Avis juridique important

Judgment of the Court of 5 October 1994. - Federal Republic of Germany v Council of the European Union. - Bananas - Common organization of the markets - Import regime. - Case C-280/93. European Court reports 1994 Page I-04973 Swedish special edition Page I-00171 Finnish special edition Page I-00173

Summary Parties Grounds Decision on costs Operative part

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1. Acts of the institutions ° Procedure for adoption ° Adoption of a regulation by the Council acting on a proposal from the Commission ° Proposal amended in accordance with a political agreement accepted by the competent member on behalf of the Commission and approved by the Commission ° Amended proposal not in writing ° No effect

(EEC Treaty, Art. 149(3))

2. Acts of the institutions ° Statement of reasons ° Obligation ° Scope ° Acts of the Council requiring a proposal from the Commission

(EEC Treaty, Art. 190)

3. Acts of the institutions ° Procedure for adoption ° Consultation of the Parliament ° Fresh consultation in the event of substantial amendment to the original proposal

4. Agriculture ° Common agricultural policy ° Objectives ° Harmonization ° Discretion of the institutions ° Ensuring a fair income for producers ° Increasing productivity ° Stabilization of the market ° Assuring the availability of supplies ° Reasonable prices for consumers ° Regulation on the common organization of the market in bananas ° Lawfulness

(EEC Treaty, Arts 39 to 43; Council Regulation No 404/93)

5. Agriculture ° Common agricultural policy ° Legislation on the production and marketing of agricultural products aimed at the achievement of the objectives set out in Article 39 of the Treaty ° Legal basis ° Article 43 of the Treaty ° Pursuit of other objectives at the same time ° No effect

(EEC Treaty, Arts 39 and 43; Fourth ACP-EEC Convention, Lomé, 15 December 1989)

6. Agriculture ° Common agricultural policy ° Priority over objectives of the Treaty in the field of competition ° Discretion enjoyed by the Council in applying the rules on competition

(EEC Treaty, Art. 42, first para.)

7. Agriculture ° Common organization of the markets ° Bananas ° Import regime ° Tariff quota ° Introduction and subdivision ° Discrimination ° None ° Right to property ° Acquired rights ° Freedom to pursue a trade or business ° Principle of proportionality ° Breach ° None

(Council Regulation No 404/93)

8. International agreements ° Fourth ACP-EEC Lomé Convention ° Provisions on commercial cooperation ° General trade regime ° Levy on imports of non-traditional ACP bananas exceeding a specified tonnage ° Lawfulness

(Fourth ACP-EEC Convention, Lomé, 15 December 1989, Art. 168 and Protocol 5; Council Regulation No 404/93)

9. Actions for annulment of measures ° Pleas in law ° Not possible to rely on rules of GATT to challenge the lawfulness of a Community act ° Exceptions ° Community act intended to implement a GATT rule and expressly and specifically referring thereto

(EEC Treaty, Art. 173, first para.; General Agreement on Tariffs and Trade)

10. Association of the overseas countries and territories ° Implementing Convention provided for in Article 136 of the Treaty ° Protocol on the tariff quota for imports of bananas ° Abolition not requiring compliance with the rules for amending the Treaty

(EEC Treaty, Arts 43(2), 136 and 236; Protocol on the tariff quota for imports of bananas, para. 4, third subpara.)

1. In the procedure for the adoption of a regulation by the Council, the fact that the proposal from the Commission, amended in accordance with a political agreement accepted by the competent member on behalf of the Commission at a Council session and approved by the college of Commissioners, is not in writing is of no consequence.

Article 149(3) of the Treaty states that as long as the Council has not acted, the Commission may alter its proposal at any time during the procedures mentioned in paragraphs 1 and 2, and it does not require those amended proposals necessarily to be in writing. Such amended proposals, forming part of the Community legislative process, which is characterized by a certain flexibility, necessary for achieving a convergence of views between the institutions, are fundamentally different from the acts which are adopted by the Commission and are of direct concern to individuals, so that strict compliance with the formalities prescribed for the adoption of acts of direct concern to individuals cannot be required for their adoption.

2. Although under Article 190 of the Treaty the proposal from the Commission must be referred to by the Council in acts which it can adopt only on a proposal from the Commission, that article does not require citation of any amendment which may subsequently have been made to that proposal. The position would be different only if the Commission had withdrawn its proposal and replaced it by a fresh proposal.

3. Consultation of the European Parliament, where that is provided for, means that a fresh consultation should take place whenever the text finally adopted, taken as a whole, differs in essence from the text on which the Parliament has already been consulted, except in cases where the amendments substantially correspond to the wishes of the Parliament itself.

4. In pursuing the objectives of the common agricultural policy, the Community institutions must secure the permanent harmonization made necessary by any conflicts between those objectives taken individually and, where necessary, allow any one of them temporary priority in order to satisfy the demands of the economic factors or conditions in view of which their decisions are made.

Thus the Community legislature, which in matters concerning the common agricultural policy has a broad discretion corresponding to the political responsibilities given to it by Articles 40 and 43 of the Treaty, could thus, without infringing Article 39 of the Treaty, establish a common organization of the market in bananas intended to safeguard the income of the agricultural community concerned by guaranteeing the existing level of Community production and providing for suitable machinery for increasing its productivity, to stabilize the market by safeguarding Community production and regulating imports, and, by that machinery supplemented by the mechanism for increasing the import quota if necessary, to assure the availability of supplies.

A breach of Article 39 cannot result from the fact that in certain Member States the establishment of the common organization may have had the effect of increasing prices. The substitution for national arrangements characterized by considerable price differences of a common organization inevitably results in an adjustment of prices throughout the Community; the objective of ensuring reasonable prices for consumers must be considered at the level of the common market as a whole; and priority may be given temporarily to other objectives by the Community legislature.

5. The fact that Regulation No 404/93 on the common organization of the market in bananas pursues objectives of agricultural policy as well as a development policy in favour of the ACP States does not mean that it cannot be based on Article 43 of the Treaty alone.

First, Article 43 of the Treaty is the appropriate legal basis for any legislation concerning the production and marketing of agricultural products listed in Annex II to the Treaty which contributes to the achievement of one or more of the objectives of the common agricultural policy set out in Article 39 of the Treaty, even where other objectives are pursued at the same time.

Secondly, the creation of a common organization of the market requires, alongside the regulation of Community production, the establishment of an import regime to stabilize the markets and ensure sales of Community production if, as in the case of bananas, the internal and external aspects of the common policy cannot be separated, it being understood that the institutions, when making use of their rule-making powers, cannot disregard the international obligations entered into by the Community under the Lomé Convention.

6. The first paragraph of Article 42 of the Treaty recognizes both the priority of the agricultural policy over the objectives of the Treaty in the field of competition and the power of the Council to decide to what extent the competition rules are to be applied in the agricultural sector.

7. The regime of trade with non-member countries in the common organization of the market in bananas established by Regulation No 404/93, in particular the tariff quota for imports and the way it is subdivided, does not constitute a breach of fundamental rights and general principles of law.

With respect to the prohibition of discrimination, it is true that two different categories of traders ° those who previously operated on open national markets and were able freely to obtain supplies of third-country bananas, and those who operated on protected national markets and were ensured the possibility of disposing of Community and traditional ACP bananas despite their higher price ° are not affected in the same way by those measures, since the former now find their import possibilities restricted, whereas the latter may now import specified quantities of third-country bananas.

However, that difference in treatment appears to be inherent in the objective of integrating previously compartmentalized markets, bearing in mind the different situations of the various categories of traders before the establishment of the common organization of the market, and permits the striking of a balance between the two categories of traders, necessary for ensuring the disposal of Community production and traditional ACP production, which the common organization must ensure.

The same considerations justify the restriction on the freedom of traders who previously operated on open markets to pursue their trade or business, the substance of that right not being impaired.

With respect to those traders' right to property, the loss of market shares does not impact that right, since the market share held before the establishment of a common organization of a market constitutes only a momentary economic position exposed to the risks of changing circumstances and is not covered by the right to property. Similarly, a position on the market resulting from an existing situation cannot, especially if that situation is contrary to the rules of the common market, benefit from protection on the basis of acquired rights or legitimate expectation.

Finally, with respect to the principle of proportionality, it cannot be considered that there was a breach in that the objectives of supporting ACP producers and guaranteeing the income of Community producers could have been achieved by measures having less effect on competition and on the interests of certain categories of traders, since there is nothing to show that the Council, which in establishing a common organization of the markets had to reconcile divergent interests and thus select options within the context of the policy choices which are its own responsibility, adopted measures which were manifestly inappropriate having regard to the objective pursued.

8. With respect to the establishment of a tariff quota, the import of bananas from ACP States into the Community falls under Article 168(2)(a)(ii) of the Fourth ACP-EEC Lomé Convention, Protocol 5 on bananas annexed to that Convention, and Annexes LXXIV and LXXV relating to that protocol. Under those provisions, the Community' s only obligation is to maintain the advantages, with respect to access of ACP bananas to the Community market, which the ACP states had before that Convention, so that Regulation No 404/93 was able, without being in breach of Article 168(1) of the Convention, to impose a levy on imports of non-traditional ACP bananas exceeding a specified tonnage.

9. The special features of the General Agreement on Tariffs and Trade, which is characterized by the great flexibility of its provisions, in particular those conferring the possibility of derogation, the measures to be taken when confronted with exceptional difficulties and the settlement of conflicts between the contracting parties, precludes the Court from taking provisions of GATT into consideration to assess the lawfulness of a regulation in an action brought by a Member State under the first paragraph of Article 173 of the Treaty. Those features show that the GATT rules are not unconditional and that an obligation to recognize them as rules of international law which are directly applicable in the domestic legal systems of the contracting parties cannot be based on the spirit, general scheme or terms of GATT. In the absence of such an obligation following from GATT itself, it is only if the Community intended to implement a particular obligation entered into within the framework of GATT, or if the Community act expressly refers to specific provisions of GATT, that the Court can review the lawfulness of the Community act in question from the point of view of the GATT rules.

10. Although the Protocol on the tariff quota for imports of bananas is indeed an integral part of the Treaty since it is annexed to the Implementing Convention on the Association of the Overseas Countries and Territories with the Community, provided for in Article 136 of the Treaty, it was nevertheless adopted as a transitional measure pending standardization of the conditions for importing bananas into the common market. As part of that system, the third subparagraph of paragraph 4 of the Protocol provides that, on a proposal from the Commission, the Council acting by a qualified majority may abolish or amend that quota, with no reservations as to the temporal extent of a decision to abolish it. That means that the Protocol, which moreover cannot have the effect of derogating from a basic provision of the Treaty such as Article 43(2), and the quota which it provides for can be abolished without having to comply with the rules for amending the Treaty laid down in Article 236 of the Treaty.

In Case C-280/93,

Federal Republic of Germany, represented by E. Roeder, Ministerialrat in the Federal Ministry of Economic Affairs, 76 Villemombler Strasse, Bonn, and J. Sedemund, Rechtsanwalt, Cologne, acting as Agents,

applicant,

supported by

Kingdom of Belgium, represented by J. Devadder, Director of Administration in the Legal Service of the Ministry of Foreign Affairs, Foreign Trade and Cooperation with Developing Countries, acting as Agent, with an address for service in Luxembourg at the Belgian Embassy, 4 Rue des Girondins,

Kingdom of the Netherlands, represented by J.W. de Zwaan and T. Heukels, Assistant Legal Advisers in the Ministry of Foreign Affairs, acting as Agents, with an address for service in Luxembourg at the Netherlands Embassy, 5 Rue C.M. Spoo,

interveners,

v

Council of the European Union, represented by J.-P. Jacqué, Director in the Legal Service, B. Schloh, A. Brautigam and J. Huber, Legal Advisers, acting as Agents, with an address for service in Luxembourg at the office of B. Eynard, Manager of the Legal Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

supported by

Commission of the European Communities, represented by P. Gilsdorf, Principal Legal Adviser, and U. Woelker, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of G. Kremlis, of its Legal Service, Wagner Centre, Kirchberg,

Hellenic Republic, represented by V. Kontolaimos, Adviser to the State Legal Service, and V. Pelekou, Legal Representative, acting as Agents, with an address for service in Luxembourg at the Greek Embassy, 117 Val Sainte-Croix,

Kingdom of Spain, represented by A. Navarro González, Director-General for Community Legal and Institutional Coordination, and Rosario Silva de Lapuerta, Abogado del Estado, in the Legal Department for Matters before the Court of Justice, acting as Agents, with an address for service in Luxembourg at the Spanish Embassy, 4-6 Boulevard E. Servais,

French Republic, represented by J.-P. Puissochet, Director of Legal Affairs in the Ministry of Foreign Affairs, and C. de Salins, Adviser on Foreign Affairs, acting as Agents, with an address for service in Luxembourg at the French Embassy, 9 Boulevard du Prince Henri,

Italian Republic, represented by Professor L. Ferrari Bravo, Head of the Legal Department of the Ministry of Foreign Affairs, acting as Agent, with an address for service in Luxembourg at the Italian Embassy, 5 Rue Marie-Adélaïde,

Portuguese Republic, represented by L. Fernandes, Director of the Legal Service of the Directorate-General of the European Communities of the Ministry of Foreign Affairs, M.L. Duarte and J. Santos Cardoso, respectively Legal Adviser and Principal Adviser in that service, acting as Agents, with an address for service in Luxembourg at the Portuguese Embassy, 33 Allée Scheffer,

United Kingdom of Great Britain and Northern Ireland, represented by S.L. Hudson, of the Treasury Solicitor' s Department, acting as Agent, assisted by D. Anderson, Barrister, with an address for service in Luxembourg at the British Embassy, 14 Boulevard Roosevelt,

interveners,

APPLICATION for the annulment of Title IV and Article 21(2) of Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organization of the market in bananas (OJ 1993 L 47, p. 1),

THE COURT,

composed of: O. Due, President, G.F. Mancini, J.C. Moitinho de Almeida, M. Diez de Velasco and D.A.O. Edward (Presidents of Chambers), C.N. Kakouris, R. Joliet, F.A. Schockweiler (Rapporteur), G.C. Rodríguez Iglesias, F. Grévisse, M. Zuleeg, P.J.G. Kapteyn and J.L. Murray, Judges,

Advocate General: C. Gulmann,

Registrar: H.A. Ruehl, Principal Administrator,

having regard to the Report for the Hearing,

after hearing oral argument from the German Government, represented by E. Roeder and J. Sedemund, Rechtsanwalt, acting as Agents, the Belgian Government, represented by J. Devadder, acting as Agent, the Council, represented by J.-P. Jacqué, B. Schloh, A. Brautigam and J. Huber, acting as Agents, the Greek Government, represented by V. Kontolaimos and V. Pelekou, acting as Agents, the Spanish Government, represented by Rosario Silva de Lapuerta, acting as Agent, the French Government, represented by C. de Salins and N. Eybalin, Foreign Affairs Secretary in the Legal Affairs Directorate of the Ministry of Foreign Affairs, acting as Agents, the Portuguese Government, represented by M.L. Duarte, acting as Agent, the United Kingdom, represented by S.L. Hudson, acting as Agent, and D. Anderson, Barrister, and the Commission, represented by P. Gilsdorf, Principal Legal Adviser, and E. de March, Legal Adviser, acting as Agents, at the hearing on 20 April 1994,

after hearing the Opinion of the Advocate General at the sitting on 8 June 1994,

gives the following

Judgment

1 By application lodged at the Court Registry on 14 May 1993, the Federal Republic of Germany brought an action under the first paragraph of Article 173 of the EEC Treaty for a declaration that Title IV and Article 21(2) of Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organization of the market in bananas (OJ 1993 L 47, p. 1, hereinafter "the Regulation") were void.

2 Before considering the pleas in law put forward for annulment, it is appropriate to give a brief summary of the legal position before the Regulation was adopted and of the provisions which are relevant to an assessment of its lawfulness.

The position prior to the Regulation

3 As an explanation of the circumstances in which the Regulation was adopted, the second recital in the preamble states:

"there currently exist within the Member States of the Community producing bananas national market organizations which seek to ensure that producers can dispose of their products on the national market and receive an income in line with the costs of production; ... these national market organizations impose quantitative restrictions which hamper achievement of a single market for bananas; ... some of the Member States which do not produce bananas provide preferential outlets for bananas from the ACP States whilst others have liberal importation rules, which even in one case include a privileged tariff situation; ... these different arrangements prevent the free movement of bananas within the Community and implementation of common arrangements for trade with third countries; ... for the purposes of achievement of the single market, a balanced and flexible common organization of the market for the banana sector must replace the various national arrangements".

4 Before the Regulation was adopted, imports of bananas into the Benelux countries, Denmark and Ireland, essentially from Latin America, were subject only to a customs duty of 20% consolidated within the framework of GATT. In France, the United Kingdom, Italy, Spain, Portugal and Greece the national markets were protected and consumption was covered either by Community production or by imports from the ACP States.

5 Because of structural deficiencies which restrict the competitiveness of Community production, and also ACP production, the production costs and consumer prices for Community bananas and ACP bananas were appreciably higher than those for third-country bananas.

The Protocol on bananas

6 By virtue of the Protocol annexed to the Implementing Convention on the Association of the Overseas Countries and Territories with the Community, provided for in Article 136 of the Treaty (hereinafter "the Banana Protocol") the Federal Republic of Germany enjoyed a special arrangement allowing it to import an annual quota of bananas free of customs duty, determined by reference to the quantities imported in 1956. That base quota was to be progressively reduced as the realization of the common market progressed. The annual quotas were increased in accordance with the rules of calculation in paragraphs 3 and 4. In the event that the overseas countries and territories were unable to supply in full the quantities requested by the Federal Republic of Germany, the Member States concerned declared their readiness, in paragraph 6, to agree to a corresponding increase in the quota.

7 Under the third subparagraph of paragraph 4 of the Banana Protocol,

"Any decision to abolish or amend this quota shall be taken by the Council, acting by a qualified majority on a proposal from the Commission."

8 On the basis of the Banana Protocol, which continued to be applied even though the Implementing Convention had expired on 31 December 1962, the Federal Republic of Germany in 1992 imported from non-member countries 1 371 000 tonnes of bananas free of customs duty, including a quantity of 721 000 tonnes calculated in accordance with paragraphs 3 and 4 and an additional 650 000 tonnes requested and agreed to under paragraph 6 of the Banana Protocol.

The Lomé Convention

9 The import of bananas from the ACP States is governed by the Fourth ACP-EEC Convention, signed in Lomé on 15 December 1989, approved by a decision of the Council and the Commission of 25 February 1991 (OJ 1991 L 229, p. 1, hereinafter "the Lomé Convention").

10 Under Article 168 of the Lomé Convention,

"1. Products originating in the ACP States shall be imported into the Community free of customs duties and charges having equivalent effect.

2.(a) Products originating in the ACP States:

° listed in Annex II to the Treaty where they come under a common organization of the market within the meaning of Article 40 of the Treaty, or

° subject, on import into the Community, to specific rules introduced as a result of the implementation of the common agricultural policy

shall be imported into the Community, notwithstanding the general arrangements applied in respect of third countries, in accordance with the following provisions:

(i) those products shall be imported free of customs duties for which Community provisions in force at the time of import do not provide, apart from customs duties, for the application of any measure relating to their import;

(ii) for products other than those referred to in point (i), the Community shall take the necessary measures to ensure more favourable treatment than that granted to third countries benefiting from the most-favoured-nation clause for the same products.

...".

11 Protocol 5 on bananas, annexed to the Lomé Convention (hereinafter "Protocol 5"), states in Article 1 that:

"In respect of its banana exports to the Community markets, no ACP State shall be placed, as regards access to its traditional markets and its advantages on those markets, in a less favourable situation than in the past or at present."

12 The Joint declaration relating to Protocol 5, which forms Annex LXXIV, states:

"... Article 1 of Protocol 5 does not prevent the Community from establishing common rules for bananas, in full consultation with the ACP, as long as no ACP State, traditional supplier to the Community, is placed as regards access to, and advantages in, the Community, in a less favourable situation than in the past or at present".

13 In a special declaration relating to Protocol 5, set out in Annex LXXV, the Community confirmed the special rights of the ACP States which are traditional suppliers.

The contested regulation

14 According to the third recital in the preamble to the Regulation,

"... so that the Community can respect Community preference and its various international obligations, [the] common organization of the market should permit bananas produced in the Community and those from the ACP States which are traditional suppliers to be disposed of on the Community market providing an adequate income for producers and at fair prices for consumers without undermining imports of bananas from other third countries suppliers".

15 In Titles I and II, the Regulation lays down common quality and marketing standards in the Community and creates producers' organizations and concentration mechanisms.

16 Title III establishes a system of compensation for Community producers for any loss of income, up to a maximum quantity of 854 000 tonnes broken down for the various producer regions in the Community.

"1. A tariff quota of two million tonnes (net weight) shall 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 shall be subject to a levy of ECU 100 per tonne and imports of non-traditional ACP bananas shall be subject to a zero duty.

...

2. Apart from the quota referred to in paragraph 1,

° imports of non-traditional ACP bananas shall be subject to a levy of ECU 750 per tonne,

° imports of third-country bananas shall be subject to a levy of ECU 850 per tonne...".

19 Under Article 19(1),

"The tariff quota shall be opened from 1 July 1993 for:

(a) 66.5% to the category of operators who marketed third-country and/or non-traditional ACP bananas;

(b) 30% to the category of operators who marketed Community and/or traditional ACP bananas;

(c) 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 ...".

20 Pursuant to Article 16, a forecast supply balance is to be prepared each year of production and consumption in the Community and of exports and imports; that balance may be adjusted where necessary during the marketing year.

21 The fourth subparagraph of Article 18(1) provides for the volume of the annual quota to be increased on the basis of the forecast supply balance referred to in Article 16.

23 Under Article 21(2) the tariff quota laid down in the Banana Protocol is discontinued.

24 By order of 29 June 1993 in Case C-280/93 R Federal Republic of Germany v Council [1993] ECR I-3667, the Court dismissed the application by the Federal Republic of Germany for interim measures to permit that State to import free of customs duty the same annual quantities as in 1992 of bananas originating in third countries until the Court' s decision on the substance of the case.

25 By orders of 13 July 1993 the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Portuguese Republic, the United Kingdom and the Commission were granted leave to intervene in support of the form of order sought by the Council; by orders of the same date the Kingdom of Belgium and the Kingdom of the Netherlands were granted leave to intervene in support of the form of order sought by the Federal Republic of Germany.

26 In support of its application, the Federal Republic of Germany puts forward a number of pleas in law alleging breaches of essential procedural requirements, substantive rules and fundamental principles of Community law, the Lomé Convention, the General Agreement on Tariffs and Trade (GATT) and the Banana Protocol.

Breach of essential procedural requirements

33 On 12 February 1993 the competent Member of the Commission declared to the Council:

The Commission confirms that the text before us reflects the Commission' s proposal as amended in the political agreement of December, as that political agreement has been transposed into legal provisions in the text which the Council will vote on.

Breach of substantive rules of Community law

Infringement of Article 39 of the Treaty

48 Moreover, Article 39(1) of the Treaty expressly refers in subparagraph (a) to increasing productivity and in subparagraph (b) to ensuring a fair standard of living for the agricultural community, and Article 40(3) provides for various means to ensure that those objectives are attained, including aids for production or marketing and common machinery for stabilizing imports of the type introduced by the Regulation.

49 Consequently, the Council could, without infringing Article 39 of the Treaty, seek to safeguard the income of the agricultural community concerned by guaranteeing the existing level of Community production and providing for suitable machinery for increasing the productivity of Community producers, including common quality standards and producers' organizations.

50 Nor can the applicant argue that the Regulation conflicts with the objectives of the common agricultural policy set out in subparagraphs (c) and (d) of Article 39(1) of the Treaty, since its intention is precisely to stabilize the market by safeguarding Community production and by regulating imports and since, by that machinery supplemented by the mechanism for increasing the import quota if necessary, it assures the availability of supplies.

52 Accordingly, the submission that there was an infringement of Article 39 is unfounded.

Exceeding the limits of Articles 39, 42 and 43 of the Treaty

53 The Federal Republic of Germany argues that a development policy in favour of the ACP States, as pursued by the Regulation, cannot be based on the provisions on the common agricultural policy but at most on Articles 235 or 238 of the Treaty.

54 In this respect it should be noted, firstly, that Article 43 of the Treaty is the appropriate legal basis for any legislation concerning the production and marketing of agricultural products listed in Annex II to the Treaty which contributes to the achievement of one or more of the objectives of the common agricultural policy set out in Article 39 of the Treaty. Consequently, even where that legislation is directed both to objectives of agricultural policy and to other objectives pursued on the basis of other Treaty provisions, the existence of those provisions cannot be relied on as a ground for restricting the field of application of Article 43 of the Treaty (see the judgments in Case 68/86 United Kingdom v Council [1988] ECR 855, paragraphs 14 and 16, and Case C-131/87 Commission v Council [1989] ECR 3743, paragraphs 10 and 11).

55 Secondly, the creation of a common organization of the market requires, alongside the regulation of Community production, the establishment of an import regime to stabilize the markets and ensure sales of Community production if, as in the present case, the internal and external aspects of the common policy cannot be separated.

57 Consequently, the argument that the limits of Articles 39, 42 and 43 of the Treaty were exceeded with respect to the regime for imports from the ACP States is unfounded.

Breach of the principle of undistorted competition

58 The Federal Republic of Germany submits that the way the tariff quota is allocated conflicts with the objective of undistorted competition laid down in Article 3(f) of the Treaty, in that it effects, by an act of the public authorities, a redistribution of market shares and income to the detriment of traditional importers of third-country bananas. Since those importers cannot obtain supplies on the Community and ACP markets and are obliged to buy import licences for third-country bananas from Community and ACP banana traders, the latter enjoy gratuitous financial advantages.

"The provisions of the Chapter relating to rules on competition shall apply to production of and trade in agricultural products only to the extent determined by the Council within the framework of Article 43(2) and (3) and in accordance with the procedure laid down therein, account being taken of the objectives set out in Article 39".

62 In those circumstances the complaint of an infringement of the principle of undistorted competition cannot be upheld.

63 The arguments in support of this complaint relating to the damage caused to importers of third-country bananas will be examined below in the context of the analysis of the plea in law alleging breach of fundamental rights and general principles of law.

Breach of fundamental rights and general principles of law

64 The Federal Republic of Germany argues that the subdivision of the tariff quota constitutes unjustified discrimination against traders in third-country bananas. The loss of market shares suffered by those operators constitutes an infringement of their right to property, their freedom to pursue their trade or business and their acquired rights. The introduction of the tariff quota is contrary to the principle of proportionality, both as regards the formula for allocating the quota and the prohibitive rate for imports over and above the quota, given that a system of direct aid to producers would have sufficed to ensure the disposal of Community and ACP production.

65 With respect to the complaint of breach of the principle of non-discrimination, the applicant argues that the subdivision of the tariff quota in favour of importers of Community and/or traditional ACP bananas is in fact tantamount to a transfer to them of a 30% market share by an act of the public authorities. It argues that that subdivision to the detriment of the class of operators trading in third-country bananas, without any justification, constitutes discrimination contrary to the Treaty.

66 The Court notes that under the second subparagraph of Article 40(3) of the Treaty the common organization of agricultural markets to be established within the framework of the common agricultural policy must "exclude any discrimination between producers or consumers within the Community".

69 To find whether there is discrimination, the contested regulation must therefore be examined to see whether it treats comparable situations differently.

75 Consequently, the complaint of breach of the principle of non-discrimination must be rejected as unfounded.

76 The lawfulness of the measures taken as regards the various categories of economic operators must therefore be examined with respect to the applicant' s other complaints.

81 With reference to the alleged infringement of the freedom to pursue a trade or business, it must be stated that the introduction of the tariff quota and the machinery for subdividing it does indeed alter the competitive position of economic operators on the German market in particular, who were previously the only ones able to import third-country bananas free of any tariff restriction, within a quota which was adjusted annually to the needs of the market. It must still be examined whether the restrictions introduced by the Regulation correspond to objectives of general Community interest and do not impair the very substance of that right.

83 The differing situations of banana traders in the various Member States made it necessary, in view of the objective of integrating the various national markets, to establish machinery for dividing the tariff quota among the different categories of traders concerned. That machinery is intended both to encourage operators dealing in Community and traditional ACP bananas to obtain supplies of third-country bananas and to encourage importers of third-country bananas to distribute Community and ACP bananas. It should also in the long term allow economic operators who have traditionally marketed third-country bananas to participate, at the level of the overall Community quota, in the two sub-quotas introduced.

84 With respect in particular to the applicant' s criticism that the application of the Regulation has given rise to trading in import licences between traders in Community and traditional ACP bananas and traditional importers of third-country bananas, to the detriment of the latter, it must be noted that Article 20 of the Regulation accepts the principle that licences are transferable. The practical consequence of that principle is that the holder of a licence, instead of himself importing and selling third-country bananas, may assign his import rights to another economic operator who himself wishes to import.

85 The principle of transferability, regulated in Commission 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), adopted after the present application was brought, is not peculiar to the common organization of the market in bananas, but exists in other sectors of agricultural policy, in particular with respect to trade relations with non-member countries.

88 The applicant also argues that the arrangements for trade with third countries are in breach of the principle of proportionality, in that the objectives of supporting ACP producers and guaranteeing the income of Community producers could have been achieved by measures having less effect on competition and on the interests of certain categories of economic operators.

96 Moreover, the system of trade with third countries, in particular the introduction of a tariff quota and machinery for subdividing it, is but one of the instruments provided for by the Regulation, alongside the introduction of common quality and marketing standards and rules on assistance, to ensure in particular that Community production can be disposed of.

97 Nor is it clear that the alternative measures suggested by the applicant are suitable for achieving the objective of the integration of markets, which is the basis of any common organization of a market.

98 It follows that the complaints of breach of the right to property, disregard of acquired rights, infringement of the freedom to pursue a trade or business and failure to comply with the principle of proportionality must likewise be rejected as unfounded.

99 For all those reasons the plea in law alleging breach of substantive rules of Community law must be rejected.

Infringement of Article 168 of the Lomé Convention

100 The Federal Republic of Germany submits that Article 168(1) of the Lomé Convention exempts imports of ACP products from all customs duties, and that the Council cannot rely on Article 168(2)(a) to apply different treatment to traditional and non-traditional imports of ACP bananas.

Infringement of GATT rules

Infringement of the Banana Protocol

113 The Federal Republic of Germany submits that the Banana Protocol is an integral part of the Treaty and that any amendment of that protocol should have been done in accordance with the conditions under Article 236 of the Treaty. The derogation, in paragraph 4 of the Banana Protocol, from the rule of unanimity relates only to the possibility of amending an annual quota and does not permit the abolition of the Protocol as such.

114 It must be acknowledged that the Banana Protocol is indeed an integral part of the Treaty since it is annexed to the Implementing Convention on the Association of the Overseas Countries and Territories with the Community, even though that convention expired on 31 December 1962.

115 However, the Banana Protocol was adopted as a transitional measure pending standardization of the conditions for importing bananas into the common market. Its transitional nature is clearly demonstrated by the reference to successive stages in the establishment of the common market, each of which entails a reduction of the quota compared with imports in the base year 1956.

116 As part of that system the third subparagraph of paragraph 4 of the Banana Protocol provides that, on a proposal from the Commission, the Council acting by a qualified majority may abolish or amend that quota, with no reservations as to the temporal extent of a decision to abolish it.

117 Moreover, to accept the applicant' s point of view would effectively make it impossible to set up a common organization of the market in bananas under the conditions set out in Article 43(2) of the Treaty. The Banana Protocol cannot have the effect of derogating from a basic provision of the Treaty.

118 Consequently, the plea in law alleging an infringement of the Banana Protocol must be rejected.

119 Since none of the pleas in law in support of the claim for annulment can be upheld, the application of the Federal Republic of Germany must be dismissed in its entirety.

Costs

120 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. Since the Federal Republic of Germany has been unsuccessful, it must be ordered to pay the costs, including those of the proceedings for interim relief. In accordance with Article 69(4) of the Rules of Procedure, the Member States and the Commission, which have intervened in the case, must be ordered to bear their own costs.

On those grounds,

THE COURT

hereby:

1. Dismisses the application;

2. Orders the applicant to pay the costs, including those of the proceedings for interim relief;

3. Orders the interveners to bear their own costs.