepared by Calderwood & Harkness LLP with the assistance of Dr. Brenner, drawing on Dr. Brenner's first-hand experience as a former member of the HS Committee from 2008 to 2016.

The following key points emerge from the analysis of WCO HS Committee precedent:

First, the WCO HS Committee has considered the classification of automated and semi-automated gantry cranes on multiple occasions over the past two decades and has not adopted any classification opinion reassigning automated cranes from heading 8426 to heading 8428. This is a significant point. The HS Committee is the principal international body responsible for ensuring uniform classification of goods under the Harmonized System, and the absence of any reclassification opinion — notwithstanding extensive discussion of port terminal automation — supports the conclusion that the international consensus is that automated gantry cranes remain classified under heading 8426.

Second, the absence of any reclassification opinion is particularly significant in light of the fact that port terminal automation has expanded dramatically on a global scale over the past twenty years. Major automated container terminals now operate in Europe, Asia, the Middle East, Australia, and the Americas. The HS Committee has had ample opportunity to consider whether automation alters the classification of gantry cranes, and the fact that it has not adopted a reclassification opinion speaks with considerable force to the question before DG TAXUD.

Third, at the HS Committee's 66th Session, the Committee considered a Classification Opinion on "Automated Rail-Mounted Gantry Cranes." The discussion took place within the framework of heading 8426, and the classification was considered within that heading. While the formal Classification Opinion adopted at that session does not constitute a binding determination in the same manner as a classification regulation under EU law, it is highly relevant as evidence of the international understanding of the scope of heading 8426.

Fourth, several WCO classification opinions have treated ship-to-shore container cranes — including large Post-Panamax and Super-Post-Panamax STS cranes — as falling under heading 8426. These classification opinions confirm the well-established understanding that ship-to-shore container cranes, regardless of their size, capacity, or degree of sophistication, are "cranes" within the meaning of heading 8426.

Fifth, the WCO Explanatory Notes to heading 8426 provide a description of the machines covered by the heading. The Explanatory Notes describe machines that lift loads using "ropes, chains, or other lifting gear suspended from a jib, boom, or overhead structure (gantry)." Both the QC-65 STS gantry crane and the ASC-40R automated stacking crane satisfy every element of this description. Each machine lifts loads (containers) using wire ropes suspended from a headblock and trolley assembly that travels along a horizontal beam supported by a gantry (portal frame) structure. The correspondence between the Explanatory Notes description and the physical characteristics of TSL's equipment is precise and complete.

Sixth, by contrast, the WCO Explanatory Notes to heading 8428 describe the heading as covering machinery "not falling in any of the preceding headings of this Chapter." This language confirms the residual character of heading 8428. The Explanatory Notes provide examples of machinery covered by heading 8428, including bucket elevators, pneumatic conveyors, escalators, teleferics (aerial tramways), and ski lifts. These examples are, without exception, fundamentally different from cranes. They are continuous-flow or passive-transport machines that bear no resemblance — in structure, mechanical function, or operational principle — to gantry cranes. The examples provided in the Explanatory Notes to heading 8428 confirm that the heading is intended to cover a distinct category of handling machinery, not machinery that is specifically identified as "cranes" in heading 8426.

VI. THE AUTOMATION QUESTION — CLASSIFICATION PRINCIPLES

The central analytical question presented to DG TAXUD in this consultation is whether full automation transforms a gantry crane, which would otherwise be classified under heading 8426, into "other handling machinery" under heading 8428. TSL submits that it does not, and that the principles of classification under the Harmonized System and the Combined Nomenclature require this conclusion. The following subsections address each of the relevant classification principles in turn.

A. Heading Text Does Not Distinguish by Automation Level

The starting point for any classification analysis is the text of the relevant headings, in accordance with GIR 1. Heading 8426 covers, in relevant part, "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane." The term "cranes" is used without any qualification, limitation, or condition as to the method of control. The heading does not specify "manually operated cranes," "operator-controlled cranes," or "non-automated cranes." It covers "cranes" — full stop.

If the drafters of the Harmonized System had intended to limit heading 8426 to operator-controlled cranes, or to exclude fully automated cranes, they would have so specified. The HS and Combined Nomenclature employ qualifications and conditions extensively throughout the tariff schedule. Where a heading or subheading is intended to be limited to a particular type or configuration of a product, the heading text says so explicitly. The absence of any such limitation in heading 8426 is a deliberate choice that must be given effect.

Furthermore, Section XVI, Note 5 of the Combined Nomenclature provides that, for the purposes of the Section, "references to machines cover, unless the context otherwise requires, both the machines themselves and the parts thereof." More relevantly, the Section's general structure covers both manual and power-operated machines. This principle extends, by logical necessity, to machines that are controlled by human operators, semi-automated systems, or fully automated systems. The method of control is a continuum, not a binary classification-determinative distinction.

B. Objective Characteristics at Time of Importation

It is a fundamental principle of customs classification under the Harmonized System that goods are classified based on their objective physical characteristics as presented to customs at the time of importation. This principle has been consistently affirmed by the Court of Justice of the European Union in cases including Turbon International (Case C-276/00), RUMA (Case C-183/06), and Wierer (Case C-236/11). Classification does not depend on the intended use of the goods, the subjective intentions of the importer, or the software configuration of the machine. It depends on what the machine is, physically and mechanically, at the time it crosses the customs frontier.

Applied to the present case, this principle requires examination of the physical characteristics of the ASC-40R at the time of importation. Those characteristics are clear and undisputed:

• A gantry (portal frame) structure of welded steel construction, traveling on steel rails;

• A trolley assembly traveling on a horizontal beam supported by the gantry;

• A wire rope hoist system with multiple reeving, headblock, and telescoping container spreader;

• Rail-mounted travel mechanisms for gantry movement along the container stack;

• Electrical power supply via bus bars or cable reels.

These are the physical characteristics of a gantry crane. They are identical to those of a traditional, operator-controlled RMG crane. The HaiControl Suite v4.2 software — which receives instructions from the terminal operating system, calculates optimal container placement and retrieval sequences, and directs the crane's movements — is a control system. It is not a structural or mechanical characteristic of the machine. The software does not alter the gantry, the trolley, the wire ropes, or the spreader. It tells the machine what to do; the machine does it using the same mechanical means as any other gantry crane.

The analogy to power source is instructive. A diesel-powered crane and an electrically powered crane are both cranes. The power source is a characteristic of the machine, but it does not alter the heading-level classification. Similarly, an operator-controlled crane and a computer-controlled crane are both cranes. The control system is a characteristic of the machine, but it does not alter the heading-level classification.

C. Technological Evolution Does Not Alter Classification

The Harmonized System has historically maintained classification stability as machines evolve technologically. The HS does not reclassify machines each time a new technology is incorporated into their design or operation. If it did, the tariff schedule would be in constant flux, and the commercial certainty that is the principal purpose of the HS would be fatally undermined.

The most directly analogous precedent is the classification of computer numerical control (CNC) machine tools. A CNC lathe is a lathe in which all operations — workpiece rotation, tool positioning, feed rate, depth of cut — are controlled by a computer program rather than by a human operator. Despite this full automation, CNC lathes remain classified as "lathes" under heading 8458. They are not reclassified as "other machine tools" under the residual heading 8479. The addition of computer control changes the method by which the machine is operated; it does not change what the machine is.

Similarly, a motor vehicle equipped with autonomous driving technology — self-driving capabilities using LIDAR, radar, cameras, GPS, and artificial intelligence — remains classified as a "motor car" under heading 8703. The addition of autonomous driving technology does not transform the vehicle into "other handling machinery" under heading 8428 or some other residual heading. The vehicle is still a motor car; it is merely controlled by software rather than by a human driver.

The principle is clear and consistent: technological evolution in the method of control does not alter the fundamental classification of a machine. An automated crane is still a crane.

D. Section XVI, Note 3 — Principal Function

Even if the ASC-40R were to be characterized as a "composite machine" performing both crane functions (heading 8426) and automated handling/storage functions (heading 8428) — a characterization that TSL does not accept, but addresses in the alternative — Section XVI, Note 3 of the Combined Nomenclature would require classification by reference to the machine's principal function. Note 3 provides:

"Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine whose function is principal."

The principal function of the ASC-40R is the physical lifting, horizontal traversing, and controlled lowering of containers. This is a crane function, squarely within heading 8426. The machine accomplishes this function using precisely the same mechanical means as any other gantry crane: wire ropes, a trolley, a headblock, a spreader, and a gantry structure.

The software-driven functions that the German ruling characterized as the "principal function" — stacking optimization, yard management, predictive maintenance, container sequencing — are not physical functions of the machine at all. They are computational operations performed by software. The software tells the crane where to place a container, when to retrieve it, and in what sequence to perform operations. But the physical action — the lifting, traversing, and lowering of containers — is performed by the crane mechanism and constitutes the machine's principal function.

To put the point differently: the software directs the crane; the crane performs the lifting. The principal function of the machine is what the machine physically does — lift containers by wire ropes from a gantry. The software's role in determining the optimal container placement is ancillary to this principal physical function. Without the crane mechanism, the software would have nothing to direct. Without the software, the crane mechanism could still lift containers (albeit less efficiently).

Under Note 3, the principal function analysis thus confirms classification under heading 8426.

VII. ECONOMIC AND COMMERCIAL SIGNIFICANCE

While TSL recognizes that classification under the Combined Nomenclature must be determined on the basis of the applicable legal rules and classification principles rather than on the basis of economic considerations alone, TSL respectfully draws DG TAXUD's attention to the significant commercial implications of the classification question at issue, which underscore the urgency and importance of achieving a harmonized determination.

The classification of STS gantry cranes and ASC systems directly affects port terminal operators across the European Union. The EU's major container ports — including Rotterdam, Antwerp, Hamburg, Piraeus, Valencia, Algeciras, Bremerhaven, Felixstowe, Gdańsk, and Gioia Tauro — have invested heavily in automated container-handling equipment over the past two decades. The global trend toward port terminal automation is well documented, driven by the need for increased throughput capacity, improved operational efficiency, enhanced safety, and reduced labour costs. Automated stacking cranes and semi-automated STS cranes are now standard equipment at modern container terminals worldwide.

The current classification uncertainty creates significant unpredictability in customs obligations and economic planning for EU port terminal operators. An operator investing in automated container-handling equipment cannot reliably predict whether the equipment will be subject to 0% duty (under heading 8426) or 2.2% duty (under heading 8428, CN 8428 90 90). For large-scale terminal development projects involving tens or hundreds of millions of euros in equipment investment, this uncertainty can translate into millions of euros in unpredictable duty liability.

A uniform EU-wide classification is essential for the following reasons:

(a) Predictability and legal certainty for EU importers. Port terminal operators, shipping lines, and logistics companies must be able to predict their customs obligations with reasonable certainty when planning major capital investments. The current divergence between member state rulings undermines this predictability.

(b) Stability of customs obligations in the port logistics sector. The port logistics sector operates on thin margins and long investment horizons. Terminal concession agreements and equipment procurement contracts typically span 20 to 30 years. Classification certainty is essential for accurate financial modelling, investment appraisal, and long-term planning.

(c) Consistent application of the Common Customs Tariff across all member states. The Common Customs Tariff is a cornerstone of the EU customs union. Its purpose is to ensure that the same goods are subject to the same duty obligations regardless of the member state through which they are imported. The divergence between the Dutch and German rulings defeats this purpose.

(d) Prevention of distortions of competition. If automated container-handling equipment is classified under heading 8426 (0% duty) in some member states and under heading 8428 (2.2% duty) in others, terminal operators in different member states will face different duty obligations for identical equipment. This creates a competitive distortion, favouring operators who import through member states applying the lower classification and penalizing those who import through member states applying the higher classification. Such distortions are precisely what the EU customs union and the BTI harmonization mechanism are designed to prevent.

The divergence between the Dutch ruling (NL-BTI-2021-01234) and the German ruling (DE-BTI-2020-05678) creates precisely the kind of inconsistency that the BTI harmonization mechanism under Article 34(10) of the Union Customs Code is designed to resolve. TSL respectfully urges DG TAXUD to exercise its authority under this provision to establish a uniform classification across all EU member states.

VIII. REQUESTED OUTCOME

In light of the foregoing, TSL respectfully requests that DG TAXUD take the following actions:

1. Confirm the classification of STS gantry cranes and ASC systems under heading 8426. TSL requests that DG TAXUD confirm that ship-to-shore (STS) gantry cranes, including the Hailong QC-65, and automated stacking crane (ASC) systems, including the Hailong ASC-40R, are properly classified under heading 8426 of the Combined Nomenclature, specifically under subheading CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"), at a most-favoured-nation (MFN) duty rate of 0%.

2. Provide appropriate guidance to ensure uniform application of this classification across all EU member states' customs authorities. TSL requests that DG TAXUD consider the most appropriate mechanism for ensuring uniform application, which may include:

(a) Issuing a classification regulation under Article 57(4) of the Union Customs Code and Article 9 of Regulation (EU) No. 2446/2015 (Delegated Act), establishing a binding and uniform classification of STS gantry cranes and ASC systems under CN 8426 19 00;

(b) Providing classification guidance through the Customs Code Committee, Section for Tariff and Statistical Nomenclature, to be communicated to all national customs authorities; or

(c) Issuing an advisory opinion to AADE directing the issuance of a Binding Tariff Information ruling consistent with classification under heading 8426.

3. Address and resolve the analytical divergence between the Dutch and German approaches. TSL requests that DG TAXUD specifically address the question of whether the degree of automation is a relevant factor in determining whether machinery falls under heading 8426 or heading 8428 of the Combined Nomenclature, and confirm that automation is not a classification-determinative factor for purposes of distinguishing between these two headings.

IX. AVAILABILITY AND COOPERATION

TSL, through its undersigned counsel, remains at DG TAXUD's full disposal for any questions, requests for additional documentation, requests for clarification, or invitations for oral submissions that may arise in the course of DG TAXUD's review of this submission and the underlying BTI application.

TSL is prepared to make its technical personnel available to provide further details regarding the design, manufacture, and operation of the equipment at issue. In particular, Mr. Dimitrios Sarantopoulos, TSL's Vice President for Procurement and Supply Chain, who oversaw the procurement of the Hailong equipment and possesses detailed knowledge of the equipment's technical specifications and operational deployment, is available for consultation. Additionally, TSL is prepared to facilitate the participation of Hailong Heavy Industries' technical staff, including design engineers and automation specialists, to provide any additional technical information that DG TAXUD may require.

TSL will cooperate fully with any inquiry, consultation process, or fact-finding procedure undertaken by DG TAXUD in connection with this matter. TSL recognizes the importance of providing DG TAXUD with complete and accurate information and commits to responding promptly to any such requests.

Respectfully submitted,

CALDERWOOD & HARKNESS LLP

By: ________

Christy Bauer Senior Associate Calderwood & Harkness LLP Avenue Louise 480, 1050 Brussels, Belgium Tel: +32 (0)2 643 7812

Email: christy.bauer@calderwoodharkness.com

Date: March 15, 2023

VOURNAS & THEODORAKIS DIKIGIRIKO GRAFEIO

By: ________

Alexandros Vournas Managing Partner Vournas & Theodorakis Dikigiriko Grafeio 22 Academias Street, 106 71 Athens, Greece Athens Bar Association Registration No. 18744 Tel: +30 210 362 4800

Email: a.vournas@vournaslaw.gr

Date: March 15, 2023

On behalf of Thalassa Shipping & Logistics Société Anonyme EORI No. GR094827361000

ENCLOSURES / EXHIBITS

The following exhibits are enclosed with this submission and incorporated herein by reference:

cc:

Aikaterini Vlachopoulou, Chief Customs Auditor, AADE Piraeus Regional Customs Office, 2 Karaoli & Dimitriou Street, 185 31 Piraeus, Greece

Panagiotis Drakos, Senior Partner, Meridian & Drakos Dikigiriko Grafeio, 15 Stadiou Street, 105 62 Athens, Greece (AADE external legal advisor)

James Prentice, Partner, Calderwood & Harkness LLP (Responsible Partner, C&H Matter No. C&H-2022-ITS-04781)

Nikolaos Andreadis, Chairman & CEO, Thalassa Shipping & Logistics SA, 47 Akti Miaouli, 185 35 Piraeus, Greece

Elena Papadimitriou, CFO, Thalassa Shipping & Logistics SA, 47 Akti Miaouli, 185 35 Piraeus, Greece

Contract Reference	Date	Equipment	Quantity	Declared CIF Value	Unit Price
HHI-TSL-2019-001	January 15, 2019	STS Gantry Cranes (Model QC-65)	12	€38,400,000	€3,200,000
HHI-TSL-2019-002	March 22, 2019	RTG Cranes (Model RTG-40E)	18	€25,200,000	€1,400,000
HHI-TSL-2020-003	June 10, 2020	ASC Systems (Model ASC-40R)	8	€28,800,000	€3,600,000
HHI-TSL-2021-004	February 28, 2021	Spare parts, software licenses, commissioning services (bundled)	—	€5,600,000	—
Total	47 units + spares	€98,000,000
Exhibit	Description
Exhibit 1	Expert Opinion of Dr. Lukas Brenner, Managing Director, Argonaut Trade Consulting GmbH, Friedrichstraße 191, 10117 Berlin, Germany — Independent classification analysis of the Hailong QC-65 STS Gantry Crane and Hailong ASC-40R Automated Stacking Crane under the Combined Nomenclature, with detailed technical comparison and analysis of WCO precedent (dated March 10, 2023; 42 pages, including technical annexes and diagrams)
Exhibit 2	Survey of EU Member State BTI Rulings and Classification Practices on STS Cranes and ASC Systems — Compiled by Calderwood & Harkness LLP (dated March 12, 2023; covering rulings and classification guidance from 14 EU member states)
Exhibit 3	Summary of WCO Harmonized System Committee Precedent on Automated Cranes and Port Handling Equipment — Including reference to HS Committee 66th Session Classification Opinion on "Automated Rail-Mounted Gantry Cranes" and analysis of relevant WCO Explanatory Notes (dated March 13, 2023; 28 pages)

CALDERWOOD & HARKNESS LLP Avenue Louise 480 1050 Brussels, Belgium Tel: +32 (0)2 643 7800
Fax: +32 (0)2 643 7801
www.calderwoodharkness.com
March 15, 2023
European Commission Directorate-General for Taxation and Customs Union (DG TAXUD) Classification Policy Unit — TAXUD.A.3 Rue de la Loi 200 1049 Brussels, Belgium
Transmitted via: Independent Authority for Public Revenue (AADE) Directorate of Customs Compliance and Audit 2 Karaoli & Dimitriou Street 185 31 Piraeus, Greece
Re: Supplemental Submission in Support of BTI Application BTI-GR-2022-003847 — Thalassa Shipping & Logistics SA — Classification of Ship-to-Shore Gantry Cranes and Automated Stacking Cranes Under the Combined Nomenclature
Dear Members of the Classification Policy Unit,
We write on behalf of our client, Thalassa Shipping & Logistics Société Anonyme ("TSL"), EORI No. GR094827361000, a company organized under the laws of the Hellenic Republic, with its registered office at 47 Akti Miaouli, 185 35 Piraeus, Greece, in connection with Binding Tariff Information Application BTI-GR-2022-003847, which was filed with the Independent Authority for Public Revenue ("AADE") on November 15, 2022. As DG TAXUD is aware, the application was referred to this Directorate-General for consultation on February 7, 2023, pursuant to Article 34(10) of Regulation (EU) No. 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (the "UCC"). The referral was prompted by the existence of divergent Binding Tariff Information rulings among EU member states concerning materially identical goods — specifically, ruling NL-BTI-2021-01234, issued by the Dutch Customs and Tax Administration on June 14, 2021, which classified ship-to-shore ("STS") gantry cranes and automated stacking crane ("ASC") systems under CN 8426 19 00, and ruling DE-BTI-2020-05678, issued by the Hauptzollamt Hamburg-Hafen on September 3, 2020, which classified an ASC system under CN 8428 90 90.
This supplemental submission is intended to supplement and expand upon the legal arguments set forth in Annex C of the original BTI application, and to provide DG TAXUD with additional materials — including a supplemental expert opinion, a survey of member state classification practices, and an analysis of relevant World Customs Organization ("WCO") precedent — to assist the Directorate-General in reaching a harmonized classification determination.
This submission is filed jointly by Christy Bauer, Senior Associate at Calderwood & Harkness LLP, Brussels office, and Alexandros Vournas, Managing Partner at Vournas & Theodorakis Dikigiriko Grafeio, 22 Academias Street, 106 71 Athens, Greece (Athens Bar Association Registration No. 18744), who serves as TSL's local Greek counsel retained by Calderwood & Harkness in connection with this matter. This matter is designated internally as C&H Matter No. C&H-2022-ITS-04781.
I. BACKGROUND AND PROCEDURAL HISTORY
A. The Applicant
Thalassa Shipping & Logistics Société Anonyme ("TSL") is a Greek société anonyme (Ανώνυμη Εταιρεία, or "A.E.") incorporated and existing under the laws of the Hellenic Republic, registered with the Piraeus Commercial Registry under Registration No. 78214/06/B/09/42 and holding Greek Tax Identification Number (AFM) 094827361. TSL was founded in 2009 and has since grown into one of Greece's leading integrated shipping and logistics enterprises. The company currently employs approximately 1,450 persons across its operations in Greece, Cyprus, and Romania, and reported annual revenue of €387.2 million for fiscal year 2021.
TSL's core business activities encompass container shipping, port terminal operations, freight forwarding, and marine equipment services. The company operates a fleet of 28 container vessels engaged in both intra-Mediterranean and intercontinental trade routes. Of particular relevance to the present matter, TSL manages terminal operations at three Greek ports — Piraeus, Thessaloniki, and Volos — under long-term concession agreements entered into with the respective port authorities. These terminal operations require substantial ongoing capital investment in specialized marine cargo-handling equipment, including the equipment at issue in this BTI application.
TSL's Chairman and Chief Executive Officer is Mr. Nikolaos Andreadis, who has served in that capacity since the company's founding in 2009.
B. The Imported Equipment
Between March 2019 and January 2022, TSL imported a total of 47 units of specialized marine cargo-handling equipment manufactured by Hailong Heavy Industries Co., Ltd. (海龙重工有限公司), a company registered and operating in the People's Republic of China, with its principal manufacturing facility located at No. 288 Gangkou Road, Zhenhai District, Ningbo, Zhejiang Province 315200, PRC (Unified Social Credit Code: 91330211MA2GR8KT5X). Hailong Heavy Industries is a leading global manufacturer of port and marine equipment, including ship-to-shore container cranes, rubber-tyred gantry cranes, rail-mounted gantry cranes, automated stacking cranes, and ancillary port automation systems.
All 47 units of equipment were imported through the Port of Piraeus and cleared through the Piraeus Regional Customs Office of AADE. Customs entries were filed on TSL's behalf by Peloros Customs Agency S.A. (EORI: GR801234567000), TSL's licensed customs broker, which has acted in that capacity for TSL since 2012.
The equipment was imported pursuant to four master purchase contracts between TSL and Hailong Heavy Industries, the relevant details of which are set forth below:
It is important to note at the outset that the classification dispute at issue in this BTI application concerns only 20 of the 47 imported units — specifically, the 12 STS gantry cranes imported under Contract HHI-TSL-2019-001 and the 8 ASC systems imported under Contract HHI-TSL-2020-003. The total declared CIF customs value of the equipment in dispute is €67,200,000. The 18 rubber-tyred gantry ("RTG") cranes imported under Contract HHI-TSL-2019-002 are not subject to any classification dispute; both TSL and AADE agree that the RTG cranes are properly classified under CN 8426 41 00 ("Self-propelled [machinery], on tyres"). The spare parts, software, and commissioning services imported under Contract HHI-TSL-2021-004 are likewise not the subject of the present dispute, as their classification follows that of the principal equipment to which they relate.
C. The Classification Dispute
At the time of importation, TSL classified all of the equipment — including the 12 STS gantry cranes and 8 ASC systems — under CN 8426 41 00, the subheading for "Self-propelled [machinery], on tyres" within heading 8426 of the Combined Nomenclature. TSL now acknowledges in this BTI application that the specific subheading 8426 41 00 is technically inaccurate for the STS gantry cranes and ASC systems, as these machines are rail-mounted rather than self-propelled on tyres. TSL accordingly requests, as part of this BTI application, correction of the subheading classification to CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"), which is the appropriate subheading within heading 8426 for rail-mounted gantry cranes. This correction has no duty impact, as all subheadings within heading 8426 carry a most-favoured-nation ("MFN") duty rate of 0% under the Common Customs Tariff.
The dispute with AADE arises from a post-clearance audit conducted by AADE's Directorate of Customs Compliance and Audit. The audit was initiated under file reference AADE/DTE/2022/PIR-04518 on April 4, 2022, and completed on August 1, 2022. Upon completion of the audit, AADE issued Additional Duty Assessment Notice AADE/ADAN/2022/0073, dated August 12, 2022 (the "Assessment Notice"), in which AADE reclassified the 12 STS gantry cranes and 8 ASC systems from heading 8426 to CN 8428 90 90 — the residual subheading of heading 8428, covering "Other lifting, handling, loading, or unloading machinery" not specified elsewhere in Chapter 84. The MFN duty rate applicable to CN 8428 90 90 is 2.2%.
The additional customs duty assessed under the Assessment Notice is calculated as follows:
Reclassified customs value: €67,200,000 MFN duty rate (CN 8428 90 90): 2.2% Additional duty assessed: €1,478,400
TSL filed an administrative objection to the Assessment Notice with AADE's Directorate of Resolution of Disputes ("DED") on November 30, 2022. By agreement between TSL and AADE, formalized in a standstill agreement dated March 1, 2023, the DED proceedings have been held in abeyance pending the resolution of the BTI application and, specifically, the outcome of DG TAXUD's consultation under Article 34(10) UCC.
D. The BTI Application and Referral
BTI Application BTI-GR-2022-003847 was filed with AADE on November 15, 2022, seeking a binding tariff information ruling confirming that both the 12 STS gantry cranes (Hailong Model QC-65) and the 8 ASC systems (Hailong Model ASC-40R) are properly classified under CN 8426 19 00 as "other overhead travelling cranes, transporter cranes, gantry cranes" within heading 8426.
The BTI application was supported by three principal annexes:
(a) Technical Annex — containing detailed equipment descriptions, engineering specifications, photographs, and schematic drawings for both the QC-65 STS gantry crane and the ASC-40R automated stacking crane;
(b) Legal Argument Annex — setting forth TSL's classification analysis under the General Interpretive Rules ("GIRs"), the relevant Section and Chapter Notes of the Combined Nomenclature, and the applicable WCO Explanatory Notes; and
(c) Expert Opinion of Dr. Lukas Brenner — an independent classification opinion prepared by Dr. Brenner, Managing Director of Argonaut Trade Consulting GmbH, Berlin, Germany, a recognized expert in customs classification of industrial machinery and former member of the WCO Harmonized System Committee.
On February 7, 2023, AADE referred the BTI application to DG TAXUD for consultation under Article 34(10) of the UCC, citing the existence of divergent Binding Tariff Information rulings issued by the customs authorities of other EU member states in respect of materially identical goods. Specifically, the referral identified the divergence between:
•  BTI Ruling NL-BTI-2021-01234, issued by the Dutch Customs and Tax Administration (Douane Nederland, Belastingdienst) on June 14, 2021, which classified both STS cranes and ASC systems under CN 8426 19 00; and
•  BTI Ruling DE-BTI-2020-05678, issued by the Hauptzollamt Hamburg-Hafen (Hamburg-Port Main Customs Office) on September 3, 2020, which classified an ASC system under CN 8428 90 90.
The referral to DG TAXUD under Article 34(10) UCC triggers the consultation mechanism designed to ensure uniform application of the Common Customs Tariff across all member states of the European Union. TSL respectfully submits this supplemental submission to assist DG TAXUD in its deliberations.
II. SUMMARY OF TSL'S CLASSIFICATION POSITION
TSL submits that both the STS gantry cranes (Hailong Model QC-65) and the ASC systems (Hailong Model ASC-40R) are properly classified under heading 8426 of the Combined Nomenclature, specifically under subheading CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"). Heading 8426, in relevant part, covers "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane." Both machines fall squarely within the term "cranes" as used in this heading, and more specifically within the concept of "gantry cranes" identified in the subheading text.
The classification turns on the machines' objective physical characteristics at the time of importation. Both the QC-65 STS gantry crane and the ASC-40R automated stacking crane share the following core physical and structural characteristics that are universally associated with, and definitional of, gantry cranes:
(a) a gantry (portal frame) structure — a large steel structural frame supported on legs that travel on rails, creating an open portal through which containers and transport vehicles can pass;
(b) a trolley traveling on a horizontal boom or crossbeam — a wheeled carriage that traverses the horizontal beam of the gantry, carrying the hoist mechanism and allowing horizontal movement of the load;
(c) a wire rope hoist system with headblock and spreader — multiple wire rope reeving, a headblock assembly, and a telescoping container spreader that locks onto the corner castings of standardized intermodal containers; and
(d) the capability for vertical lifting and horizontal traversing of loads (containers) — the fundamental crane function of raising a load from one position, moving it horizontally, and lowering it to another position.
These physical characteristics are identical to those of traditional gantry cranes that have been universally and without controversy classified under heading 8426 since the inception of the Harmonized System in 1988. The QC-65 STS gantry crane and the ASC-40R automated stacking crane are, in all material structural and mechanical respects, gantry cranes.
TSL recognizes that the ASC-40R differs from the QC-65 in one significant respect: the degree of automation. The QC-65 STS gantry crane is semi-automated, with an operator present in a cab who controls certain crane movements while other functions are automated. The ASC-40R is fully automated, operating without a human operator in a cab, with all crane movements directed by the HaiControl Suite v4.2 software system in conjunction with sensor arrays (LIDAR, DGPS, optical container recognition). However, TSL submits that this distinction — the degree of automation — does not alter the heading-level classification, for the following reasons:
(i) Heading 8426 covers "cranes" without qualification as to whether the crane is manually operated, semi-automated, or fully automated. The heading text imposes no condition or limitation based on the method of control or the presence or absence of a human operator.
(ii) The Harmonized System and the Combined Nomenclature classify goods based on their objective physical characteristics — their structure, design, and mechanical function — not based on the control technology or software that directs their operation. The physical characteristics of the ASC-40R at the time of importation are those of a gantry crane.
(iii) Section XVI, Note 5 of the Combined Nomenclature provides that references to machines in Section XVI cover both manual and power-operated machines. This Note reflects the broader principle that the manner of control or operation does not determine heading-level classification within Section XVI.
By contrast, heading 8428 is a residual heading that covers "Other lifting, handling, loading, or unloading machinery (for example, lifts, escalators, conveyors, teleferics)." The critical words in this heading are "other" and the parenthetical examples. The heading applies only to lifting, handling, loading, or unloading machinery that is not elsewhere specified or included in Chapter 84. Since STS gantry cranes and ASC systems are "cranes" within the meaning of heading 8426, they are "elsewhere specified" in Chapter 84, and heading 8428 cannot apply.
Furthermore, to the extent any ambiguity exists as to whether the ASC-40R is more specifically described by heading 8426 or heading 8428, General Interpretive Rule 3(a) resolves the question in favour of heading 8426. GIR 3(a) provides that, when goods are prima facie classifiable under two or more headings, "the heading which provides the most specific description shall be preferred to headings providing a more general description." Heading 8426, which specifically identifies "cranes" by name, provides a more specific description of these machines than heading 8428, which is a catch-all for "other" handling machinery.
III. ADDITIONAL EXPERT OPINION OF DR. LUKAS BRENNER
TSL encloses as Exhibit 1 to this submission a supplemental expert opinion prepared by Dr. Lukas Brenner, Managing Director of Argonaut Trade Consulting GmbH, Friedrichstraße 191, 10117 Berlin, Germany. This opinion supplements and expands upon the initial expert opinion of Dr. Brenner submitted as part of the original BTI application.
Dr. Brenner is one of Europe's foremost authorities on the customs classification of industrial machinery. His qualifications include the following:
•  Dr. Brenner served as a member of the World Customs Organization's Harmonized System Committee from 2008 to 2016, representing the Federal Republic of Germany. During his tenure on the Committee, he participated in the consideration of numerous classification opinions concerning machinery of Chapter 84 and Chapter 85, including automated industrial equipment.
•  Dr. Brenner holds a doctorate (Dr.-Ing.) in mechanical engineering from the Technische Universität München, with a doctoral thesis on structural dynamics of heavy lifting equipment.
•  Dr. Brenner has over 20 years of professional experience in customs classification of industrial machinery, having served in the German customs administration before entering private consulting practice. He has provided expert opinions in classification disputes before national courts and customs authorities in Germany, the Netherlands, Belgium, France, and Italy, as well as before the General Court of the European Union.
In his supplemental opinion, Dr. Brenner reaches the following principal conclusions:
First, Dr. Brenner confirms that both the Hailong QC-65 STS gantry crane and the Hailong ASC-40R automated stacking crane are "cranes" within the meaning of heading 8426 of the Harmonized System, based on their mechanical structure and physical function. In Dr. Brenner's expert assessment, the question is not a close one: both machines exhibit every defining physical characteristic of a gantry crane, and would be universally recognized as cranes by any qualified mechanical engineer.
Second, Dr. Brenner identifies the core lifting mechanism common to both machines — wire ropes reeved through sheaves, a headblock assembly, a container spreader, a trolley traveling on a horizontal beam, all supported by a gantry (portal frame) structure — and concludes that this mechanism is the defining characteristic of a crane as that term is used in heading 8426 and as understood in both ordinary and engineering usage. The core lifting mechanism of the ASC-40R is identical to that of the QC-65 and, indeed, to that of traditional rail-mounted gantry (RMG) cranes that have been classified under heading 8426 without controversy for decades.
Third, Dr. Brenner addresses the role of the automated control systems in the ASC-40R, including the HaiControl Suite v4.2 software platform, the LIDAR-based obstacle detection system, the Differential Global Positioning System (DGPS) for precise crane positioning, and the optical container recognition system. Dr. Brenner concludes that these systems constitute control systems — they direct the movements of the crane — but they do not alter the fundamental mechanical nature of the machine. The ASC-40R remains, in Dr. Brenner's words, "a gantry crane in every structural and mechanical respect, the movements of which happen to be directed by software rather than by a human operator manipulating joysticks in a cab."
Fourth, Dr. Brenner notes that the WCO Harmonized System Committee has not adopted any classification opinion reassigning automated gantry cranes from heading 8426 to heading 8428. Dr. Brenner considers this absence significant, given that port terminal automation has been a global trend for over twenty years and the HS Committee has had ample opportunity to address the issue. The absence of any reclassification opinion strongly supports the conclusion that the existing consensus among customs administrations worldwide is that automated gantry cranes remain classified under heading 8426.
Fifth, Dr. Brenner provides a detailed analysis of the German BTI ruling DE-BTI-2020-05678 and concludes that the ruling is analytically flawed. In his assessment, the German authority erred in treating automation as a classification-determinative factor. The German ruling, according to Dr. Brenner, conflates the machine's physical function (lifting containers by means of a wire rope hoist system suspended from a gantry) with its software-driven operational management (automated stacking optimization, yard management algorithms, and predictive sequencing). Classification under the HS turns on what the machine is and what it does mechanically, not on the sophistication of the software that directs its movements.
Sixth, Dr. Brenner's opinion includes a detailed side-by-side technical comparison of the QC-65 STS gantry crane and the ASC-40R automated stacking crane. This comparison demonstrates that the only material differences between the two machines are: (1) the presence of an operator cabin on the QC-65, which is absent from the ASC-40R; and (2) the degree of automation — the QC-65 is semi-automated, while the ASC-40R is fully automated. Neither of these differences is relevant to heading-level classification. The structural components, the mechanical lifting system, the rail-mounted gantry configuration, and the physical operation (vertical lift, horizontal traverse, vertical lower) are identical.
Seventh, Dr. Brenner confirms that, in both ordinary usage and established engineering terminology, a gantry-mounted machine that lifts loads using a trolley and wire rope system suspended from a horizontal beam is universally referred to as a "crane." The term "crane" is not limited to operator-controlled machines; engineers and manufacturers routinely describe and market automated machines with these characteristics as "automated cranes" or "automated stacking cranes." The designation "crane" in the product name of the ASC-40R — "Automated Stacking Crane" — reflects this universal understanding.
IV. SURVEY OF EU MEMBER STATE BTI RULINGS AND CLASSIFICATION PRACTICE
TSL encloses as Exhibit 2 to this submission a comprehensive survey of Binding Tariff Information rulings and national classification practices across EU member states regarding the classification of STS gantry cranes and ASC-type automated stacking crane systems. This survey was compiled by Calderwood & Harkness LLP based on publicly available BTI databases, published classification guidance, and information obtained through correspondence with customs administrations in relevant member states.
The key findings of the survey are as follows:
(a) A majority of EU member states that have issued BTI rulings or classification guidance on STS gantry cranes and/or ASC-type systems have classified such equipment under heading 8426 of the Combined Nomenclature.
(b) The Netherlands BTI ruling NL-BTI-2021-01234, issued on June 14, 2021, is the most detailed and directly relevant ruling supporting classification under CN 8426 19 00. That ruling addressed both STS cranes and ASC systems and provided a thorough analysis under the General Interpretive Rules.
(c) The German BTI ruling DE-BTI-2020-05678, issued on September 3, 2020, which reclassified an ASC system under CN 8428 90 90, appears to be an outlier among EU member states. No other member state identified in the survey has adopted the German approach of reclassifying automated cranes from heading 8426 to heading 8428.
(d) Notably, the German ruling was limited in its scope to ASC systems. The German ruling did not address STS gantry cranes, and even under the analytical approach adopted by the German authority, STS gantry crane classification under heading 8426 is not challenged.
(e) The divergence between the Dutch and German rulings underscores the urgent need for a harmonized EU-wide determination by DG TAXUD to ensure consistent application of the Common Customs Tariff across all member states.
The following subsections provide a detailed analysis of the two most directly relevant rulings.
A. Analysis of NL-BTI-2021-01234 (Netherlands)
The Netherlands BTI ruling NL-BTI-2021-01234 was issued by Douane Nederland (the Dutch Customs and Tax Administration, part of the Belastingdienst) on June 14, 2021. The ruling concerned the classification of two categories of port container-handling equipment: a Post-Panamax STS container crane and an automated stacking crane system, both manufactured in South Korea. Although the specific manufacturer and applicant differ from those in the present case, the equipment is functionally and structurally comparable to TSL's Hailong QC-65 and ASC-40R units.
The Dutch customs authority confirmed classification of both machines under CN 8426 19 00. The ruling's reasoning is notable for its thoroughness and analytical rigor:
Application of GIR 1. The Dutch authority began its analysis with GIR 1, which requires classification to be determined according to the terms of the headings and any relative Section or Chapter Notes. The authority found that both the STS crane and the ASC system are "cranes" within the ordinary meaning of heading 8426. The machines lift loads vertically using a trolley-and-rope system suspended from a horizontal boom or gantry — the defining physical characteristic of a crane. This analysis was dispositive: since both machines fall within the terms of heading 8426 under GIR 1, no further analysis under GIRs 2 through 6 was strictly necessary.
Rejection of the automation argument. The Dutch authority expressly considered and rejected the argument that the automation of the ASC system altered its classification. The ruling stated, in relevant part: "The addition of automated control systems does not alter the fundamental mechanical nature of the machine as a crane." The authority emphasized that classification under the HS is based on the objective physical characteristics of the goods, and that the control technology — whether manual, semi-automated, or fully automated — is not a classification-determinative factor.
Alternative analysis under GIR 3(a). In the alternative, the Dutch authority considered whether GIR 3(a) would apply if the machines were deemed prima facie classifiable under both heading 8426 and heading 8428. The authority concluded that heading 8426, which specifically identifies "cranes," provides a more specific description of the machines than heading 8428, which is a residual heading for handling machinery "not elsewhere specified or included." Under GIR 3(a), the more specific heading prevails.
ASC-specific analysis. With respect to the ASC system specifically, the Dutch authority analogized the machine to rail-mounted gantry (RMG) cranes, which have been universally and without controversy classified under heading 8426. The authority observed that the ASC system is, in structural and mechanical terms, an RMG crane equipped with automated control systems. The automation does not transform the machine into something other than a crane; it merely changes the method by which the crane's movements are directed.
TSL submits that the reasoning of the Dutch ruling is correct and should be adopted by DG TAXUD as the basis for a harmonized EU-wide classification.
B. Analysis and Rebuttal of DE-BTI-2020-05678 (Germany)
The German BTI ruling DE-BTI-2020-05678 was issued by the Hauptzollamt Hamburg-Hafen (Hamburg-Port Main Customs Office) on September 3, 2020. The ruling concerned the classification of an automated stacking crane (ASC) system manufactured in China. The Hauptzollamt reclassified the ASC system from heading 8426 to CN 8428 90 90, departing from the prevailing classification practice in other EU member states.
The key reasoning of the German ruling is as follows:
(i) The German authority drew a distinction between "traditional" cranes (heading 8426) and "integrated automated handling systems" (heading 8428), asserting that the ASC system's high degree of automation and integration with terminal operating systems transformed it from a crane into a distinct category of handling machinery.
(ii) The German authority found that the ASC system's primary function was "automated container storage and retrieval management" rather than simple lifting, and that this function was more appropriately described by the general terms of heading 8428 than by the specific term "crane" in heading 8426.
(iii) The ruling placed significant emphasis on the degree of automation, noting that the machine operates without human intervention and that its movements are directed entirely by software algorithms that optimize container placement, retrieval sequencing, and yard utilization.
(iv) The German authority applied Section XVI, Note 3 (principal function analysis for composite machines) and concluded that the principal function of the ASC system was "automated handling and storage" rather than "lifting," which the authority associated with heading 8428 rather than heading 8426.
(v) The German authority distinguished operator-controlled rail-mounted gantry (RMG) cranes, which it acknowledged are classified under heading 8426, from automated ASC systems, asserting that the absence of a human operator fundamentally altered the character of the machine.
TSL respectfully submits that the German ruling is analytically flawed and should not be followed by DG TAXUD. TSL advances the following specific grounds of rebuttal:
1. Conflation of function and use. The German ruling confuses the machine's physical function with its operational use. The physical function of the ASC-40R — and of any gantry crane — is the vertical lifting, horizontal traversing, and controlled lowering of loads. This is a crane function, and it is performed by the same mechanical means (wire ropes, trolley, gantry) regardless of whether the crane is controlled by a human operator or by software. The German authority's characterization of the machine's function as "automated container storage and retrieval management" is not a description of a physical function at all; it is a description of a software-mediated operational management activity. HS classification turns on what the machine is and what it does mechanically, not on the purpose to which it is put or the software that directs its movements.
2. Erroneous principal function analysis. The German authority purported to apply Section XVI, Note 3, which requires composite machines to be classified by reference to their principal function. The authority identified "automated handling and storage" as the principal function. However, "automated handling and storage" is not a physical function of the machine — it is an operational outcome achieved through software direction of the machine's physical functions. The principal physical function of the ASC-40R remains lifting, traversing, and lowering containers by means of a wire rope hoist system suspended from a gantry — which is, by definition, a crane function. Note 3 requires analysis of the machine's function, not its software-mediated purpose.
3. Artificial automation distinction. The German authority's distinction between operator-controlled RMG cranes (heading 8426) and automated ASC systems (heading 8428) is unsupported by the heading text. Heading 8426 covers "cranes" without any condition or limitation based on the presence or absence of a human operator. The heading does not distinguish between manually operated, semi-automated, and fully automated cranes. Moreover, the distinction is practically unworkable: many modern RMG cranes are semi-automated, with varying degrees of automated operation. Some RMG cranes are capable of switching between operator-controlled and fully automated modes. Under the German approach, the same physical machine could be classified under different headings depending on whether its automation software is activated — a result that is wholly inconsistent with the HS principle of classification based on objective physical characteristics at the time of importation.
4. Limited scope. The German ruling addressed only ASC systems. It did not consider or address STS gantry cranes. Even if the German approach to ASC classification were correct (which TSL denies), it would have no bearing on the classification of TSL's 12 STS gantry cranes. The STS gantry crane is universally recognized as a crane, and AADE's reclassification of the STS cranes under heading 8428 goes beyond even the German position.
5. Minority position. As demonstrated by the survey enclosed as Exhibit 2, the German ruling represents a minority view among EU member states. No other member state identified in the survey has adopted the approach of reclassifying automated gantry cranes from heading 8426 to heading 8428. The weight of classification practice across the EU supports classification under heading 8426.
V. WCO HARMONIZED SYSTEM COMMITTEE PRECEDENT
TSL encloses as Exhibit 3 to this submission a summary of relevant classification opinions, decisions, and discussions of the World Customs Organization's Harmonized System Committee relating to the classification of automated cranes and port handling equipment. This summary was prepared by Calderwood & Harkness LLP with the assistance of Dr. Brenner, drawing on Dr. Brenner's first-hand experience as a former member of the HS Committee from 2008 to 2016.
The following key points emerge from the analysis of WCO HS Committee precedent:
First, the WCO HS Committee has considered the classification of automated and semi-automated gantry cranes on multiple occasions over the past two decades and has not adopted any classification opinion reassigning automated cranes from heading 8426 to heading 8428. This is a significant point. The HS Committee is the principal international body responsible for ensuring uniform classification of goods under the Harmonized System, and the absence of any reclassification opinion — notwithstanding extensive discussion of port terminal automation — supports the conclusion that the international consensus is that automated gantry cranes remain classified under heading 8426.
Second, the absence of any reclassification opinion is particularly significant in light of the fact that port terminal automation has expanded dramatically on a global scale over the past twenty years. Major automated container terminals now operate in Europe, Asia, the Middle East, Australia, and the Americas. The HS Committee has had ample opportunity to consider whether automation alters the classification of gantry cranes, and the fact that it has not adopted a reclassification opinion speaks with considerable force to the question before DG TAXUD.
Third, at the HS Committee's 66th Session, the Committee considered a Classification Opinion on "Automated Rail-Mounted Gantry Cranes." The discussion took place within the framework of heading 8426, and the classification was considered within that heading. While the formal Classification Opinion adopted at that session does not constitute a binding determination in the same manner as a classification regulation under EU law, it is highly relevant as evidence of the international understanding of the scope of heading 8426.
Fourth, several WCO classification opinions have treated ship-to-shore container cranes — including large Post-Panamax and Super-Post-Panamax STS cranes — as falling under heading 8426. These classification opinions confirm the well-established understanding that ship-to-shore container cranes, regardless of their size, capacity, or degree of sophistication, are "cranes" within the meaning of heading 8426.
Fifth, the WCO Explanatory Notes to heading 8426 provide a description of the machines covered by the heading. The Explanatory Notes describe machines that lift loads using "ropes, chains, or other lifting gear suspended from a jib, boom, or overhead structure (gantry)." Both the QC-65 STS gantry crane and the ASC-40R automated stacking crane satisfy every element of this description. Each machine lifts loads (containers) using wire ropes suspended from a headblock and trolley assembly that travels along a horizontal beam supported by a gantry (portal frame) structure. The correspondence between the Explanatory Notes description and the physical characteristics of TSL's equipment is precise and complete.
Sixth, by contrast, the WCO Explanatory Notes to heading 8428 describe the heading as covering machinery "not falling in any of the preceding headings of this Chapter." This language confirms the residual character of heading 8428. The Explanatory Notes provide examples of machinery covered by heading 8428, including bucket elevators, pneumatic conveyors, escalators, teleferics (aerial tramways), and ski lifts. These examples are, without exception, fundamentally different from cranes. They are continuous-flow or passive-transport machines that bear no resemblance — in structure, mechanical function, or operational principle — to gantry cranes. The examples provided in the Explanatory Notes to heading 8428 confirm that the heading is intended to cover a distinct category of handling machinery, not machinery that is specifically identified as "cranes" in heading 8426.
VI. THE AUTOMATION QUESTION — CLASSIFICATION PRINCIPLES
The central analytical question presented to DG TAXUD in this consultation is whether full automation transforms a gantry crane, which would otherwise be classified under heading 8426, into "other handling machinery" under heading 8428. TSL submits that it does not, and that the principles of classification under the Harmonized System and the Combined Nomenclature require this conclusion. The following subsections address each of the relevant classification principles in turn.
A. Heading Text Does Not Distinguish by Automation Level
The starting point for any classification analysis is the text of the relevant headings, in accordance with GIR 1. Heading 8426 covers, in relevant part, "Ships' derricks; cranes, including cable cranes; mobile lifting frames, straddle carriers and works trucks fitted with a crane." The term "cranes" is used without any qualification, limitation, or condition as to the method of control. The heading does not specify "manually operated cranes," "operator-controlled cranes," or "non-automated cranes." It covers "cranes" — full stop.
If the drafters of the Harmonized System had intended to limit heading 8426 to operator-controlled cranes, or to exclude fully automated cranes, they would have so specified. The HS and Combined Nomenclature employ qualifications and conditions extensively throughout the tariff schedule. Where a heading or subheading is intended to be limited to a particular type or configuration of a product, the heading text says so explicitly. The absence of any such limitation in heading 8426 is a deliberate choice that must be given effect.
Furthermore, Section XVI, Note 5 of the Combined Nomenclature provides that, for the purposes of the Section, "references to machines cover, unless the context otherwise requires, both the machines themselves and the parts thereof." More relevantly, the Section's general structure covers both manual and power-operated machines. This principle extends, by logical necessity, to machines that are controlled by human operators, semi-automated systems, or fully automated systems. The method of control is a continuum, not a binary classification-determinative distinction.
B. Objective Characteristics at Time of Importation
It is a fundamental principle of customs classification under the Harmonized System that goods are classified based on their objective physical characteristics as presented to customs at the time of importation. This principle has been consistently affirmed by the Court of Justice of the European Union in cases including Turbon International (Case C-276/00), RUMA (Case C-183/06), and Wierer (Case C-236/11). Classification does not depend on the intended use of the goods, the subjective intentions of the importer, or the software configuration of the machine. It depends on what the machine is, physically and mechanically, at the time it crosses the customs frontier.
Applied to the present case, this principle requires examination of the physical characteristics of the ASC-40R at the time of importation. Those characteristics are clear and undisputed:
•  A gantry (portal frame) structure of welded steel construction, traveling on steel rails;
•  A trolley assembly traveling on a horizontal beam supported by the gantry;
•  A wire rope hoist system with multiple reeving, headblock, and telescoping container spreader;
•  Rail-mounted travel mechanisms for gantry movement along the container stack;
•  Electrical power supply via bus bars or cable reels.
These are the physical characteristics of a gantry crane. They are identical to those of a traditional, operator-controlled RMG crane. The HaiControl Suite v4.2 software — which receives instructions from the terminal operating system, calculates optimal container placement and retrieval sequences, and directs the crane's movements — is a control system. It is not a structural or mechanical characteristic of the machine. The software does not alter the gantry, the trolley, the wire ropes, or the spreader. It tells the machine what to do; the machine does it using the same mechanical means as any other gantry crane.
The analogy to power source is instructive. A diesel-powered crane and an electrically powered crane are both cranes. The power source is a characteristic of the machine, but it does not alter the heading-level classification. Similarly, an operator-controlled crane and a computer-controlled crane are both cranes. The control system is a characteristic of the machine, but it does not alter the heading-level classification.
C. Technological Evolution Does Not Alter Classification
The Harmonized System has historically maintained classification stability as machines evolve technologically. The HS does not reclassify machines each time a new technology is incorporated into their design or operation. If it did, the tariff schedule would be in constant flux, and the commercial certainty that is the principal purpose of the HS would be fatally undermined.
The most directly analogous precedent is the classification of computer numerical control (CNC) machine tools. A CNC lathe is a lathe in which all operations — workpiece rotation, tool positioning, feed rate, depth of cut — are controlled by a computer program rather than by a human operator. Despite this full automation, CNC lathes remain classified as "lathes" under heading 8458. They are not reclassified as "other machine tools" under the residual heading 8479. The addition of computer control changes the method by which the machine is operated; it does not change what the machine is.
Similarly, a motor vehicle equipped with autonomous driving technology — self-driving capabilities using LIDAR, radar, cameras, GPS, and artificial intelligence — remains classified as a "motor car" under heading 8703. The addition of autonomous driving technology does not transform the vehicle into "other handling machinery" under heading 8428 or some other residual heading. The vehicle is still a motor car; it is merely controlled by software rather than by a human driver.
The principle is clear and consistent: technological evolution in the method of control does not alter the fundamental classification of a machine. An automated crane is still a crane.
D. Section XVI, Note 3 — Principal Function
Even if the ASC-40R were to be characterized as a "composite machine" performing both crane functions (heading 8426) and automated handling/storage functions (heading 8428) — a characterization that TSL does not accept, but addresses in the alternative — Section XVI, Note 3 of the Combined Nomenclature would require classification by reference to the machine's principal function. Note 3 provides:
"Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine whose function is principal."
The principal function of the ASC-40R is the physical lifting, horizontal traversing, and controlled lowering of containers. This is a crane function, squarely within heading 8426. The machine accomplishes this function using precisely the same mechanical means as any other gantry crane: wire ropes, a trolley, a headblock, a spreader, and a gantry structure.
The software-driven functions that the German ruling characterized as the "principal function" — stacking optimization, yard management, predictive maintenance, container sequencing — are not physical functions of the machine at all. They are computational operations performed by software. The software tells the crane where to place a container, when to retrieve it, and in what sequence to perform operations. But the physical action — the lifting, traversing, and lowering of containers — is performed by the crane mechanism and constitutes the machine's principal function.
To put the point differently: the software directs the crane; the crane performs the lifting. The principal function of the machine is what the machine physically does — lift containers by wire ropes from a gantry. The software's role in determining the optimal container placement is ancillary to this principal physical function. Without the crane mechanism, the software would have nothing to direct. Without the software, the crane mechanism could still lift containers (albeit less efficiently).
Under Note 3, the principal function analysis thus confirms classification under heading 8426.
VII. ECONOMIC AND COMMERCIAL SIGNIFICANCE
While TSL recognizes that classification under the Combined Nomenclature must be determined on the basis of the applicable legal rules and classification principles rather than on the basis of economic considerations alone, TSL respectfully draws DG TAXUD's attention to the significant commercial implications of the classification question at issue, which underscore the urgency and importance of achieving a harmonized determination.
The classification of STS gantry cranes and ASC systems directly affects port terminal operators across the European Union. The EU's major container ports — including Rotterdam, Antwerp, Hamburg, Piraeus, Valencia, Algeciras, Bremerhaven, Felixstowe, Gdańsk, and Gioia Tauro — have invested heavily in automated container-handling equipment over the past two decades. The global trend toward port terminal automation is well documented, driven by the need for increased throughput capacity, improved operational efficiency, enhanced safety, and reduced labour costs. Automated stacking cranes and semi-automated STS cranes are now standard equipment at modern container terminals worldwide.
The current classification uncertainty creates significant unpredictability in customs obligations and economic planning for EU port terminal operators. An operator investing in automated container-handling equipment cannot reliably predict whether the equipment will be subject to 0% duty (under heading 8426) or 2.2% duty (under heading 8428, CN 8428 90 90). For large-scale terminal development projects involving tens or hundreds of millions of euros in equipment investment, this uncertainty can translate into millions of euros in unpredictable duty liability.
A uniform EU-wide classification is essential for the following reasons:
(a) Predictability and legal certainty for EU importers. Port terminal operators, shipping lines, and logistics companies must be able to predict their customs obligations with reasonable certainty when planning major capital investments. The current divergence between member state rulings undermines this predictability.
(b) Stability of customs obligations in the port logistics sector. The port logistics sector operates on thin margins and long investment horizons. Terminal concession agreements and equipment procurement contracts typically span 20 to 30 years. Classification certainty is essential for accurate financial modelling, investment appraisal, and long-term planning.
(c) Consistent application of the Common Customs Tariff across all member states. The Common Customs Tariff is a cornerstone of the EU customs union. Its purpose is to ensure that the same goods are subject to the same duty obligations regardless of the member state through which they are imported. The divergence between the Dutch and German rulings defeats this purpose.
(d) Prevention of distortions of competition. If automated container-handling equipment is classified under heading 8426 (0% duty) in some member states and under heading 8428 (2.2% duty) in others, terminal operators in different member states will face different duty obligations for identical equipment. This creates a competitive distortion, favouring operators who import through member states applying the lower classification and penalizing those who import through member states applying the higher classification. Such distortions are precisely what the EU customs union and the BTI harmonization mechanism are designed to prevent.
The divergence between the Dutch ruling (NL-BTI-2021-01234) and the German ruling (DE-BTI-2020-05678) creates precisely the kind of inconsistency that the BTI harmonization mechanism under Article 34(10) of the Union Customs Code is designed to resolve. TSL respectfully urges DG TAXUD to exercise its authority under this provision to establish a uniform classification across all EU member states.
VIII. REQUESTED OUTCOME
In light of the foregoing, TSL respectfully requests that DG TAXUD take the following actions:
1.  Confirm the classification of STS gantry cranes and ASC systems under heading 8426. TSL requests that DG TAXUD confirm that ship-to-shore (STS) gantry cranes, including the Hailong QC-65, and automated stacking crane (ASC) systems, including the Hailong ASC-40R, are properly classified under heading 8426 of the Combined Nomenclature, specifically under subheading CN 8426 19 00 ("Other overhead travelling cranes, transporter cranes, gantry cranes, bridge cranes, mobile lifting frames and straddle carriers"), at a most-favoured-nation (MFN) duty rate of 0%.
2.  Provide appropriate guidance to ensure uniform application of this classification across all EU member states' customs authorities. TSL requests that DG TAXUD consider the most appropriate mechanism for ensuring uniform application, which may include:
(a) Issuing a classification regulation under Article 57(4) of the Union Customs Code and Article 9 of Regulation (EU) No. 2446/2015 (Delegated Act), establishing a binding and uniform classification of STS gantry cranes and ASC systems under CN 8426 19 00;
(b) Providing classification guidance through the Customs Code Committee, Section for Tariff and Statistical Nomenclature, to be communicated to all national customs authorities; or
(c) Issuing an advisory opinion to AADE directing the issuance of a Binding Tariff Information ruling consistent with classification under heading 8426.
3.  Address and resolve the analytical divergence between the Dutch and German approaches. TSL requests that DG TAXUD specifically address the question of whether the degree of automation is a relevant factor in determining whether machinery falls under heading 8426 or heading 8428 of the Combined Nomenclature, and confirm that automation is not a classification-determinative factor for purposes of distinguishing between these two headings.
IX. AVAILABILITY AND COOPERATION
TSL, through its undersigned counsel, remains at DG TAXUD's full disposal for any questions, requests for additional documentation, requests for clarification, or invitations for oral submissions that may arise in the course of DG TAXUD's review of this submission and the underlying BTI application.
TSL is prepared to make its technical personnel available to provide further details regarding the design, manufacture, and operation of the equipment at issue. In particular, Mr. Dimitrios Sarantopoulos, TSL's Vice President for Procurement and Supply Chain, who oversaw the procurement of the Hailong equipment and possesses detailed knowledge of the equipment's technical specifications and operational deployment, is available for consultation. Additionally, TSL is prepared to facilitate the participation of Hailong Heavy Industries' technical staff, including design engineers and automation specialists, to provide any additional technical information that DG TAXUD may require.
TSL will cooperate fully with any inquiry, consultation process, or fact-finding procedure undertaken by DG TAXUD in connection with this matter. TSL recognizes the importance of providing DG TAXUD with complete and accurate information and commits to responding promptly to any such requests.
Respectfully submitted,
CALDERWOOD & HARKNESS LLP
By: ________
Christy Bauer Senior Associate Calderwood & Harkness LLP Avenue Louise 480, 1050 Brussels, Belgium Tel: +32 (0)2 643 7812
Email: christy.bauer@calderwoodharkness.com
Date: March 15, 2023
VOURNAS & THEODORAKIS DIKIGIRIKO GRAFEIO
By: ________
Alexandros Vournas Managing Partner Vournas & Theodorakis Dikigiriko Grafeio 22 Academias Street, 106 71 Athens, Greece Athens Bar Association Registration No. 18744 Tel: +30 210 362 4800
Email: a.vournas@vournaslaw.gr
Date: March 15, 2023
On behalf of Thalassa Shipping & Logistics Société Anonyme EORI No. GR094827361000
ENCLOSURES / EXHIBITS
The following exhibits are enclosed with this submission and incorporated herein by reference:
cc:
Aikaterini Vlachopoulou, Chief Customs Auditor, AADE Piraeus Regional Customs Office, 2 Karaoli & Dimitriou Street, 185 31 Piraeus, Greece
Panagiotis Drakos, Senior Partner, Meridian & Drakos Dikigiriko Grafeio, 15 Stadiou Street, 105 62 Athens, Greece (AADE external legal advisor)
James Prentice, Partner, Calderwood & Harkness LLP (Responsible Partner, C&H Matter No. C&H-2022-ITS-04781)
Nikolaos Andreadis, Chairman & CEO, Thalassa Shipping & Logistics SA, 47 Akti Miaouli, 185 35 Piraeus, Greece
Elena Papadimitriou, CFO, Thalassa Shipping & Logistics SA, 47 Akti Miaouli, 185 35 Piraeus, Greece
Contract Reference | Date | Equipment | Quantity | Declared CIF Value | Unit Price
HHI-TSL-2019-001 | January 15, 2019 | STS Gantry Cranes (Model QC-65) | 12 | €38,400,000 | €3,200,000
HHI-TSL-2019-002 | March 22, 2019 | RTG Cranes (Model RTG-40E) | 18 | €25,200,000 | €1,400,000
HHI-TSL-2020-003 | June 10, 2020 | ASC Systems (Model ASC-40R) | 8 | €28,800,000 | €3,600,000
HHI-TSL-2021-004 | February 28, 2021 | Spare parts, software licenses, commissioning services (bundled) | — | €5,600,000 | —
Total | 47 units + spares | €98,000,000
Exhibit | Description
Exhibit 1 | Expert Opinion of Dr. Lukas Brenner, Managing Director, Argonaut Trade Consulting GmbH, Friedrichstraße 191, 10117 Berlin, Germany — Independent classification analysis of the Hailong QC-65 STS Gantry Crane and Hailong ASC-40R Automated Stacking Crane under the Combined Nomenclature, with detailed technical comparison and analysis of WCO precedent (dated March 10, 2023; 42 pages, including technical annexes and diagrams)
Exhibit 2 | Survey of EU Member State BTI Rulings and Classification Practices on STS Cranes and ASC Systems — Compiled by Calderwood & Harkness LLP (dated March 12, 2023; covering rulings and classification guidance from 14 EU member states)
Exhibit 3 | Summary of WCO Harmonized System Committee Precedent on Automated Cranes and Port Handling Equipment — Including reference to HS Committee 66th Session Classification Opinion on "Automated Rail-Mounted Gantry Cranes" and analysis of relevant WCO Explanatory Notes (dated March 13, 2023; 28 pages)