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3. Before the basic regulation entered into force on 1 July 1993, there were various national market organizations in the Member States. Those arrangements may be divided 2. In the present case, the Kingdom of Bel- into two groups. In the first group, which gium and the Federal Republic of Germany included France, Spain and the United King- seek the annulment of the abovementioned dom, domestic production and ACP produc- regulations on the grounds, in particular, that tion occupied a privileged position, whereas Council Regulation (EEC) N o 404/93 of in the other group, which included Germany, 13 February 1993 on the common organiza- Belgium and the Netherlands, the organiza- tion of the market in bananas 4 (hereinafter tion of the market was open, in the sense 'the basic regulation') did not provide an that it was possible to import bananas from adequate legal basis for the Commission to Latin America without any quantitative restriction. 5

(b) ... to ensure a fair standard of living for the agricultural community, in particular by increasing the individual earnings of persons engaged in agriculture; Whereas a forecast supply balance drawn up each year should assess the prospects for production and consumption in the Com- munity; whereas it should be possible to revise that balance during the year in the (c) to stabilize markets; light of circumstances, including specific cli- matic events; (ninth recital)

(d) to assure the availability of supplies;

Whereas in order to ensure satisfactory mar- keting of bananas produced within the Com- (e) to ensure that supplies reach consumers munity and of products originating in the at reasonable prices'. ACP States within the framework of the Lomé Convention Agreements, while main- taining traditional trade patterns as far as possible, provision should be made for the annual opening of a tariff quota; whereas, on the one hand, imports of bananas from third 5. The preamble to the basic regulation countries would be subject to a tariff of includes the following recitals: E C U 100 per tonne, 6 which corresponds to the current rate under the Common Cus- toms Tariff, and, on the other hand, imports of non-traditional bananas from the ACP would be subject to zero duty in accordance

'Whereas, so that the Community can respect Community Preference and its vari- 6 — The customs duty was reduced to ECU 75 per tonne by ous international obligations, that common Regulation No 3290/94 (see footnote 4).

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income and the average production income 2. The forecast supply balance shall be pre- obtained during the year in question. pared on the basis of:

7. Title IV lays down the rules governing trade with third countries. Article 15 (Article — available figures concerning quantities of 15a after the amendment introduced by bananas marketed in the Community Regulation N o 3290/94) defines 'traditional during the previous year, broken down ACP bananas' by reference to the quantities according to their origin, allocated to certain ACP States as set out in the annex to the regulation. It emerges there- from that the total quantity allocated in that context is 857 700 tonnes, of which 127 000 tonnes for Saint Lucia and 71 000 tonnes for Dominica. 'Non-traditional ACP bananas' — forecasts of the production and market- are imports from an ACP State which exceed ing of Community bananas, the quantity defined in the annex to the regulation for the country in question or imports from ACP States not listed in the annex. 'Third-country bananas' are defined as imports of third countries other than ACP States, which in practice means Latin Ameri- can producer countries. — forecasts of imports of traditional ACP bananas,

8. The basic regulation contains, further- more, the following relevant provisions: — forecasts of consumption based in par- ticular on recent trends in consumption and the evolution in market prices.

'Article 16

1. A tariff quota of 2.2 million tonnes 8 (net weight) shall be opened each year for imports of third-country bananas and 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 estab- Where Community demand determined on lished in the Community who started the basis of the supply balance referred to in marketing bananas other than Commu- Article 16 increases, the volume of the quota nity and/or traditional ACP bananas shall be increased in consequence, in accord- from 1992. ance with the procedure laid down in Article 27. Where necessary, that adjustment shall be carried out prior to the date of 30 November preceding the marketing year concerned.

2. O n the basis of separate calculations for each of the categories of operators referred 8 — The original wording of the basic regulation of 13 February 1993 referred to 2 million tonnes. to in paragraph 1(a) and (b), each operator

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shall obtain import licences on the basis of In accordance with the same procedure, the the average quantities of bananas that he has Commission shall adopt detailed rules for sold in the three most recent years for which implementing this Title. Those rules may figures are available. For the category of cover in particular: operators referred to in paragraph 1(a), the quantities to be taken into consideration shall be the sales of third-country and/or non-traditional ACP bananas. In the case of operators referred to in paragraph 1(b), sales of traditional ACP and/or Community — additional measures concerning the issue bananas are to be taken into consideration ... of licences, their term of validity, the con- ditions governing transferability and the requisite security mechanism; those rules may also include determination of a reconsideration period,

TITLE V 2. The representative of the Commission shall submit a draft of the measures to be taken. The Committee shall deliver its opin- ion on such measures within a time limit to be set by the Chairman according to the urgency of the questions under consider- General provisions ation. An opinion shall be adopted by the majority laid down in Article 148(2) of the Treaty.

3. The Commission shall adopt measures which shall apply immediately. However, if these measures are not in accordance with the opinion of the Committee, they shall Article 26 forthwith be communicated by the Commis- sion to the Council. In that event, the Com- mission may defer application of the mea- sures which it has adopted for not more than one month from the date of such communi- 1. A Management Committee for Bananas cation. (hereinafter called the "Committee") shall be established, consisting of representatives of the Member States and chaired by a repre- sentative of the Commission. The Council, acting by a qualified majority, may take a different decision within one month.

Article 27

Article 30

1. Where reference is made to the procedure laid down in this Article, the Chairman shall If specific measures are required after July refer the matter to the Committee either on 1993 to assist the transition from arrange- his own initiative or at the request of the ments existing before the entry into force of representative of a Member State. this Regulation to those laid down by this

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10. According to Commission Decision 94/654/EC of 29 September 1994 adopting the forecast supply balance for banana pro- duction, consumption, imports and exports for the Community for 1994, 10 each year, a forecast supply balance is to be prepared pursuant to Article 16 of the basic regu- 'Whereas on 10 September 1994 tropical lation, the main purpose of which is to estab- storm Debbie caused severe damage to the lish the outlook for Community production banana plantations in the Community and consumption and the forecasts for regions of Martinique and Guadeloupe and imports of traditional ACP bananas, and in the ACP States of Saint Lucia and hence the supply requirements for the Dominica; whereas the effects of these exceptional circumstances on production in the regions affected will be felt until July 9 — OJ 1993 L 142, p. 6, as amended most recently by Commis- 1995 and will greatly affect imports and sup- sion Regulation (EC) No 1409/96 of 19 July 1996 amending plies to the Community markets during the Regulation (EEC) No 1442/93 laying down detailed rules for the application of the arrangements for importing fourth quarter of 1994; whereas this is likely bananas into the Community, as regards eligibility criteria for category C operators and certain dates relevant to the to cause an appreciable increase in market administration of Community tariff quotas (OJ 1996 L 181, prices in certain regions of the Community; p. 13). 10 — OJ 1994 L 254, p. 90. (second recital)

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Whereas Article 16(3) of Regulation (EEC) suppliers while safeguarding the interests of N o 404/93 stipulates that where necessary, in operators who are victims of such excep- particular to take account of the effects of tional events; (fifth recital) exceptional circumstances affecting produc- tion or import conditions, the forecast sup- ply balance may be adjusted and, in such a case, the tariff quota is adapted; (third recital)

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According to Article 2(1), the quantities lation in order to implement the obligations referred to in Article 1(2) are to be allocated undertaken by the Community in the con- to the operators who: text of the Uruguay Round.

'— include or directly represent banana pro- ducers affected by tropical storm Deb- bie, 14. To supplement Regulation N o 3290/94, the Commission adopted a number of addi- tional implementing and amending provi- sions by means of Regulation (EC) N o 478/95. 13 Under Article 1(1) of Regulation — and who, during the last quarter of 1994, N o 478/95, certain supplier countries enu- are unable to supply, on their own merated in Annex I were allocated specific account, the Community market with shares of the tariff quota. 14 The Dominican bananas originating in the regions or Republic, Belize, Côte d'Ivoire, Cameroon countries referred to in Article 1(2) on and the remaining ACP countries taken account of the damage caused by tropical together were allocated a total quantity of storm Debbie'. 90 000 tonnes of non-traditional ACP bananas. According to Article 1(2), 'where the tariff quota is increased in application of Article 18(1) of Regulation (EEC) N o 404/93, the quantities allocated [to the coun- tries referred to in Regulation N o 478/95] shall be increased ...'. 12. O n 18 November 1994 the Commission adjusted the forecast supply balance for 1994 in line with the findings made in the first Debbie regulation. 1 1The forecasts for Com- munity production and the importation of traditional ACP bananas were therefore set at 607 100 and 648 500 tonnes respectively. It appears from Article 2(1) that, if, for rea- sons of force majeure, a supplier country is not able to export to the Community market all or part of the quantities allocated to it, it may supply products to the Community

18. The Kingdom of Belgium and the Fed- eral Republic of Germany claimed that nei- ther Article 16(3) nor Article 20 nor Article 30 of the basic regulation on which the Deb- bie regulations are based provide the neces- 16. O n 6 April 1995, the Commission sub- sary legal basis. The German Government mitted a proposal for a regulation amending claimed, moreover, that the Debbie regula- the basic regulation in which it expressly tions did not contain an adequate statement provided for the possibility of departing of reasons. from the allocation rules laid down in Article 19, in order to cope with cases of force majeure. 1 6The Commission's proposal has not yet been adopted.

15 — See footnote 2. 16 — Proposal for a Council Regulation (EC) amending Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organization of the market in bananas, Regulation 19. The Commission, supported by the (EEC) No 1035/72 of the Council of 18 May 1972 on the common organization of the market in fruit and vegetables, French Republic and the United Kingdom, and Council Regulation (EEC) No 2658/87 of 23 July 1987 contended that the applications should be on the tariff and statistical nomenclature and on the Com- mon Customs Tariff (OJ 1995 C 136, p. 18). dismissed.

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22. I shall begin my analysis by pointing out that the Court, most recently in its judgment in Case C-478/93 Netherlands v Commis- sion, 17 has held that '[s]ince only the Com- mission is in a position to keep track of agri- 21. The Commission and the United King- cultural market trends and to act quickly dom submit that the Debbie regulations are when necessary, the Council may confer on based on Articles 16(3) and 20 of the basic it wide powers in that sphere. Consequently, regulation. Article 19(4) of the basic regu- lation is concerned only with increases in the tariff quota as provided for in Article 18(1), 17 — C-478/93 Netherlands v Commission [1995] ECR I-3081, which deals with increases in demand. paragraphs 30 and 31.

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the limits of those powers must be deter- based on a quota system which distinguishes mined by reference amongst other things to between three sources: the essential general aims of the market orga- nization ... Thus, the Court has held that, in matters relating to agriculture, the Commis- sion is authorized to adopt all the measures which are necessary or appropriate for the implementation of the basic legislation, pro- 1) Community bananas, vided that they are not contrary to such leg- islation or to the implementing legislation adopted by the Council ...'

2) traditional ACP bananas and

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tional ACP bananas and, hence, the ability to referred to in paragraph 1 in accordance with market such bananas. paragraphs 2 and 3.

28. Article 16(3) provides that, where neces- 26. In order to guarantee equilibrium sary, in particular to take account of the between total supply and consumption, a effects of exceptional circumstances affecting forecast supply balance has to be prepared production or import conditions, the balance each year pursuant to Article 16(1). The may be adjusted during the marketing year. forecast supply balance constitutes the basis In such a case, the tariff quota provided for for the assessment provided for in Article in Article 18 is to be adapted in accordance 18(1) with a view to determining whether the with the management committee procedure tariff quota ought to be increased for third- laid down in Article 27. country and non-traditional ACP bananas for the following year beyond the 2 million tonnes provided for. As Decision 94/654 makes clear, the main purpose of the supply balance is to establish the outlook for Com- munity production and consumption and forecasts for imports of traditional ACP bananas, and hence the supply requirements 29. The question therefore is whether it may for the Community market in terms of be inferred from the term 'adapted' that the third-country and non-traditional ACP other quantities of third-country and non- bananas and the requisite tariff quota. traditional ACP bananas which may be imported into the Community under the tar- iff quota on account of exceptional condi- tions must not be regarded as being increases having to be allocated in accordance with the rules laid down in Article 19(4).

to March? 18 Is the expression 'tariff quota' is an independent provision which does not in Article 16(3) the same as the expression necessarily have any connection with 'volume of the tariff quota' used in the last Articles 18(1) and 19. The two latter provi- subparagraph of Article 18(1) and does sions are primarily tailored to what might be Article 19(1) and (4), which deals with the categorized as the normal situation in which allocation of the 'tariff quota', refer to one, it is to be expected when fixing the annual both, or neither of those two provisions? tariff quota that, as a result of well-known, Why does the basic regulation talk of a fore- normal market situations, a tariff quota of 2 cast supply balance and of an adjustment of million tonnes will not be sufficient to satisfy that balance, whereas it appears from Com- Community demand for third-country and mission Decisions 94/654 and 95/407 19 that non-traditional ACP bananas. In such case, the accepted practice apparently is that the any increase must, in accordance with Article supply balance is drawn up at the end rather 19(4), be carried out using the allocation for- than at the beginning of the calendar year? mula laid down in Article 19. The fact that it Finally, the question arises whether Article is not the 'volume of the tariff quota' which 16(3) provides a basis for a downward is increased, as provided for in Article 18(1), adjustment of the abovementioned quantities but rather the 'quota' which is adapted in where the tariff quota falls below 2 million Article 16(3) and the fact that Article 18, tonnes or whether it may be inferred from which is related to Article 19, defines 'quota' Article 18(1) that that quantity is a fixed in such a way that it is the content of minimum and that the changes to which the Articles 18 and 19 as a whole which may be forecast supply balance provided for in 'adapted' pursuant to Article 16(3), militate Article 16 may lead are invariably increases. in favour of that interpretation. In any event, Article 18(1) does not mention reducing the tariff quota in the context of the drawing up of the provisional supply fore- cast.

of view of both demand and supply, may is ensured by applying the allocation formula either be normal or exceptional. One thing, provided in Article 19. however, is certain. The effect of the system laid down by the regulation in question which makes provision for fixed quotas for each country for the purpose of providing aid to the Community production of bananas and the importation of traditional ACP bananas is that a reduction in the sup- ply of Community and traditional ACP bananas must perforce result in an increase 35. The situation is altogether different in the quantities of third-country and non- where, on the other hand, some operators traditional ACP bananas. suffer the consequences of exceptional cir- cumstances. Each of the traditional ACP producer countries have been allocated a fixed quota. If a country is not able to attain its quota, it cannot make up the shortfall with third-country or non-traditional ACP bananas from another producer country. It may also be difficult for an operator who has 33. Since Article 16(3) may thus be appli- lost his usual suppliers of Community cable to a number of different situations, it bananas or traditional ACP bananas to seems to me that it is possible to assume that replace them by other suppliers of Commu- the Community legislature intended to leave nity or traditional ACP bananas. Since all it to the Commission, applying an adminis- Community and traditional ACP bananas trative committee procedure, to make the may be marketed unrestrictedly, it is reason- necessary adaptations in the light of actual able to consider that a producer of such circumstances. As I shall show below, such bananas will give preference to his traditional an interpretation is consistent both with the distribution channels before making excep- purpose of the regulation and with the Com- tional deliveries to an operator faced with munity principle of equal treatment, accord- exceptional circumstances who is linked to a ing to which the same rule must be applied competing producer. In the circumstances, to comparable situations and different situa- therefore, operators who have suffered dam- tions should be treated differently. 20 age will have to procure third-country and non-traditional ACP bananas. They will be unable to do so, however, unless they can obtain import licences which correspond to their losses.

allocation formula set out in Article 19, the 38. The unacceptable nature of such an out- operators who had suffered damage could come is underscored by the fact that Council have allocated to them only a small percent- Regulation N o 3290/94 and Commission age of the additional total quantity, with the Regulation N o 478/95 provide a legal basis result that they would be ousted from the the purpose of which is to enable third- market by other operators who had not suf- country producer States having a specific fered any damage and who, in the circum- national quota which have suffered damage stances, would obtain an additional volume by reason of force majeure to supplement of the quota solely by reason of exceptional that quota with bananas produced in the circumstances which did not affect them at other third countries to which a national all. The damage to the economic operators quota has also been allocated. EC and ACP who suffered it would, however, not be producers who have suffered damage by rea- confined to the year in which the natural son of force majeure and have no other disaster took place. Those operators would option but to replace the crop which they also receive fewer import licences in the fol- have lost by third-country and non- lowing three years, since the allocation of traditional ACP bananas could not do so if import licences for third-country and non- the interpretation of the Kingdom of Bel- traditional ACP bananas is carried out, pur- gium and the Federal Republic of Germany suant to Article 19(2) of the basic regulation, were to be followed. Under that interpreta- on the basis of the average quantities of tion, such situations, where the quota Community and traditional ACP bananas provided for cannot be supplied from own sold over the current three-year period. production as a result of exceptional circum- stances, would be treated differently.

stances would have been able to obtain only Community and in the ACP States to be dis- very minimal compensation for the quanti- posed of on the Community market provid- ties lost and would have had no real oppor- ing an adequate income for producers and at tunity of replacing those quantities by other fair prices for consumers without undermin- bananas, and the other operators, namely the ing imports of bananas from other third- importers of third-country bananas, would country suppliers. The system provided for have obtained an unwarranted advantage at by the basic regulation was intended to the expense of the former in the shape of ensure that those producers maintained their additional import certificates for most of the position on the market after the abolition of 98 900 tonnes in question. the national market organizations. That result is obtained by the grant of compensa- tory aid and exemptions from customs duty and by restricting imports from third coun- tries. That objective reflects Article 39(l)(b) to (e), according to which a fair standard of living is to be ensured for producers, reason- able prices are to be ensured for consumers and markets are to be stabilized. 40. In order to deal with that situation and to ensure that the operators who had suf- fered damage should not have their reference quantities reduced for the subsequent three- year period, the Commission allocated, as we know, additional quantities to operators who had been affected by tropical storm Debbie. The Debbie regulations were designed so that the additional quantities should benefit producers directly, since they were allocated to producer organizations or to operators who directly represent the producers. It was thereby ensured that the economic benefits of the operation would accrue to the produc- 42. In view of the foregoing, it cannot be ers, as is also the case with Regulation considered that the Community legislature N o 478/95. intended to introduce rules under which producers of Community and traditional ACP bananas who suffered damage as a result of exceptional circumstances would find themselves, as a consequence of the sys- tem set up by the rules in question, in a situ- ation in which they could not procure the necessary quantities with which to supply their traditional customers. O n the contrary, 41. According to the third recital of the pre- as appears from the 14th recital in the pre- amble to the basic regulation, the main pur- amble to the basic regulation, the Commu- pose of the common organization of the nity legislature sought to set up a system market, apart from attainment of the internal designed not to disrupt existing commercial market, is to permit bananas produced in the links.

47. The Commission and the French and Article 30 of the basic regulation United Kingdom Governments contended, on the other hand, that what is involved is a transitional measure covered by Article 30 of the basic regulation. The national market arrangements which previously applied in France and in the United Kingdom con- tained provisions to enable importers whose 45. Since I believe that the Debbie regula- normal supplies had been affected by excep- tions have a valid legal basis in Articles 16(3) tional circumstances to import bananas from and 20 of the basic regulation, it is not neces- Latin America to offset the shortfall. The sary per se to analyse whether they could Debbie regulations which contain the corre- have been based on the rule set out in Article sponding rules thus assist transition from the 30. That article provides that, if specific mea- national legislation. The Commission is sures are required after July 1993 to assist the entitled to adopt transitional measures, pur- transition from arrangements existing before suant to Article 30 of the basic regulation,

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until such time as the basic regulation is common organization by rules which could supplemented by specific provisions con- not have been foreseen by the persons con- cerning the consequences of exceptional cir- cerned at the time. cumstances.

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52. Even if that legal basis might possibly be possible to determine whether the compen- envisaged, it should none the less be pointed sation paid was excessive. out that to assume that Article 30 contains such a legal basis would have particularly far-reaching consequences also for the inter- pretation of transitional provisions in other fields. Since the problems which have arisen have absolutely nothing to do with the tran- sition from national arrangements to the common organization, to accept the idea that such a legal basis exists even though the basic regulation contains no explicit evidence for 54. The Commission contends that all the that conclusion would enable the Commis- relevant information may be found in the sion — to put it bluntly — to diverge from Debbie regulations and that it is not required any provision in that regulation. I therefore to indicate all the factual circumstances on believe that the reference made by the Com- which a legal measure is based. mission in the Debbie regulations to Article 30 of the basic regulation as a legal basis is unjustified. I would point out, how- ever, that this finding cannot result in Articles 1(2) and 2 of the Debbie regulations being annulled as sought, since, as I said above, it may be considered that those articles have an adequate legal basis in Articles 16(3) and 20 of the basic regulation. 55. I would first point out that, according to the case-law of the Court, the statement of reasons required by Article 190 of the Treaty must show clearly and unequivocally the reasoning on which the measure is based in such as way as to make the persons con- cerned aware of the reasons for the measure and thus enable them to defend their rights and the Court to exercise its powers of review. 21 None the less, the statement of reasons is not required to specify all the rel- The plea in law alleging that the statement evant matters of fact or of law: it must be of reasons was inadequate assessed with regard to its context and weighed against practical realities and the time and technical facilities available for making the decision. 22

56. The context of the Debbie regulations Costs was clearly described in the second recital, in which the cause, the date and the place of the damage are set out. It also appears from the fourth recital that the increase in the quota is intended to guarantee the supply to the Community of bananas. The tariff quota was accordingly increased in Regulation N o 57. Under Article 69(2) of the Rules of Pro- 2791/94 from 2 118 000 tonnes, in accord- cedure, the unsuccessful party is to be ance with the forecast balance contained in ordered to pay the costs if they have been Decision 94/654, to 2 171 400 tonnes, and in applied for in the successful party's plead- Regulation N o 510/95 from 2 200 000 tonnes ings. Since the Commission has applied for to 2 245 400 tonnes. The remainder of the costs, I propose that the Kingdom of Bel- 98 900 tonnes was allocated among the vari- gium and the Federal Republic of Germany ous producer countries which suffered dam- be ordered to pay the costs of the proceed- age. In my view, it is difficult to see how the ings. Commission could have provided a more detailed statement of reasons and, at the same time, preserved that legislative act's character as a regulation. If the German Government considered that it could not place confidence in the quantities set out in the regulations, it could have approached the 58. Under Article 69(4) of the Rules of Pro- Commission in order to find out the basis cedure, Member States and institutions for the calculations in the regulations and which intervene in the proceedings are to check them. The plea that the statement of bear their own costs. The French Republic reasons was defective is therefore, in my and the United Kingdom must therefore opinion, unfounded. bear their own costs.