C-122/95

Kingdom of Belgium, represented by J. Devadder, General Adviser in the Minis- try 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. Bändillä, Director in its Legal Service, A. Bräutigam, Legal Adviser, and J.-R Hix, of its Legal Service, acting as Agents, with an address for service in Luxembourg at the office of A. Morbilli, Director-G eneral of the Legal Affairs Directorate of the European Investment Bank, 100 Boulevard Konrad Adenauer,

defendant,

* Language of the case: German.

interveners,

A P P L I C A T I O N 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 Repub- lic of Venezuela,

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T H E 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,

1 By application lodged at the Court Registry on 10 April 1995, the Federal Repub- lic of Germany brought an action under the first paragraph of Article 173 of the E C 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

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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) N o 404/93 of 13 February 1993 on the com- mon organisation of the market in bananas (OJ 1993 L 47, p. 1) substituted a com- mon regime governing trade with third countries for the various national regimes previously in force.

3 Article 18(1) of Regulation N o 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 A C P bananas. Within the framework of the tariff quota, imports of third-country bananas were subject to a customs duty of E C U 100 per tonne, whilst there was no duty on imports of non-traditional A C P bananas.

8 O n 18 January 1994 the panel set up under that procedure submitted a report con- cluding that the import regime introduced by Regulation N o 404/93 was incom- patible with the GATT rules.

9 That report was not adopted by the parties to GATT.

10 O n 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

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1 3 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.

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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 A C P 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 N o 404/93. That point provides fur- ther:

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 W T O ' ) . An annex to Schedule LXXX reproduces the Framework Agreement.

21 O n 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 N o 404/93.

— the Agreement establishing the World Trade Organisation, and also the Agree- ments in Annexes 1, 2 and 3 to that Agreement.'

26 That decision was published at page 1 et seq. of issue N o 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 N o L 336 of the Official Journal of the European Communities was not available until 13 February 1995.

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27 Council Regulation (EC) N o 3290/94 of 22 December 1994 on the adjustments and transitional arrangements required in the agriculture sector in order to imple- ment 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 N o 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 E C U 75 per tonne.

28 Commission Regulation (EC) N o 478/95 of 1 March 1995 on additional rules for the application of Regulation N o 404/93 as regards the tariff quota arrangements for imports of bananas into the Community and amending Regulation N o 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.

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 Jour- nal 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 meas- ure 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 meas- ure, 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.

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 objec- tion 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 interna- tional 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 con- cluding that agreement on behalf of the Community.

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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 Coun- cil'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 negotia- tions and that its annulment cannot therefore be sought in isolation without com- promising 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] E C R 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.

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 coun- tries. 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.

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5 0 0The 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 N o 404/93 applies to the increase in the tariff quota provided for in the Frame- work 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.

The plea alleging breach of the general principle of non-discrimination

5 4 In considering the merits of the plea alleging breach of the general principle of non-discrimination it is necessary to distinguish between the introduction of coun- try 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 A C P bananas as distinct from traditional imports from the A C P 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 Com- mission [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.

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62 It is therefore necessary to consider whether that difference in treatment is incom- patible 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] E C R 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] E C R 1795, paragraph 16, Case 125/77 Koninklijke Scholten-Honig v Hoofd- produktschap 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 con- trary, 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 estab- lished by Regulation N o 404/93, and in particular the system of tariff-quota alloca- tion, involves certain restrictions or differences of treatment detrimental to Cat- egory 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 A C P bananas, have gained an opportunity to import specified quantities of third-country bananas.

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 intro- duced, been subjected to similar restrictions and differences in treatment.

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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 export- licence 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 N o 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 N o 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.

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 prop- erty 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 gen- eral Community interest pursued by the establishment of a common organisation

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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 (para- graphs 94 and 95).

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.

O n those grounds,

THE COURT

hereby:

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