JUDGMENT OF THE COURT
10 March 1998
(Framework Agreement on Bananas — GATT 1994 — Final Act)
In Case C-122/95,
Federal Republic of Germany, represented by E. Röder, Ministerialrat in the Federal
Ministry of Economic Affairs, and B. Kloke, Oberregierungsrat in the same ministry, D53107 Bonn, acting as Agents,
applicant,
supported by
Kingdom of Belgium, represented by J. Devadder, General Adviser in the Ministry of
Foreign Affairs, External Trade and Development Cooperation, acting as Agent, with an
address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins,
intervener,
v
Council of the European Union, represented by R. Bandilla, Director in its Legal Service,
A. Brautigam, Legal Adviser, and J.-P. Hix, of its Legal Service, acting as Agents, with an
address for service in Luxembourg at the office of A. Morbilli,
Director-General of the Legal Affairs Directorate of the European Investment Bank, 100
Boulevard Konrad Adenauer,
defendant,
supported by
Kingdom of Spain, represented by A. Navarro González, Director-General of Community
Legal and Institutional Affairs, and R. Silva de Lapuerta, Abogado del Estado, of the State
Legal Service, acting as Agents, with an address for service in Luxembourg at the Spanish
Embassy, 4-6 Boulevard E. Servais,
French Republic, represented by C. de Salins, Head of Subdirectorate in the Legal
Directorate of the Ministry of Foreign Affairs, and G. Mignot, Foreign Affairs Secretary in
the same directorate, acting as Agents, with an address for service in Luxembourg at the
French Embassy, 8B Boulevard Joseph II, and
Commission of the European Communities, represented by T. Christoforou and U.
Wölker, of its Legal Service, acting as Agents, with an address for service in Luxembourg at
the office of C. Gómez de la Cruz, of its Legal Service, Wagner Centre, Kirchberg,
interveners,
APPLICATION for annulment of the first indent of Article 1(1) of Council Decision
94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European
Community, as regards matters within its competence, of the agreements reached in the
Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1), to the extent
that the Council thereby approved the conclusion of the Framework Agreement on Bananas
with the Republic of Costa Rica, the Republic of Colombia, the Republic of Nicaragua and
the Republic of Venezuela,
THE COURT,
composed of: G.C. Rodríguez Iglesias, President, C. Gulmann, M. Wathelet, R. Schintgen
(Rapporteur) (Presidents of Chambers), G.F. Mancini, P.J.G. Kapteyn, J.L. Murray, D.A.O.
Edward, J.-P. Puissochet, G. Hirsch and P. Jann, Judges,
Advocate General: M.B. Elmer,
Registrar: H.A. Rühl, Principal Administrator,
having regard to the Report for the Hearing,
after hearing oral argument from the parties at the hearing on 4 February 1997, at which the
German Government was represented by E. Röder, the Belgian Government by J. Devadder,
the Council by A. Brautigam and J.-P. Hix, the Spanish Government by R. Silva de Lapuerta,
the French Government by F. Pascal, Attaché d'Administration Centrale in the Legal
Directorate of the Ministry of Foreign Affairs, acting as Agent, and the Commission by U.
Wölker, P.J. Kuyper, Legal Adviser, and K.-D. Borchardt, of its Legal Service, acting as
Agents,
after hearing the Opinion of the Advocate General at the sitting on 24 June 1997,
gives the following
Judgment
1.
By application lodged at the Court Registry on 10 April 1995, the Federal Republic
of Germany brought an action under the first paragraph of Article 173 of the EC
Treaty for annulment of the first indent of Article 1(1) of Council Decision 94/800/EC
of 22 December 1994 concerning the conclusion on behalf of the European
Community, as regards matters within its competence, of the agreements reached in
the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1,
hereinafter 'the contested decision‘), to the extent that the Council thereby approved
the conclusion of the Framework Agreement on Bananas with the Republic of Costa
Rica, the Republic of Colombia, the Republic of Nicaragua and the Republic of
Venezuela (hereinafter 'the Framework Agreement‘).
2.
Title IV of Council Regulation (EEC) No 404/93 of 13 February 1993 on the
common organisation of the market in bananas (OJ 1993 L 47, p. 1) substituted a
common regime governing trade with third countries for the various national regimes
previously in force.
3.
Article 18(1) of Regulation No 404/93, as originally worded, provided that a tariff
quota of 2 000 000 tonnes (net weight) was to be opened each year for imports of
third-country bananas and non-traditional ACP bananas. Within the framework of the
tariff quota, imports of third-country bananas were subject to a customs duty of ECU
100 per tonne, whilst there was no duty on imports of non-traditional ACP bananas.
4.
Article 19(1) of that regulation subdivides the tariff quota opened as follows:
66.5% to the category of operators who previously marketed third-country and/or
non-traditional ACP bananas, 30% to the category of operators who marketed
Community and/or traditional ACP bananas and 3.5% to the category of operators
established in the Community who started marketing bananas other than Community
and/or traditional ACP bananas from 1992.
5.
Article 20 of Regulation No 404/93 requires the Commission to adopt detailed rules
for implementing Title IV.
6.
The Commission thus adopted Regulation (EEC) No 1442/93 of 10 June 1993
laying down detailed rules for the application of the arrangements for importing
bananas into the Community (OJ 1993 L 142, p. 6). That regulation reproduces the
above allocation of the tariff quota among the three categories of operators, referred to
as 'Categories A, B and C‘.
7.
On 19 February 1993 the Republic of Colombia, the Republic of Costa Rica, the
Republic of Guatemala, the Republic of Nicaragua and the Republic of Venezuela
asked the Community to open consultations under Article XXII:1 of the General
Agreement on Tariffs and Trade (hereinafter 'GATT‘) in relation to Regulation No
404/93. The consultations were unsuccessful and therefore, in April 1993, the Latin
American States concerned initiated the dispute settlement procedure provided for in
Article XXIII:2 of GATT.
8.
On 18 January 1994 the panel set up under that procedure submitted a report
concluding that the import regime introduced by Regulation No 404/93 was
incompatible with the GATT rules.
9.
That report was not adopted by the parties to GATT.
10.
On 28 and 29 March 1994 the Community came to an arrangement with the
Republic of Colombia, the Republic of Costa Rica, the Republic of Nicaragua and the
Republic of Venezuela, in the form of the Framework Agreement.
11.
The Framework Agreement comprises two documents: the first, entitled 'Agreed
outcome of the negotiations between Colombia, Costa Rica, Nicaragua, Venezuela
and the European Community on the EC's import regime for bananas‘, constitutes a
sort of preamble to the agreement itself; the second document, entitled 'Framework
Agreement on Bananas‘, contains the technical provisions of the arrangement with the
Latin American countries.
12.
The first document states:
'The attached draft agreement on bananas represents a satisfactory outcome of the
negotiations on bananas in the context of the Uruguay Round.
The agreement also constitutes the outcome of Article XXVIII negotiations and
consultations on bananas between the EC and the abovementioned countries.
Furthermore, the agreement constitutes a settlement of the dispute on bananas which
is the subject of a GATT panel report. It was agreed, therefore, that Colombia, Costa
Rica, Nicaragua, Venezuela and the EC will not pursue the adoption of the said panel
report.
Colombia, Costa Rica, Nicaragua and Venezuela agreed that they would not initiate
GATT dispute settlement procedures against the EC's regime for bananas for the
duration of the attached agreement‘.
13.
Point 1 of the second document, which constitutes the Framework Agreement
properly so called, fixes the global basic tariff quota at 2 100 000 tonnes for 1994 and
2 200 000 tonnes for 1995 and the following years, subject to any increase resulting
from the enlargement of the Community.
14.
In point 2, the Framework Agreement lays down the percentages of that quota
allocated to Colombia, Costa Rica, Nicaragua and Venezuela respectively. Those
States are to receive 49.4% of the total quota, whilst the Dominican Republic and the
other ACP States are granted 90 000 tonnes for non-traditional imports, the balance
being allocated to the other third countries.
15.
Points 3 to 5 deal with the application or modification of the country quotas in the
event of one country being unable to fulfil its quota or in the event of an increase in
the global quota.
16.
Point 6 provides that the management of the quotas, including any increase, is to
remain unchanged as laid down in Regulation No 404/93. That point provides further:
'the supplying countries with country quotas may deliver special export certificates for
up to 70% of their quota, which, in turn, constitute a prerequisite for the issuance, by
the Community, of certificates for the importation of bananas from said countries by
”Category A” and ”Category C” operators.
The authorisation to deliver the special export certificates shall be granted by the
Commission in order to make it possible to improve regular and stable trade relations
between producers and importers and on the condition that the export certificates will
be issued without any discrimination among the operators.‘
17.
Point 7 fixes the in-quota customs duty at ECU 75 per tonne.
18.
Under points 8 and 9, the agreed system is to be operational by 1 October 1994 at
the latest and to expire on 31 December 2002.
19.
Points 10 and 11 provide:
'This agreement will be incorporated into the Community's Uruguay Round Schedule.
This agreement represents a settlement of the dispute between Colombia, Costa Rica,
Venezuela, Nicaragua and the Community on the Community's banana
regime. The parties to this agreement will not pursue the adoption of the GATT panel
report on this issue.‘
20.
Points 1 and 7 of the Framework Agreement were incorporated in Schedule LXXX
to GATT 1994, which lists the Community customs concessions. GATT 1994 in turn
constitutes Annex 1A to the Agreement establishing the Word Trade Organisation
(hereinafter 'the WTO‘). An annex to Schedule LXXX reproduces the Framework
Agreement.
21.
On 25 July 1994 the Federal Republic of Germany sought an Opinion from the
Court as to the compatibility of the Framework Agreement with the Treaty.
22.
By judgment of 5 October 1994 in Case C-280/93 Germany v Council [1994] ECR
I-4973, the Court dismissed the action brought by the Federal Republic of Germany
for the annulment of Regulation No 404/93.
23.
In a declaration entered in the minutes of the Council meeting of 20 December
1994 concerning adoption of the decision concluding the Uruguay Round agreements,
planned to take place on 22 December 1994, the German Government made it clear
that 'notwithstanding its approval of the Council Decision on the conclusion by the
Community of the WTO Agreement, the Federal Government considers the
Framework Agreement ... to be illegal‘ and that that approval 'cannot be interpreted as
approval‘ of the Framework Agreement.
24.
On 21 December 1994 the Commission adopted Regulation (EC) No 3224/94
laying down transitional measures for the implementation of the Framework
Agreement on Bananas concluded as part of the Uruguay Round of multilateral trade
negotiations (OJ 1994 L 337, p. 72).
25.
On 22 December 1994 the Council unanimously adopted the contested decision, the
first indent of Article 1(1) of which is worded as follows:
'1. The following multilateral agreements and acts are hereby approved on behalf of
the European Community with regard to that portion of them which falls within the
competence of the European Community:
— the Agreement establishing the World Trade Organisation, and also the
Agreements in Annexes 1, 2 and 3 to that Agreement.‘
26.
That decision was published at page 1 et seq. of issue No L 336 of the Official
Journal of the European Communities, dated 23 December 1994, under the heading
'Acts whose publication is not obligatory‘. According to information from the Office
for Official Publications of the European Communities, issue No L 336 of the Official
Journal of the European Communities was not available until 13 February 1995.
27.
Council Regulation (EC) No 3290/94 of 22 December 1994 on the adjustments and
transitional arrangements required in the agriculture sector in order to implement the
agreements concluded during the Uruguay Round of multilateral trade negotiations
(OJ 1994 L 349, p. 105) has an Annex XV relating to bananas. That annex provides
that Article 18(1) of Regulation No 404/93 is to be amended so that, for 1994, the
tariff quota is fixed at 2 100 000 tonnes and, for the following years, at 2 200 000
tonnes. In the framework of that tariff quota, imports of third-country bananas are to
be subject to a customs duty of ECU 75 per tonne.
28.
Commission Regulation (EC) No 478/95 of 1 March 1995 on additional rules for
the application of Regulation No 404/93 as regards the tariff quota arrangements for
imports of bananas into the Community and amending Regulation No 1442/93 (OJ
1993 L 49, p. 13) is concerned with the adoption of the measures necessary for
implementation, no longer on a transitional basis, of the Framework Agreement.
29.
In its Opinion of 13 December 1995 (Opinion 3/94 [1995] ECR I-4577) the Court
found that there was no need to respond to the request for an Opinion made by the
Federal Republic of Germany, that request having become devoid of purpose because
the Framework Agreement, incorporated in the agreements reached in the Uruguay
Round multilateral negotiations, had been concluded after the request was submitted
to the Court.
Admissibility of the application
30.
The Council raises several objections to the admissibility of the application,
arguing that it was lodged out of time and that the Framework Agreement, once
approved, is binding on the Community and the Member States and constitutes a part
of the whole agreement establishing the WTO.
31.
First, the Council, supported by the Kingdom of Spain, the French Republic and the
Commission, contends that the application is inadmissible on the ground that it was
not lodged, as required by the fifth paragraph of Article 173 of the Treaty, within the
period of two months following the day on which the contested decision came to the
applicant's knowledge, in this case 22 December 1994, the date on which it was
adopted by the Council.
32.
In support of that objection of inadmissibility, the Council contends that the date of
publication in the Official Journal of the European Communities — or, where, as in
this case, that does not correspond with the date on which the Official Journal of the
European Communities actually became available, the date on which it actually
appeared — can be regarded as the starting point of the period prescribed for
instituting proceedings only in the case of acts whose publication is obligatory, a
category into which the contested decision does not fall.
33.
The Federal Republic of Germany states in reply that it is clear from the wording of
the fifth paragraph of Article 173 of the Treaty that the day on which the measure
came to the knowledge of the applicant can be relied on only if the measure was not
published or notified, and that the fact that the contested decision is not a measure
whose publication is obligatory is irrelevant.
34.
Under the fifth paragraph of Article 173 of the Treaty, the proceedings provided for
in that article must be instituted within two months of publication of the measure, or
of its notification to the applicant, or, in the absence thereof, of the day on which it
came to the knowledge of the latter, as the case may be.
35.
It is clear simply from the wording of that provision that the criterion of the day on
which a measure came to the knowledge of an applicant, as the starting point of the
period prescribed for instituting proceedings, is subsidiary to the criteria of
publication or notification of the measure.
36.
It is, moreover, consistent practice for Council measures embodying the conclusion
of international agreements binding on the European Community to be published in
the Official Journal of the European Communities.
37.
The applicant was therefore legitimately entitled to assume that the contested
decision, by which approval was given on behalf of the European Community of, in
particular, the agreement establishing the WTO and the agreements in the annexes to
it, including GATT 1994, would be published in the Official Journal of the European
Communities.
38.
Such publication in fact took place less than two months after the adoption of the
measure by the Council, since the issue of the Official Journal of the European
Communities in which it appeared was available on 13 February 1995.
39.
In those circumstances, it must be concluded that in this case it was the date of
publication which marked the starting point of the period prescribed for instituting
proceedings.
40.
Since the Federal Republic of Germany brought this action within less than two
months of the date on which the issue of the Official Journal of the European
Communities containing the contested decision actually appeared, the first objection
of inadmissibility, namely that the application was lodged out of time, must be
rejected.
41.
Second, the Council contends that a Member State may not challenge an
international agreement, which was concluded by the Community without reservation
and which binds the institutions and the Member States in both Community law and
international law, by means of an action for annulment of the measure concluding that
agreement on behalf of the Community.
42.
In that regard it need merely be noted that in paragraph 22 of Opinion 3/94, cited
above, the Court expressly found, when explaining why there was no need to respond
to the request for an Opinion pursuant to Article 228(6) of the Treaty where the
international agreement to which the request related had already been concluded, that,
in any event, the State or Community institution which had requested the Opinion was
entitled to bring an action for annulment of the Council's decision to conclude the
agreement and, in that context, to apply for interim relief.
43.
Third, the Council contends that the Framework Agreement represents only one of
the many agreements reached in the Uruguay Round multilateral trade negotiations
and that its annulment cannot therefore be sought in isolation without compromising
the delicate balance of the reciprocal commitments and concessions negotiated in that
context. In support of its objection the Council refers to Joined Cases 31/86 and
35/86 LAISA and CPC España v Council [1988] ECR 2285, in which the Court held
that it was not permissible to challenge certain provisions of the Act concerning the
conditions of accession of the Kingdom of Spain and the Portuguese Republic and the
adjustments to the Treaties (OJ 1985 L 302, p. 23) since they formed part of a larger
set of measures embodying the results of the accession negotiations.
44.
In that connection it must be observed, first, that in paragraph 18 of that judgment
the Court dismissed the actions for annulment as inadmissible on the ground that the
contested provisions formed an integral part of the Act of Accession and did not
therefore constitute an act of the Council within the meaning of Article 173 of the
Treaty.
45.
Further, in this case the Council has not given any specific indication of how
annulment of the contested decision, to the extent only that it approves the conclusion
of the Framework Agreement, would render inoperative other reciprocal
commitments and concessions agreed upon in the Uruguay Round negotiations.
46.
Furthermore, in the agricultural sector, the agreements reached in the Uruguay
Round multilateral trade negotiations were implemented internally, through
Regulation No 3290/94, by means of separate adjustments to the various Community
regulations on the common organisation of the agricultural markets. In those
circumstances, annulment of the contested decision, to the extent that it approves the
conclusion of the Framework Agreement, would not be liable to affect the
adjustments made to sectors other than that of bananas.
47.
Thus, none of the Council's objections of inadmissibility can be upheld and the
application is therefore admissible.
Substance
48.
The Federal Republic of Germany, supported by the Kingdom of Belgium, claims
that the regime introduced by the Framework Agreement impairs fundamental rights
of Category A and C operators, namely their freedom to pursue a trade or business
and their right to property, and discriminates against them as compared with Category
B operators. Moreover, the agreement contravenes the principles of the protection of
legitimate expectations and of proportionality.
49.
In support of those pleas, the applicant states that the allocation of country quotas
to third countries which are parties to the Framework Agreement limits Category A
and C operators' opportunities for importing bananas from other third countries. It is
also liable to deprive such operators of the value inherent in product brand-names
based on the countries of origin and forces them to undertake costly diversification of
their sources of supply.
50.
The Federal Republic of Germany also maintains that the export-licence system
involves the payment of charges to the issuing countries and thereby makes imports
from those countries more expensive. Accordingly, application of the export-licence
system only to Category A and C operators means that they are discriminated against
as compared with Category B operators, who are already privileged by the fact that
the basis of quota allocation introduced by Regulation No 404/93 applies to the
increase in the tariff quota provided for in the Framework Agreement. According to
the applicant, such discrimination is not justifiable by the Community interest in
bringing to an end the proceedings initiated before the GATT authorities by the third
countries concerned against the Community banana import regime.
51.
The Council, supported by the Kingdom of Spain, the French Republic and the
Commission, denies that the Framework Agreement contravenes the fundamental
principles of Community law relied on by the applicant. It contends that the
introduction of country quotas and of the export-licence system does not undermine
the competitive situation of the Category A and C operators. It maintains that the
increase in the tariff quota and the lowering of the customs duty agreed upon in the
Framework Agreement increase the availability of third-country bananas and improve
opportunities for competition between operators of all categories.
52.
The Council and the interveners supporting it add that the difference in treatment
arising from the exemption of Category B operators from the obligation to obtain
costly export licences is objectively justified by the need to restore, between them and
Category A and C operators, the competitive balance which Regulation No 404/93
was designed to establish. They state in that connection that, in Germany v Council,
cited above, the Court recognised the legality of certain advantages afforded to
Category B operators because of the need to achieve such a balance. However, the
increase in the tariff quota and the lowering of the customs duty provided for in the
Framework Agreement had the effect of disturbing that balance to the detriment of
Category B operators.
53.
It is necessary, in assessing the merits of this application, to examine first the plea
alleging breach of the general principle of non-discrimination and then the pleas
alleging infringement of the right to property, of the freedom to pursue a trade or
business, of the principle of the protection of legitimate expectations and of the
principle of proportionality.
The plea alleging breach of the general principle of non-discrimination
54.
In considering the merits of the plea alleging breach of the general principle of nondiscrimination it is necessary to distinguish between the introduction of country
quotas and the exemption of Category B operators from the requirements of the
export-licence system.
55.
With regard to the first aspect, it must be emphasised that, in Germany v Council,
cited above, the Court held that it was lawful to introduce the global tariff quota for
imports of third-country and non-traditional ACP bananas as distinct from traditional
imports from the ACP countries which enjoyed favourable terms under the Lomé
Convention.
56.
It must also be borne in mind that there is no general principle of Community law
obliging the Community, in its external relations, to accord third countries equal
treatment in all respects. Therefore, as the Court held in Case
52/81 Faust v Commission [1982] ECR 3745, paragraph 25, if different treatment of
third countries is compatible with Community law, then different treatment accorded
to traders within the Community must also be regarded as compatible with
Community law where that different treatment is merely an automatic consequence of
the different treatment accorded to third countries with which such traders have
entered into commercial relations.
57.
Here, it is clear that the restrictions on import opportunities which the introduction
of country quotas is likely to entail for economic operators in Categories A and C are
the automatic consequence of differences in the treatment accorded to third countries,
depending on whether or not they are parties to the Framework Agreement and on the
size of the quota allocated to them in that agreement.
58.
The plea alleging breach of the general principle of non-discrimination must
therefore be rejected as unfounded as regards the introduction of country quotas.
59.
As to the exemption of Category B operators from the export-licence system, that
difference in treatment is not, it must be noted at the outset, the automatic
consequence of any difference of treatment of some third countries as compared with
others.
60.
That difference in treatment derives not from the fact that the export-licence
system, as provided for in the Framework Agreement, is applicable to imports from
certain third countries, whether or not they are parties to the Framework Agreement,
but from the fact that, among the Community operators who have entered into
commercial relations with third countries imports from which are subject to the
export-licence system, some are under an obligation to obtain export licences whilst
others are exempt from that requirement.
61.
It constitutes, moreover, a clear difference in the treatment of Category A and C
operators as compared with Category B operators, since, as asserted by the applicant
and expressly admitted by the Council, application of the export-licence system to
Category A and C operators means that they have to pay a price for bananas from the
third countries concerned which is some 33% higher than that paid by Category B
operators.
62.
It is therefore necessary to consider whether that difference in treatment is
incompatible with the prohibition laid down in the second subparagraph of Article
40(3) of the Treaty, which is merely a specific enunciation of the general principle of
equality, one of the fundamental principles of Community law (see in particular
Joined Cases 117/76 and 16/77 Ruckdeschel v Hauptzollamt Hamburg-St
Annen [1977] ECR 1753, paragraph 7, Joined Cases 124/76 and 20/77 Moulins et
Huileries de Pont-à-Mousson and Another v Office Interprofessionnel des
Céréales [1977] ECR 1795, paragraph 16, Case 125/77 Koninklijke ScholtenHonig v Hoofdproduktschap voor Akkerbouwprodukten [1978] ECR 1991, paragraph
26, and Joined Cases 103/77 and 145/77 Royal Scholten-Honig v Intervention Board
for Agricultural Products [1978] ECR 2037, paragraph 26), or whether, on the
contrary, it may be objectively justified, as contended by, in particular, the Council
and the Commission, by the need to restore the competitive balance between those
categories of operators.
63.
In that regard, it must be emphasised that, as the Court recognised
in Germany v Council, cited above, the common organisation of the market in
bananas, as established by Regulation No 404/93, and in particular the system of
tariff-quota allocation, involves certain restrictions or differences of treatment
detrimental to Category A and C operators, whose opportunities for importing
bananas from third countries have thereby been restricted, whereas Category B
operators, who had previously been obliged to market essentially Community and
ACP bananas, have gained an opportunity to import specified quantities of thirdcountry bananas.
64.
The Court held that such a difference in treatment is not contrary to the general
principle of non-discrimination in so far as it is inherent in the objective of integrating
previously compartmentalised markets, bearing in mind the different situations of the
various categories of economic operators before the establishment of the common
organisation of the market, and that pursuit of the objective of the common
organisation, which is to guarantee disposal of Community production and traditional
ACP production, entails the striking of a balance between the various categories of
economic operators in question (paragraph 74).
65.
Accordingly, where the balance thus achieved by Regulation No 404/93 has been
disturbed because one or more of the parameters on which it is based — such as, for
example, the level of the tariff quota or that of the customs duties on imports — have
been changed, albeit for reasons unconnected with the common organisation of the
market in the bananas sector, it may prove necessary to restore that balance. The
question remains, however, whether in this case it was proper to do so, to the
detriment of Category A and C operators, by means of a measure such as the
exemption of Category B operators from the export-licence system.
66.
The system for the allocation of the tariff quota, as established by Regulation No
404/93, which reserves 30% of it to Category B operators, is also applicable to the
increase of that quota agreed upon in the Framework Agreement.
67.
Category B operators therefore benefit, in the same way as Category A and C
operators, from the quota increase and the concomitant lowering of customs duties
which, according to the Council and the Commission, are the cause of the disturbance
of the balance between the various categories of operator concerned. In addition, the
restrictions and differences in treatment to which Category A and C operators are
subject as a result of the banana import regime set up by Regulation No 404/93 also
apply to the part of the quota corresponding to that increase.
68.
Therefore, in order to justify recourse to a measure such as the one at issue in this
case, the Council should have demonstrated that the balance disturbed by the increase
in the tariff quota and the concomitant lowering of customs duties, which also benefit
Category B operators, could be restored only by granting a substantial advantage to
that same category of operators and, thus, at the cost of introducing a new difference
in treatment detrimental to the other categories of operators who had already, when
the tariff quota and the machinery for dividing it up were introduced, been subjected
to similar restrictions and differences in treatment.
69.
In the present case, however, the Council's statement that that balance had been
disturbed, and the mere assertion that exemption of Category B operators from the
export-licence system was justified by the need to restore that balance, does not
establish that to be the case.
70.
The Council expressly accepts, moreover, that the introduction of the exportlicence system is intended not only to reestablish a balance between the various
categories of Community operators but also to provide financial aid for the third
countries party to the Framework Agreement and thereby to offset the limitations
which Regulation No 404/93 imposed on the marketing of bananas from those
countries in favour of Community and ACP bananas.
71.
The Council has not, however, provided the Court with sufficient information to
explain why the increase in the tariff quota and its division into country quotas,
together with the concomitant lowering of customs duties, were not sufficient to offset
the limitations which Regulation No 404/93 had imposed on the marketing of bananas
from the third countries party to the Framework Agreement and why that objective
had therefore to be achieved by the imposition of a financial burden on only some of
the economic operators importing bananas from those countries.
72.
Consequently, it must be concluded that the plea alleging breach of the general
principle of non-discrimination is well founded as regards the exemption of Category
B operators from the export-licence system provided for in the Framework
Agreement.
73.
It is therefore necessary to examine the merits of the other pleas only to the extent
to which they are directed against the introduction of country quotas.
The pleas alleging infringement of the right to property, of the freedom to pursue a
trade or business, of the principle of the protection of legitimate expectations and of
the principle of proportionality
74.
It must be recalled that the pleas alleging infringement of the right to property, of
the freedom to pursue a trade or business, of the principle of the protection of
legitimate expectations and of the principle of proportionality were relied on by the
applicant in Germany v Council, cited above, in challenging the regime governing
trade with third countries established in Title IV of Regulation No 404/93 and in
particular the opening of a tariff quota for imports of third-country and non-traditional
ACP bananas and the arrangements for dividing that quota up among the
Community's Category A, B and C operators.
75.
Thus, the applicant had claimed that the loss of market share thereby suffered by
Category A operators undermined their right to property and freedom to pursue their
trade or business, as well as their acquired rights. It also maintained that the regime
for trade with third countries contravened the principle of proportionality in that the
objectives pursued could have been achieved by measures that would have had a
lesser impact on competition and on the interests of certain categories of economic
operators.
76.
In its judgment in that case, however, the Court held that none of those pleas was
well founded.
77.
It considered in particular that no economic operator could claim a right to property
in a market share which he held before the adoption of that regime (paragraph 79) or
an acquired right or a legitimate expectation that a situation existing before that time
would be maintained (paragraph 80). It also held that restrictions on the right to
import third-country bananas resulting from the opening of the tariff quota and the
machinery for its subdivision were inherent in the objectives of general Community
interest pursued by the establishment of a common organisation of the market in the
bananas sector and therefore did not improperly impair the freedom of traditional
traders in third-country bananas to pursue their trade or business (paragraphs 82 and
87). Finally, it found that the contested measures did not infringe the principle of
proportionality since no evidence had been produced that they were manifestly
inappropriate for achieving the objectives pursued (paragraphs 94 and 95).
78.
As regards the right to property, the freedom to pursue a trade or business and the
protection of legitimate expectations, the same considerations apply, in this case, to
the division of the tariff quota into country quotas.
79.
As regards the principle of proportionality, the applicant has failed to prove in what
way, contrary to the Court's finding regarding introduction of the global third-country
quota itself, the subdivision of that quota into specific country quotas for some of
those countries was manifestly inappropriate for achieving the objectives pursued,
namely the marketing of Community and traditional ACP banana production and
integration of the previously compartmentalised national markets.
80.
Furthermore, in so far as those various pleas seek to emphasise that the introduction
of country quotas affects Category A and C operators differently from Category B
operators, they coincide with the plea alleging breach of the general principle of nondiscrimination.
81.
Accordingly, the pleas alleging infringement of the right to property, of the
freedom to pursue a trade or business, of the principle of the protection of legitimate
expectations and of the principle of proportionality must, in this case, also be rejected
as unfounded.
82.
It follows from all the foregoing considerations that it is necessary to annul the first
indent of Article 1(1) of the contested decision, to the extent that the Council thereby
approved the Framework Agreement, in so far as that agreement exempts Category B
operators from the export-licence system for which it provides, and that, for the rest,
the application must be dismissed.
Costs
83.
Under Article 69(2) of the Rules of Procedure, the unsuccessful party is to be
ordered to pay the costs if they have been applied for in the successful party's
pleadings. However, Article 69(3) provides that the Court may order that the costs be
shared or that the parties bear their own costs if each party succeeds on some and fails
on other heads, or where the circumstances are exceptional. Since each of the parties
has been unsuccessful on one head, each should bear its own costs.
Under Article 69(4) of the Rules of Procedure, Member States and institutions which
have intervened in the proceedings are to bear their own costs.
On those grounds,
THE COURT
hereby:
1. Annuls the first indent of Article 1(1) of Council Decision 94/800/EC of 22
December 1994 concerning the conclusion on behalf of the Community, as
regards matters within its competence, of the agreements reached in the
Uruguay Round multilateral negotiations (1986-1994), to the extent that the
Council thereby approved the conclusion of the Framework Agreement on
Bananas between the European Community and the Republic of Costa Rica, the
Republic of Colombia, the Republic of Nicaragua and the Republic of Venezuela,
in so far as that Framework Agreement exempts Category B operators from the
export-licence system for which it provides;
2.
For the rest, dismisses the application;
3.
Orders the parties, including the interveners, to bear their own costs.
Rodríguez Iglesias Gulmann Wathelet Schintgen
Mancini Kapteyn Murray Edward
Puissochet Hirsch
Jann
Delivered in open court in Luxembourg on 10 March 1998.
R. Grass
G.C. Rodríguez Iglesias
Registrar
President