C-364/95

T. PORT v HAUPTZOLLAMT HAMBURG-JONAS

JUDGMENT OF THE COURT 10 March 1998 *

In Joined Cases C-364/95 and C-365/95,

REFERENCES to the Court under Article 177 of the EC Treaty by the Finan- zgericht Hamburg (Germany), for a preliminary ruling in the proceedings pending before that court between

T. Port GmbH & Co.

and

composed of: G. C. Rodriguez Iglesias, President, C. Gulmann, M. Wathelet, R. Schintgen (Rapporteur), (Presidents of Chambers), G. F. Mancini, P. J. G. Kapteyn, J. L. Murray, D. A. O . Edward, J.-P. Puissochet, G. Hirsch and P. Jann, Judges,

Advocate General: M. B. Elmer, Registrar: H . A. Rühi, Principal Administrator,

after considering the written observations submitted on behalf of:

— T. Port G m b H & Co., by G. Meier, Rechtsanwalt, Cologne,

— the German Government, by E. Röder, Ministerialrat in the Federal Ministry of Economic Affairs, acting as Agent,

— the Spanish Government, by A. J. Navarro Gonzalez, Director-General for Community Legal and Institutional Coordination, and R. Silva de Lapuerta, Abogado del Estado, of the State Legal Service, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of T. Port G m b H & Co., represented by G. Meier; the German Government, represented by E. Röder; the Spanish Govern- ment, represented by R. Silva de Lapuerta; the French Government, represented by F. Pascal, Attaché d'Administration Centrale in the Legal Directorate of the Ministry of Foreign Affairs, acting as Agent; the Council, represented by A. Brau- tigam, J. Huber and J.-P. Hix; and the Commission, represented by P. J. Kuyper and K.-D. Borchardt, at the hearing on 4 February 1997,

after hearing the Opinion of the Advocate General at the sitting on 24 June 1997,

gives the following

Judgment

1 By orders of 22 and 27 September 1995, received at the Court on 16 November 1995, the Finanzgericht (Finance Court), Hamburg, referred to the Court for a preliminary ruling under Article 177 of the E C Treaty three questions on the inter- pretation of Article 234 of that Treaty, on the validity of Commission Regulation (EC) N o 478/95 of 1 March 1995 on additional rules for the application of Council Regulation (EEC) N o 404/93 as regards the tariff quota arrangements for imports of bananas into the Community and amending Regulation (EEC) N o 1442/93 (OJ 1995 L 49, p. 13) and on the direct effect of the provisions of the General Agree- ment on Tariffs and Trade (hereinafter 'GATT').

'Any importation of bananas into the Community shall be subject to the submis- sion of an import licence issued by the Member States at the request of any party concerned, irrespective of his place of establishment within the Community, with- out prejudice to the special provisions made for the implementation of Articles 18 and 19.'

5 Article 18(1), as originally worded, provided that a tariff quota of 2 000 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.

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T. PORT v HAUPTZOLLAMT HAMBURG-JONAS

6 Article 19(1) subdivides the tariff quota opened as follows: 66.5% to the category of operators who previously marketed third-country and/or non-traditional A C P bananas, 30% to the category of operators who marketed Community and/or tra- ditional ACP bananas and 3.5% to the category of operators established in the Community who started marketing bananas other than Community and/or tradi- tional A C P bananas from 1992.

7 Article 19(2) provides that each operator is to obtain import licences on the basis of the average quantities of bananas that he has sold in the three most recent years for which figures are available.

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

1 3 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, known as the Framework Agreement on Bananas (hereinafter 'the Framework Agreement').

1 4 The Framework Agreement comprises two documents: the first, entitled 'Agreed outcome of the negotiations between Colombia, Costa Rica, Nicaragua, Venezuela and the European Community on the EC's import regime for bananas', constitutes a sort of preamble to the agreement itself; the second document, entitled 'Frame- work Agreement on Bananas', contains the technical provisions of the arrangement with the Latin American countries.

15 The first document states:

'The attached draft agreement on bananas represents a satisfactory outcome of the negotiations on bananas in the context of the Uruguay Round.

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18 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.

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JUDGMENT OF 10. 3. 1998 —JOINED CASES C-364/95 AND C-365/95

19 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:

'the supplying countries with country quotas may deliver special export certificates for up to 70% of their quota, which, in turn, constitute a prerequisite for the issu- ance, by the Community, of certificates for the importation of bananas from said countries by "Category A " and "Category C operators.

The authorisation to deliver the special export certificates shall be granted by the Commission in order to make it possible to improve regular and stable trade rela- tions between producers and importers and on the condition that the export cer- tificates will be issued without any discrimination among the operators.'

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.'

23 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.

24 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.

25 By judgment of 5 October 1994 in Case C-280/93 Germany v Council [1994] E C R I-4973, the Court dismissed the action brought by the Federal Republic of Ger- many for the annulment of Regulation N o 404/93.

26 O n 21 December 1994 the Commission adopted Regulation (EC) N o 3224/94 lay- ing down transitional measures for the implementation of the Framework Agree- ment on Bananas concluded as part of the Uruguay Round of multilateral trade negotiations (OJ 1994 L 337, p . 72).

27 O n 22 December 1994 the Council unanimously adopted Decision 94/800/EC concerning the conclusion on behalf of the European Community, as regards mat- ters within its competence, of the agreements reached in the Uruguay Round mul- tilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1).

32 Article 1(1) of Regulation N o 478/95 provides:

'The tariff quota for imports of bananas from third countries and non-traditional A C P bananas referred to in Articles 18 and 19 of Regulation (EEC) N o 404/93 shall be divided into specific shares allocated to the countries or groups of coun- tries referred to in Annex I ...'

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T. PORT v HAUPTZOLLAMT HAMBURG-JONAS

33 Annex I contains three tables: the first gives the percentages of the tariff quota allocated to the Latin American States in the Framework Agreement; the second subdivides the quota of 90 000 tonnes of non-traditional bananas; and the third provides that all the other third countries are to receive 50.6% of the total quota.

34 According to Article 3(2) of Regulation N o 478/95:

per tonne for the second half of 1993 and for 1994, and E C U 75 per tonne for 1995, on the basis of quantities sold during the reference years 1989, 1990 and 1991.

37 In 1994 T. Port, pleading that it was suffering hardship, requested additional licences from the Bundesanstalt.

38 In the course of that procedure, the Hessischer Verwaltungsgerichtshof (Higher Administrative Court, Hesse), by order of 9 February 1995, instructed the Bunde- sanstalt to issue to T. Port further import licences for 1995 and referred questions to the Court of Justice for a preliminary ruling concerning the rules governing cases of hardship (judgment of 26 November 1996, Case C-68/95 T. Port v Bunde- sanstalt für Landwirtschaft und Ernährung [1996] ECR I-6065).

39 After using those licences, T. Port asked the Hauptzollamt Hamburg-Jonas, in March 1995, to grant customs clearance for a consignment of bananas from Ecua- dor without requiring it either to produce import licences or pay the customs duty due.

4 0 T. Port instituted proceedings before the Bundesverfassungsgericht (Federal Con- stitutional Court) against the negative decision of the Hauptzollamt Hamburg- Jonas, which had been confirmed by decision of the Federal Ministry of Finance, and against Regulation N o 478/95.

41 By order of 26 April 1995 the Bundesverfassungsgericht declined to give judgment in those proceedings on the ground that T. Port was required first to make an application for an interim order safeguarding its rights. The Bundesverfassungsger- icht stated that it was not impossible that the court hearing the application for interim relief might, in view of the inconsistency between Regulation N o 404/93 and the obligations incumbent on the Federal Republic of Germany under GATT, decide not to apply that regulation for the time being. It also pointed out the

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45 On 8, 21 and 28 June 1995, the Finanzgericht Hamburg made three further orders relating to further consignments of bananas imported by T. Port from Ecuador.

46 By judgment of 22 August 1995 the Bundesfinanzhof annulled the four orders of the Finanzgericht Hamburg on the ground that no final decision had been taken in the main proceedings 'when the bananas were released into free circulation.

47 T. Port appealed against that judgment to the Bundesverfassungsgericht.

48 Pursuant to Article 82a(1)(b) of the Rules of Procedure of the Court, the President of the Court, by decision of 8 September 1995, stayed the proceedings in Case C-182/95 T. Port v Hauptzollamt Hamburg-Jonas pending delivery of the Bundes- verfassungsgericht's judgment.

53 The national court also states that the right of the courts of appropriate jurisdic- tion, recognised by the Bundesverfassungsgericht in the abovementioned order of 26 April 1995, to give an interim decision on the conflict between the application of Regulation N o 404/93 and the obligations incumbent on the Federal Republic of Germany under GATT necessarily implies that a person subject to Community law may rely on certain GATT provisions in legal proceedings. It therefore con- sidered that the question of the direct effect of the provisions of GATT should once again be referred to the Court of Justice, even though, in earlier decisions, in particular in Germany v Council, cited above, the Court of Justice had found that the GATT rules do not display the unconditional nature which is an essential pre- condition for them to be recognised as rules of international law that are immedi- ately applicable in the domestic law of the contracting parties.

54 Finally, the national court entertains doubts as to the compatibility of Regulation N o 478/95 with the general principle of non-discrimination, as stated in particular in the second subparagraph of Article 40(3) of the EC Treaty.

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55 Consequently, the Finanzgericht Hamburg considered that the final decision to be given in each of the cases before it called for an answer to the first three questions which it had already submitted to the Court in Case C-182/95 T. Port v Hauptzol- lamt Hamburg-Jonas. It therefore decided to stay proceedings pending a prelimi- nary ruling from the Court, in both cases, on the following questions:

T. PORT v HAUPTZOLLAMT HAMBURG-JONAS

57 In view of the considerations set out in the national court's orders for reference, it is appropriate to examine together the first question and the second part of the second question, which both concern the interpretation of the first paragraph of Article 234 of the Treaty, in relation to various GATT provisions. It is then appro- priate to consider the third question, which depends on an affirmative answer to the first question and the second part of the second question, and relates to the direct effect of GATT provisions. The first part of the second question, which relates to the validity of Regulation N o 478/95, should be examined last.

The interpretation of the first paragraph of Article 234 of the Treaty

58 By its first question and the second part of its second question, the national court wishes essentially to ascertain whether the first paragraph of Article 234 of the Treaty must be interpreted as allowing disapplication of Articles 17, 18 and 19 of Regulation N o 404/93 and of Regulation N o 478/95 on the ground that those measures are contrary to Articles I, II, III and XIII of GATT.

59 Under the first paragraph of Article 234 of the Treaty, the rights and obligations arising from agreements concluded before the entry into force of the Treaty between one or more Member States on the one hand, and one or more third countries on the other, is not to be affected by the provisions of the Treaty.

60 According to settled case-law (see in particular Case C-124/95 The Queen v HM Treasury and Bank of England ex parte Centro-Com [1997] E C R I-81, paragraphs 56 and 57), the purpose of that provision is to make clear, in accordance with the principles of international law, that application of the Treaty does not affect the commitment of the Member State concerned to respect the rights of third coun- tries under an earlier agreement and to comply with its corresponding obligations. Consequently, in order to determine whether a Community rule may be deprived

64 It follows that neither GATT 1947, concluded before the entry into force of the Treaty, nor GATT 1994 can be effectively relied on, in circumstances such as those of the present cases, to preclude the application, under the first paragraph of Article 234 of the Treaty, of provisions of Regulations N o s 404/93 and 478/95.

65 The answer to the first question and the second part of the second question must therefore be that the first paragraph of Article 234 of the Treaty must be inter- preted as not applying to cases involving imports of bananas from a third country which is not a party to an international agreement concluded by Member States before the entry into force of the Treaty.

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T. PORT v HAUPTZOLLAMT HAMBURG-JONAS

The direct effect of the provisions of GATT

66 T h e t h i r d q u e s t i o n , c o n c e r n i n g t h e direct effect of t h e p r o v i s i o n s of G A T T , w a s s u b m i t t e d o n l y in case the first q u e s t i o n a n d t h e s e c o n d p a r t of the second q u e s - t i o n w e r e a n s w e r e d in t h e affirmative.

JUDGMENT OF 10. 3. 1998 —JOINED CASES C-364/95 AND C-365/95

71 T. Port and the German Government submit that the allocation of country quotas to certain third countries, under Article 1(1) of Regulation N o 478/95, limits the import opportunities of economic operators who traditionally import bananas from other third countries. They also consider that, in the case of imports from the third countries to which country quotas have been allocated, Regulation N o 478/95 discriminates against Category A and C operators, as compared with Cat- egory B operators, in that, by virtue of Article 3(2), only the former are required to obtain export licences from the competent authorities in the third countries concerned in order to import bananas from those countries.

72 The French Government submits that the Community is not required to accord equal treatment to the various third countries and that a difference of treatment between economic operators must be accepted if it is the consequence of differ- ences in the treatment accorded to those countries. It also observes, as does the Commission, that the country quotas allocated to the third countries party to the Framework Agreement essentially reflect the average quantities previously imported from those same countries.

73 At the hearing, the Spanish and French Governments, the Council and the Com- mission also stated that the difference in treatment arising from the exemption of Category B operators from the obligation to obtain export licences was objectively justified by the need to restore, between them and Category A and C operators, the competitive balance which Regulation N o 404/93 was designed to establish. They state in that connection that, in Germany v Council, cited above, the Court recognised the legality of certain advantages afforded to Category B operators because of the need to achieve such a balance. However, the increase in the tariff quota and the lowering of the customs duty provided for in the Framework Agreement and incorporated into Regulation N o 404/93 by Regulation N o 3290/94 had the effect of disturbing that balance to the detriment of Category B operators.

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78 As to the exemption of Category B operators from the export-licence system, that difference in treatment is not the automatic consequence of any difference of treat- ment of some third countries as compared with others.

79 That difference in treatment derives not from the fact that the export-licence sys- tem, as provided for in the Framework Agreement and implemented by Regu- lation N o 478/95, is applicable to imports from certain third countries, whether or not they are parties to the Framework Agreement, but from the fact that, among the Community operators who have entered into commercial relations with third countries imports from which are subject to the export-licence system, some are under an obligation to obtain export licences whilst others are exempt from that requirement.

80 It constitutes, moreover, a clear difference in the treatment of Category A and C operators as compared with Category B operators, since, as asserted by the Ger- man Government, which has not been contradicted on that point, application of the export-licence system to Category A and C operators means that they have to pay a price for bananas from the third countries concerned which is some 3 3 % higher than that paid by Category B operators.

81 It is therefore necessary to consider whether that difference of 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 Ruckdescbel 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] ECR 1795, paragraph 16, Case 125/77 Koninklijke Scholten-Honig v Hoofd- produktschap voor Akkerbouwprodukten [1978] ECR 1991, paragraph 26, and

84 Accordingly, where the balance thus achieved by Regulation N o 404/93 has been disturbed because one or more of the parameters on which it is based — such as, for example, the level of the tariff quota or that of the customs duties on imports — have been changed, albeit for reasons unconnected with the common organisa- tion of the market in the bananas sector, it may prove necessary to restore that

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balance. The question remains, however, whether in this case it was proper to do so, to the detriment of Category A and C operators, by means of a measure such as the exemption of Category B operators from the export-licence system, as pro- vided for in Article 3(2) of Regulation N o 478/95.

85 The system for the allocation of the tariff quota, as established by Regulation N o 404/93, which reserves 30% of it to Category B operators, is also applicable to the increase of that quota agreed upon in the Framework Agreement.

86 Category B operators therefore benefit, in the same way as Category A and C operators, from the quota increase and the concomitant lowering of customs duties which, according to the Spanish and French Governments, the Council and the Commission, are the cause of the disturbance of the balance between the vari- ous categories of operator concerned. In addition, the restrictions and differences in treatment to which Category A and C operators are subject as a result of the banana import regime set up by Regulation N o 404/93 also apply to the part of the quota corresponding to that increase.

90 The costs incurred by the German, Spanish, French and United Kingdom Govern- ments, by the Council of the European Union and by the Commission of the European Communities, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a mat- ter for that court.

O n those grounds,

T H E COURT,

in answer to the questions referred to it by the Finanzgericht Hamburg by orders of 22 and 27 September 1995, hereby rules:

1. The first paragraph of Article 234 of the EC Treaty must be interpreted as not applying to cases involving imports of bananas from a third country which is not a party to an international agreement concluded by Member States before the entry into force of the Treaty.

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R. Grass G. C. Rodriguez Iglesias

Registrar President

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