Court of Justice of the European Communities (including Court of First Instance Decisions)

'1 Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas (OJ 1993 L 47, p. 1) replaced the various previous national arrangements with a common trading system with third countries. In the version in force at the material time, the regulation provided for the opening of an annual tariff quota for banana imports from third countries and from the African, Caribbean and Pacific (ACP) countries. Article 15, which became Article 15a when the regulation was amended by Council Regulation (EC) No 3290/94 of 22 December 1994 on the adjustments and transitional arrangements required in the agriculture sector in order to implement the agreements concluded during the Uruguay Round of multilateral trade negotiations (OJ 1994 L 349, p. 105), established a distinction between traditional and non-traditional bananas depending on whether they formed part of the quantities, set out in the Annex to Regulation No 404/93, traditionally exported by the ACP States to the Community. For Somalia, the traditional quantity was 60 000 tonnes.

2 Article 18(1) of Regulation No 404/93 (as amended by Regulation No 3290/94) provided that a tariff quota of 2.1 million tonnes (net weight) would be opened for 1994 and 2.2 million tonnes (net weight) for each subsequent year for imports of third country bananas and non-traditional ACP bananas. Within the framework of the tariff quota, imports of third country bananas were subject to a levy of ECU 75 per tonne and imports of non-traditional ACP bananas to a zero duty. Moreover, the second indent of Article 18(2) provided that imports outside the tariff quota, whether of non-traditional ACP bananas or of third country bananas, were subject to a levy calculated on the basis of the Common Customs Tariff.

3 Article 19(1) of Regulation No 404/93 divided the tariff quota thus opened, allocating 66.5% to the category of operators who had marketed third country and/or non-traditional ACP bananas (category A), 30% to the category of operators who had marketed Community and/or traditional ACP bananas (category B), and 3.5% to the category of operators established in the Community who had started marketing bananas other than Community and/or traditional ACP bananas from 1992 (category C).

4 According to the second subparagraph of Article 19(2) of Regulation No 404/93, for the second half of 1993 each operator was to be issued licences on the basis of half of the annual average quantity marketed between 1989 and 1991.

5 Article 19(4) of Regulation No 404/93 provided that if the tariff quota was increased the additional available quantity would be allocated to importers in the categories referred to in Article 19(1).

6 Under Article 16(1) and (3) of Regulation No 404/93 a forecast supply balance was to be prepared each year of production and consumption in the Community and of imports and exports. Where necessary, in particular to take account of the effects of exceptional circumstances affecting production or import conditions, the balance could be adjusted during the marketing year. In such a case, the tariff quota provided for in Article 18 was to be adjusted in accordance with the procedure laid down in Article 27.

7 The fourth subparagraph of Article 18(1) of Regulation No 404/93 provided for a possible increase in the volume of the annual quota on the basis of the supply balance referred to in Article 16, and it referred to Article 27 of the regulation for the procedure governing any such increase.

8 Article 20 of the regulation gave the Commission the power to adopt and adjust the forecast supply balance referred to in Article 16 and to adopt detailed rules for the trading system with third countries, which might cover in particular additional measures concerning the issue of licences, their term of validity and the conditions governing transferability.

9 Article 30 of Regulation No 404/93 provided that:

If specific measures are required after July 1993 to assist the transition from arrangements existing before the entry into force of this Regulation to those laid down by this Regulation, and in particular to overcome difficulties of a sensitive nature, the Commission, acting in accordance with the procedure laid down in Article 27, shall take any transitional measures it judges necessary.

10 Article 27 of the same regulation, which is referred to in Articles 16, 18 and 30 in particular, authorised the Commission to adopt measures for theimplementation of the regulation in accordance with the management committee procedure.

11 At the material time, the detailed rules governing the system for importing bananas into the Community were laid down in Commission Regulation (EEC) No 1442/93 of 10 June 1993 (OJ 1993 L 142, p. 6). Articles 4 and 5 of that regulation provided that the division of the tariff quota between category A operators (66.5%) was to be based on the quantity of third country or non-traditional ACP bananas marketed during the three years prior to the year preceding the year for which the tariff quota was opened. The division of the quota between category B operators (30%) was to be based on the quantities of Community or traditional ACP bananas marketed during a reference period calculated in the same way as for category A.

12 In accordance with the provisions of the second subparagraph of Article 19(2) of Regulation No 404/93 and Articles 4 and 5 of Regulation No 1442/93, the reference period was moved forward annually by one year. Therefore, if the reference period for 1993 imports covered the years 1989, 1990 and 1991, then for 1997 imports it covered the years 1993, 1994 and 1995.

...

15 Between 1994 and 1996, following tropical storms Debbie, Iris, Luis and Marilyn which had damaged the banana plantations in Martinique, Guadeloupe, St Vincent and the Grenadines, St Lucia and Dominica, the Commission adopted a number of regulations (Commission Regulations (EC) Nos 2791/94 of 16 November 1994, 510/95 of 7 March 1995, and 1163/95 of 23 May 1995 on the exceptional allocation of a quantity additional to the tariff quota for imports of bananas in 1994, the first quarter of 1995 and the second quarter of 1995 respectively, as a result of tropical storm Debbie (OJ 1994 L 296, p. 33; OJ 1995 L 51, p. 8; and OJ 1995 L 117, p. 12); Commission Regulations (EC) Nos 2358/95 of 6 October 1995, 127/96 of 25 January 1996 and 822/96 of 3 May 1996 on the exceptional allocation of a quantity additional to the tariff quota for imports of bananas for the fourth quarter of 1995, the first quarter of 1996 and the second quarter of 1996 respectively, as a result of tropical storms Iris, Luis and Marilyn (OJ 1995 L 241, p. 5; OJ 1996 L 20, p. 17; and OJ 1996 L 111, p. 7)). The regulations increased the tariff quota and introduced specific rules for the distribution of the additional quantity among operators including or directly representing the banana producers affected by the storm damage. Those distribution rules derogated from the rules set out in Article 19(4) of Regulation No 404/93.

16 The Commission adopted the above regulations on the basis of Articles 16(3), 20 and 30 of Regulation No 404/93.

17 The reasons given for adopting the regulations were that the tropical storms had caused enormous damage to the banana plantations in the Community regions of Martinique and Guadeloupe and in the ACP States of Saint Vincent and the Grenadines, St Lucia and Dominica, that the impact of those exceptional circumstances on production in the regions hit would continue to be felt for several months and considerably affect imports and supplies to the Community market, and that there was a risk that this would result in a steep increase in market prices in some regions of the Community.

18 As to the system for increasing the tariff quota provided for in Article 16(3) of Regulation No 404/93, the Commission stated in the fourth recital to the regulations:

Whereas the adaptation of the tariff quota must permit adequate supplies to the Community market ... and provide compensation to operators who include or directly represent banana producers who suffered damage and who, in addition, in the absence of appropriate measures, risk losing their traditional outlets on the Community market on a long-term basis.

19 In the fifth recital the Commission stated:

... Whereas the measures to be taken should have a specific transitional nature, within the meaning of Article 30 of Regulation ... No 404/93; whereas, prior to the entry into force of the new common market organisation on 1 July 1993, existing national market organisations, in order to cope with urgent cases or exceptional circumstances [such as the tropical storms referred to above], included provisions ensuring supplies to the market from other suppliers while safeguarding the interests of operators who are victims of such exceptional events.'

The facts

'20 The applicant, Camar Srl, was set up in 1983 by the Italian investment group De Nadai in order to import Somalian bananas into Italy. Until 1994 it was the sole importer and until 1997 the main importer of that type of banana.

21 Between 1984 and 1990 banana production reached its peak in Somalia, attaining an annual production of 90 000 to 100 000 tonnes. Part of that production was imported into Europe (51 921 tonnes in 1988, 59 388 tonnes in 1989 and 57 785 tonnes in 1990) and, in particular, into Italy by Camar (45 130 tonnes in 1990).

22 On 31 December 1990 civil war broke out in Somalia and the normal flow of Camar's imports was interrupted.

23 From the outbreak of war until the common organisation of the market came into force in 1993 Camar supplied the Italian market by obtaining supplies from two ACP countries, Cameroon and the Windward Islands, and from certain third countries from which it had already been importing bananas since 1988.

24 From the introduction of the common organisation of the market in July 1993 to the end of 1997 Camar was issued with Category A import licences (for 4 008.521 tonnes in 1993, 8 048.691 tonnes in 1994, 3 423.761 tonnes in 1995 and 5 312.671 tonnes in 1996) and also with Category B licences (for 5 622.938 tonnes in 1993, 10 739.088 tonnes in 1994, 6 075.934 tonnes in 1995 and 2 948.596 tonnes in 1996). In 1997 Camar was issued with import licences for a quantity of 7 545.723 tonnes for Category A and 2 140.718 tonnes for Category B.

25 During that period the quantities of bananas imported from Somalia by the applicant amounted to approximately 482 tonnes in 1993, 1 321 tonnes in 1994, 14 140 tonnes in 1995 and 15 780 tonnes in 1996. In 1997 banana production in Somalia was expected to be around 60 000 tonnes, but following climatic problems and in the absence of any suitably equipped port other than Mogadishu, exports from Somalia were limited to 21 599 tonnes, 12 000 of which were marketed by Camar.

...

27 Since the common organisation of the market came into force Camar has repeatedly requested the Commission to increase its third country banana quota by an amount equal to the difference between the traditional quantity of Somalian bananas provided for by Regulation No 404/93 (60 000 tonnes) and the quantities which Camar actually imported or could have imported into the Community, and to issue it with licences corresponding to the difference between those quantities. The applicant cited as precedents here the measures which the Commission had adopted after cyclones Debbie, Iris, Luis and Marilyn.'

The actions before the Court of First Instance

Case T-79/96

Case T-260/97

Case T-117/98

The contested judgment

The operative part

'1. In Case T-79/96, declares that, by failing to take the necessary measures provided for in Article 30 of Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas with respect to the applicant, the Commission has failed to fulfil its obligations under that article;

2. In Case T-260/97, annuls the Commission's decision of 17 July 1997 rejecting the application which the applicant submitted on the basis of Article 30 of Regulation No 404/93;

3. In Case T-117/98, annuls the Commission's decision of 23 April 1998 rejecting the application which the applicants submitted on the basis of Article 16(3) of Regulation No 404/93;

4. In Cases T-79/96 and T-117/98, dismisses the action for compensation as inadmissible;

5. In Case T-260/97, orders the Commission to pay compensation for the damage suffered by the applicant as a result of the decision of 17 July 1997 rejecting the application submitted by the applicant on the basis of Article 30 of Regulation No 404/93;

Orders the parties to inform the Court, within six months of the date on which this judgment is delivered, of the sums to be paid, determined by common accord;

Orders that, in the event of failure to reach agreement, they shall submit their quantified claims to the Court within that period;

6. Orders the Commission to pay the costs in Cases T-79/96 and T-117/98;

7. Orders the Commission to pay 90% of the costs in Case T-260/97;

8. Orders the Council to pay 10% of the costs in Case T-260/97;

9. Orders the Italian Republic and the French Republic to bear their own costs.'

'1. The Commission is ordered to bear its own costs, as well as those incurred by Camar in Case T-79/96 R.

2. The Commission is ordered to bear its own costs in Case T-260/97 R and 90% of those incurred by Camar in the same case.

3. The Council shall bear its own costs in Case T-260/97 R.

4. Camar shall bear 10% of the costs it incurred in Case T-260/97 R.

5. The Italian Republic and the French Republic shall bear their own costs in Case T-79/96 R.

6. The French Republic shall bear its own costs in Case T-260/97 R.'

The grounds of judgment in Cases T-79/96 and T-260/97

'As for the supply problems pleaded by the applicant, it should be pointed out first of all that, as regards the possibility of interchanging sources of banana supplies, the Italian arrangements before Regulation No 404/93 came into force were considerably more flexible than the Community system. As the applicant stresses, without being disproved by the Commission, the Italian arrangements allowed unlimited quantities of ACP bananas to be imported free of customs duties. Furthermore, as regards the import of third country bananas, even though the Italian arrangements provided for a quota, operators could obtain such a quota without reference to the quantities and origin of the bananas they had imported in previous years. The common organisation of the market in bananas, on the other hand, which was established by Regulation No 404/93, provides that ACP bananas may enter the Community market free of customs duties only until the traditional quantities or the tariff quota have been used up, and that each operator may obtain import licences only according to the origin of the bananas (Community, traditional ACP countries, third countries and non-traditional ACP countries) and on the basis of the average quantities imported over a reference period. Clearly, the introduction of the common organisation of the market limited the scope for imports which existed under Italian legislation prior to Regulation No 404/93.'

'... even if the applicant's difficulties in obtaining supplies of bananas were associated with the civil war which occurred in Somalia at the end of 1990, they are a directconsequence of the introduction of the common organisation of the market because the system in fact significantly reduced the scope provided under the previous Italian arrangements for Camar to replace the shortfall in Somalian bananas. Those difficulties thus had very serious consequences for the viability of Camar's economic activity and could have endangered the continuation of that activity. They therefore constituted difficulties of a sensitive nature which, for the purposes of Article 30 of Regulation No 404/93 as explained in paragraph 38 of the judgment in T. Port, give rise to an obligation on the Commission to take any measures it judges necessary.'

'150 This conclusion is not invalidated by the Commission's argument that Article 30 of Regulation No 404/93, as interpreted by the Court of Justice in its judgment in T. Port, requires the Commission to take action only where banana importers encounter difficulties which are not just inherent in the transition from the national arrangements to the Community system, but which also threaten their existence.

151 It should also be pointed out that in paragraph 43 of the judgment in T. Port the Court of Justice stated that Article 30 may require the Commission to lay down rules catering for cases of hardship arising from the fact that importers of third-country bananas or non-traditional ACP bananas meet difficulties threatening their existence. However, this statement cannot be understood to mean that the Commission is under an obligation to take action only in such cases. Such an interpretation would conflict with the wording of Article 30, which, as has already been stressed, provides that the Commission must take any measures necessary to overcome difficulties of a sensitive nature, and it would be incompatible with the principles of sound administration and protection for the right to pursue a professional or trade activity. Furthermore, the reference to the threat to the operator's existence followed from the specific wording of the question referred for a preliminary ruling (see judgment in T. Port, paragraph 23).'

The grounds of judgment in Case T-117/98

'... that regulation, in whose implementation the national authorities would have had no discretionary power, would have affected the applicants by reason of circumstances in which they are differentiated from all other persons. The purpose of the measures sought from the Commission was to allocate an additional quantity of import licences to those operators who had been victims of the floods in Somalia, in proportion to thedamage they had suffered. It is apparent from the documents before the Court that until 1997 Camar was the main importer of Somalian bananas, and that from the fourth quarter of 1997 Tico temporarily took over that position. The reduction in the quantities of Somalian bananas available during the fourth quarter of 1997 and the first quarter of 1998 thus particularly affected the applicants, who would consequently have been the main ones to benefit from the increase in the tariff quota. Accordingly, the Commission's refusal to adjust the tariff quota clearly did not affect the applicants in the same way as any other importer of Somalian bananas, but affected them by reason of circumstances in which they were differentiated from all other operators trading on the same market.'

'167 ... it should be pointed out, first of all, that the applicants do not need to prove that there was an actual shortfall in supplies to the Community market, they simply need to demonstrate that there was a risk of such a shortfall. The applicants' claim, not disproved by the Commission, that there was a significant drop in imports of Somalian bananas during the last quarter of 1997 and the first half of 1998 supports their contention that there was such a risk to the Italian market overall, and therefore to a substantial section of the Community market. The Commission did not provide any information to refute that claim when, in reply to a written question from the Court of First Instance, it explained that supplies to the Community market in 1997 could be regarded as adequate given that, faced with a 94 000 tonne reduction in imports of traditional ACP bananas (including 3 522 tonnes from Somalia) and an increase in Community demand of 86 000 tonnes, Community production hadincreased by some 126 000 tonnes and imports from third countries by some 64 000 tonnes compared with 1996.

168 First, as regards the increase in the production of Community bananas in 1997, the Commission has not explained how that increase could compensate for reductions in Somalian imports in 1998. Second, as regards the increase in imports from third countries in 1997 compared with 1996, it is clear from the figures supplied by the Commission itself that the imports in 1997 did not use up the tariff quota fixed in the forecast supply balance; it therefore cannot be claimed that there was an increase, compared with the forecast, which was capable of supplementing any shortfall in supply.

169 Furthermore, if, as the Commission's reply appears to suggest, the Commission actually based its assessment of the risk of a shortfall in supplies to the market in 1998 on the 1997 production figures for Community bananas, it would have committed an error of law in the application of Article 16 of Regulation No 404/93. As the Court of Justice explained in its judgment in T. Port (paragraph 31), if an increase in the production of Community bananas is to be taken into account in order to compensate for a reduction in imports of traditional ACP bananas which has occurred during a particular year, it must be an increase compared with the forecast supply balance for the same year rather than with production in the previous year.

170 Finally, the fact that, as the Commission accepted at the hearing, it receives figures relating to the situation of the banana market every week makes it difficult to understand why it has never, at any stage in the proceedings, provided figures for supplies to the Community market in 1998 in response to the applicants' claims. In those circumstances, by using only figures for 1997, the Commission gave further weight to the evidence provided by the applicants concerning the market situation in 1998.

171 It is clear from the above that, in the present case, the second condition for application of Article 16(3) is also satisfied.'

The appeal

- set aside the judgment;

- declare the action in Case T-79/96 unfounded;

- declare the action for annulment and damages in Case T-260/97 unfounded;

- declare inadmissible, alternatively unfounded, the action in Case T-117/98;

- order Camar and Tico to pay the costs of this appeal and the proceedings before the Court of First Instance.

- dismiss the Commission's appeal;

- order the Commission to pay the costs.

- reverse the contested judgment;

- order Camar and Tico to pay the Council's costs relating to the proceedings at first instance, the interlocutory proceedings and this appeal.

- set aside the contested judgment;

- as a result, declare the actions in Cases T-79/96 and T-260/97 unfounded;

- order Camar and Tico to pay the costs.

- dismiss the Commission's appeal;

- order the Commission to pay the costs.

Conditions of application of Article 30 of Regulation No 404/93 (Cases T-79/96 and T-260/97)

Arguments of the parties

Findings of the Court

Conditions of admissibility of an action for annulment of a refusal to adopt a measure of general application (Case T-117/98)

Arguments of the parties

Findings of the Court

Costs