CELEX: 62009CJ0160
Regulation (EEC) No 1591/84
Cooperation Agreement between the European Economic Community, of the one part, and the Cartagena Agreement and the member countries thereof, Bolivia, Colombia, Ecuador, Peru and Venezuela, of the other part
Most-favoured-nation clause
Direct effect
Excise duty on the import of bananas into Greece

This reference for a preliminary ruling concerns the interpretation of the most-favoured-nation clause in Article 4 of the
Cooperation Agreement concluded between the European Economic Community, of the one part, and the Cartagena Agreement and
the member countries thereof – Bolivia, Colombia, Ecuador, Peru and Venezuela – of the other part (‘the Cooperation Agreement’),
approved by Council Regulation (EEC) No 1591/84 of 4 June 1984 (OJ 1984 L 153, p. 1).
The reference was made in proceedings between Ioannis Katsivardas – Nikolaos Tsitsikas OE (‘Katsivardas’), a partnership governed
by Greek law, and the Ipourgos Ikonomikon (Minister for Finance) concerning the refund of a sum which Katsivardas paid, following
the customs clearance of a consignment of bananas imported from Ecuador in 1993, in respect of the excise duty on bananas
which was prescribed at the time by Greek law.

Legal context

International agreements
General Agreement on Tariffs and Trade
The General Agreement on Tariffs and Trade of 1994 (‘the 1994 GATT’), which is included in Annex 1A to the Agreement establishing
the World Trade Organisation, was approved by 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). The 1994 GATT states, in Article 1(a), that it includes the provisions
in the General Agreement on Tariffs and Trade of 1947 (‘the 1947 GATT’), as rectified, amended or modified by the terms of
legal instruments which entered into force before the date of entry into force of the Agreement establishing the World Trade
Organisation.
The provisions of the 1947 GATT adopted by the 1994 GATT include the most-favoured-nation clause in Article I(1), which is
worded as follows:
‘With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed
on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and
charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to
all matters referred to in paragraphs 2 and 4 of Article III, any advantage, favour, privilege or immunity granted by any
contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally
to the like product originating in or destined for the territories of all other contracting parties.’
Article III(2) of the 1947 GATT relates to internal taxes or other internal charges, whilst Article III(4) refers to the laws,
regulations and requirements affecting the sale, offering for sale, purchase, transportation, distribution or use of products.
Cooperation Agreement
Article 1 of the Cooperation Agreement, the text of which forms an integral part of Regulation No 1591/84 by which that agreement
was approved, provides that, ‘in the light of their mutual interests and in accordance with their long-term economic objectives,
the Contracting Parties undertake to foster, within the limits of their competence, the broadest possible economic cooperation
from which no field shall be excluded in advance, taking into account their different levels of development’. Article 1 adds
that the objective of such cooperation is ‘to contribute generally to the development of the Parties’ respective economies
and to raising their standards of living’.
Article 4 of the Cooperation Agreement provides:
‘
Most-favoured-nation treatment
1.       The Contracting Parties shall, with regard to imported or exported goods, grant each other most-favoured-nation treatment
in all matters relating to:
–        customs duties and charges of all kinds, including the procedures for collecting such duties and charges,
–        regulations concerning customs clearance, transit, warehousing or transhipment,
–        direct or indirect taxes and other internal charges,
–        regulations concerning payments, including the allocation of foreign currency and the transfer of such payments,
–        regulations affecting the sale, purchase, transport, distribution and use of goods on the internal market.
2.       Paragraph 1 shall not apply to:
(a)       advantages granted to neighbouring countries to facilitate frontier-zone traffic;
(b)       advantages granted with the object of establishing a customs union or a free trade area or as required by such a customs union
or free trade area, including advantages accorded in the context of a regional economic integration area in Latin America;
(c)       advantages granted to particular countries in conformity with the [1947 GATT];
(d)       advantages which the member countries of the Cartagena Agreement grant to certain countries in accordance with the Protocol
on trade negotiations among developing countries, in the context of the [1947 GATT].
3.       This Article shall apply without prejudice to the rights and obligations which exist under the [1947 GATT].’
Article 5 of the Cooperation Agreement, relating to the Joint Cooperation Committee, provides in paragraph 2 that that committee
is inter alia to recommend solutions to differences which may arise between the parties regarding the interpretation and execution
of the Cooperation Agreement.
Annex II to the Cooperation Agreement, headed ‘Declaration on commercial cooperation’, is worded as follows:
‘Under the commercial cooperation provided for in this Agreement, the Parties declare that they are prepared to examine, within
the Joint Committee and in the context of their respective economic policies, any specific problems which may arise in the
sphere of trade.’
Framework Agreement on Cooperation
The framework agreement on cooperation between the European Economic Community and the Cartagena Agreement and its member
countries, namely the Republic of Bolivia, the Republic of Colombia, the Republic of Ecuador, the Republic of Peru and the
Republic of Venezuela (‘the Framework Agreement on Cooperation’), was approved on behalf of the Community by Council Decision
98/278/EC of 7 April 1998 (OJ 1998 L 127, p. 10).
Under Article 2 of the Framework Agreement on Cooperation, the contracting parties undertake to impart renewed vigour to relations
between them, reinforcing the development of their cooperation by its extension to new fields.
Article 4 of the Framework Agreement on Cooperation provides:
‘The Contracting Parties hereby grant each other most-favoured-nation treatment in trade, in accordance with the [1994 GATT].
Both Parties reaffirm their will to conduct trade with each other in accordance with that Agreement.’
Article 33(2) of the Framework Agreement on Cooperation provides that the agreement’s provisions are to replace the provisions
of the previous agreements between the Community and the member countries of the Cartagena Agreement where such provisions
are either incompatible with or identical to the provisions of the Framework Agreement.
Fourth ACP-EEC Convention
The Fourth ACP-EEC Convention, signed at Lomé on 15 December 1989, was approved by Decision 91/400/ECSC, EEC of the Council
and the Commission of 25 February 1991 (OJ 1991 L 229, p. 1). Article 1 of Protocol No 5 on bananas which is annexed to that
Convention is worded as follows:
‘In respect of its banana exports to the Community markets, [none of the African, Caribbean and Pacific States having concluded
the Convention (“the ACP States”)] shall be placed, as regards access to its traditional markets and its advantages on those
markets, in a less favourable situation than in the past or at present.’

National law
Article 7 of Law No 1798/1988, as amended by Law No 1914/1990, provided from 1 July 1988 that an excise duty of GRD 150 per
kilogram was to be charged on bananas imported from abroad and, in certain cases, on bananas produced in Greece. This duty
was subsequently increased and then reduced, before being abolished in 1998.

The dispute in the main proceedings and the question referred for a preliminary ruling
In July 1993, following customs clearance of a consignment of bananas imported directly from Ecuador, Katsivardas was charged
customs duty and other taxes totalling GRD 6 785 565 (EUR 19 913.61), an amount which it paid whilst recording, however, a
reservation concerning the sum of GRD 4 986 100 paid by way of excise duty. Katsivardas subsequently requested the refund
of that sum and the corresponding value added tax, which in its view had been wrongly paid.
Following refusal of a refund by the competent customs authority, Katsivardas brought proceedings before the Diikitiko Protodikio
Athinon (Administrative Court of First Instance, Athens), which upheld its action so far as concerns annulment of the notices
of assessment at issue and the request for a refund. Since that decision was, however, set aside by the appellate court, Katsivardas
brought an appeal on a point of law before the Simvoulio tis Epikratias (Council of State).
The Simvoulio tis Epikratias, unlike the applicant in the main proceedings, takes the view that the excise duty in dispute
must be classified as internal taxation within the meaning of Article 95 of the EEC Treaty (which became Article 95 of the
EC Treaty, which itself became, after amendment, Article 90 EC), and not as a charge having equivalent effect to customs duty
for the purposes of Articles 9 and 12 of the EEC Treaty (which respectively became Articles 9 and 12 of the EC Treaty, which
themselves became, after amendment, Articles 23 EC and 25 EC). According to the referring court, such internal taxation could
lawfully be charged on bananas imported directly from non-member countries if less favourable tax treatment were not precluded
by specific clauses resulting from trade agreements between the Community and those non-member countries, such as Article
4 of the Cooperation Agreement.
The referring court also made reference to the judgment in Case C‑469/93
Chiquita Italia
[1995] ECR I‑4533, according to which Protocol No 5 on bananas annexed to the Fourth ACP-EEC Convention contains a provision
aiming to ensure access of bananas from ACP States to their traditional markets upon conditions no less favourable than those
which existed upon the entry into force, on 1 April 1976, of the similar clause in paragraph 1 of Protocol No 6 on bananas
annexed to the ACP-EEC Lomé Convention signed on 28 February 1975 (‘the standstill clause’).
Consequently, according to the referring court, the grant of most-favoured-nation treatment to the member countries of the
Cartagena Agreement means that bananas originating in those countries are to be equated with bananas coming from the ACP States.
Its ability to determine the legality of an excise duty such as that at issue in the main proceedings thus depends on whether
the Cooperation Agreement, in particular Article 4, confers rights which can be directly relied upon by individuals before
the national courts of the Member States, so that Katsivardas can rely on that article, read in conjunction with the standstill
clause, to contest the excise duty on bananas at issue in the main proceedings.
The referring court stated that the Court of Justice declared in Case C-377/02
Van
Parys
[2005] ECR I‑1465 that such rights do not accrue from the most-favoured-nation clause in the Framework Agreement on Cooperation,
concluded subsequently with the member countries of the Cartagena Agreement, and the advantages resulting from the ACP-EEC
Conventions concern only ‘traditional’ ACP bananas, that is to say bananas originating in the ACP States up to the limit of
the annual quantity imported as at 1 April 1976, so that those advantages do not appear to be capable of being extended to
bananas originating in other countries.
Since the Simvoulio tis Epikratias took the view, on the other hand, that the Court had never ruled on the Cooperation Agreement,
it decided to stay proceedings and to refer the following question to the Court for a preliminary ruling:
‘Can an individual (a trader importing bananas [originating in] Ecuador) who claims the refund of domestic excise duty as
having been wrongly paid plead before the national court that the national tax rule (Article 7 of Law No 1798/1988, as amended
by Article 10 of Law No 1914/1990) is incompatible with Article 4 of the [Cooperation Agreement]?’

Consideration of the question referred

Admissibility
The Greek Government contests the admissibility of the question referred for a preliminary ruling on the ground that it, first,
concerns not the interpretation of a provision of Community law but the extent to which an individual can plead a contradiction
between national provisions and a Community measure and, second, does not specify which provision requires interpretation.
It is to be recalled that, although the Court has no jurisdiction under Article 234 EC to apply a rule of Community law to
a particular case and thus to judge a provision of national law by reference to such a rule, it may none the less, within
the framework of the judicial cooperation provided for by that article and on the basis of the material presented to it, provide
the national court with an interpretation of Community law which may be useful to it in assessing the effects of that provision
(Case C-6/01
Anomar and Others
[2003] ECR I-8621, paragraph 37 and the case-law cited).
The question referred for a preliminary ruling in the present proceedings, which relates to whether an individual can plead
before a national court the most-favoured-nation clause in Article 4 of the Cooperation Agreement in order to oppose the application
of a national fiscal provision, concerns the ability of that clause to give rise to direct effect for an individual and, therefore,
its interpretation.
That clause is set out in the Cooperation Agreement, which was approved on behalf of the Community by Regulation No 1591/84
and thus constitutes, in light of settled case-law, an act of the Community institutions which the Court has jurisdiction
to interpret in preliminary ruling proceedings (see, to this effect, Case 181/73
Haegeman
[1974] ECR 449, paragraphs 4 to 6; Case C-162/96
Racke
[1998] ECR I‑3655, paragraph 41; and Case C-301/08
Bogiatzi
[2009] ECR I‑0000, paragraph 23).
It is also settled case-law that questions on the interpretation of Community law referred by a national court in the factual
and legislative context which that court is responsible for defining, and the accuracy of which is not a matter for the Court
to verify, enjoy a presumption of relevance. The Court can decline to rule on a reference for a preliminary ruling from a
national court only where it is quite obvious that the interpretation of Community law that is sought bears no relation to
the actual facts of the main action or to its purpose, where the problem is hypothetical, or where the Court does not have
before it the factual or legal material necessary to give a useful answer to the questions submitted to it (Case C-210/06
Cartesio
[2008] ECR I-9641, paragraph 67 and the case-law cited).
Here, the answer to the question, asked by the referring court, whether a person such as Katsivardas may plead Article 4 of
the Cooperation Agreement before the national courts will determine whether the applicant in the main proceedings can effectively
invoke the standstill clause which forms the basis of the line of argument set out by it in those proceedings that the excise
duty on bananas established by the national legislation is unlawful.
Thus, it is not obvious that the interpretation of Community law that is sought would be of no use to the referring court.
It follows that the question referred for a preliminary ruling is admissible.

Substance
By its question, the referring court essentially asks whether Article 4 of the Cooperation Agreement can be relied upon directly
by an individual in a case before the national courts of a Member State.
It should first be noted, as a preliminary point, that in conformity with the principles of public international law the institutions
of the European Union, which have power to negotiate and conclude an agreement with non-member countries, are free to agree
with those countries what effect the provisions of the agreement are to have in the internal legal order of the contracting
parties. Only if that question has not been settled by the agreement does it fall to be decided by the courts having jurisdiction
in the matter, and in particular by the Court of Justice within the framework of its jurisdiction under the FEU Treaty, in
the same manner as any other question of interpretation relating to the application of the agreement in the European Union
(see Case 104/81
Kupferberg
[1982] ECR 3641, paragraph 17; Case C-149/96
Portugal
v
Council
[1999] ECR I‑8395, paragraph 34; and Joined Cases C-120/06 P and C-121/06 P
FIAMM and FIAMM Technologies
v
Council and Commission
[2008] ECR I‑6513, paragraph 108).
It should also be noted that, in accordance with the Court’s settled case-law, examination of the direct effect of provisions
contained in an agreement concluded by the European Union with non-member countries invariably involves an analysis of the
spirit, general scheme and terms of that agreement (see
Chiquita Italia
, paragraph 25 and the case-law cited).
On the other hand, as the European Commission observed at the hearing, the nature of the legal measure approving the international
agreement concerned is not relevant in such an examination. As follows from Case 12/86
Demirel
[1987] ECR 3719, paragraph 25, the fact that an international agreement has been approved by means of a decision or by means
of a regulation cannot affect whether it is recognised as having direct effect. It is therefore necessary to reject the argument
in favour of the most-favoured-nation clause in the Cooperation Agreement having direct effect that Katsivardas derives from
the fact that the Cooperation Agreement was approved by a regulation, in contrast to the Framework Agreement on Cooperation
which was approved by a decision.
With regard to Article 4 of the Cooperation Agreement, contrary to the Italian Government’s assertions, the fact that this
article appears in a cooperation agreement does not mean that, as a matter of principle, individuals cannot rely upon it.
It is settled case-law that the fact that such an agreement is intended essentially to promote the economic development of
the non-member countries party to it, confining itself to instituting cooperation between the parties without being directed
towards future accession of those countries to the European Union, is not such as to prevent certain of its provisions from
being directly applicable (see, by analogy, Case 87/75
Conceria Bresciani
[1976] ECR 129, paragraph 23;
Kupferberg
, paragraph 22; and Case C-18/90
Kziber
[1991] ECR I-199, paragraph 21).
However, in paragraph 58 of the judgment in
Van Parys
, the Court, answering a question relating to the interpretation of the most-favoured-nation clause in the Framework Agreement
on Cooperation which succeeded the Cooperation Agreement, held that that clause may not be relied upon by an individual before
a court of a Member State. That interpretation is not called into question by any of the interested parties which have submitted
observations to the Court in the present proceedings.
It should therefore be examined whether there are factors that permit that assessment of the most-favoured-nation clause in
the Framework Agreement on Cooperation to be departed from so far as concerns the interpretation of the most-favoured-nation
clause in the Cooperation Agreement.
It is true that the most-favoured-nation clause as set out in the Framework Agreement on Cooperation is couched in terms that
diverge from those of the most-favoured-nation clause in the Cooperation Agreement. However, the fact that the latter is drafted
differently can be considered a factor requiring a divergent interpretation as regards its possible direct effect only in
so far as the general scheme of the agreements and their aims show that the contracting parties intended, by the difference
in drafting, to deny Article 4 of the Framework Agreement on Cooperation direct effect previously accorded to Article 4 of
the Cooperation Agreement.
However, the Framework Agreement on Cooperation, in particular Article 4 thereof, does not display characteristics showing
the contracting parties to be placed in a less favourable position compared with the position that they had under the Cooperation
Agreement, in particular in relation to the clause providing for most-favoured-nation treatment.
On the contrary, as regards first of all the nature and the object of the Framework Agreement on Cooperation, it must be stated
that it has the aim of renewing and deepening the mutual commitments entered into by the contracting parties under the Cooperation
Agreement. Whilst those two agreements were concluded between the same parties and their implementation falls within the same
institutional framework, through the retention, by virtue of Article 32(1) of the Framework Agreement on Cooperation, of the
Joint Committee and the sub-committees established by the Cooperation Agreement, the Framework Agreement on Cooperation provides
for cooperation that is wider, as regards the number of fields concerned, and deeper so far as concerns the specific actions
envisaged.
Furthermore, the change in name from a cooperation agreement to a framework agreement on cooperation stems, as Article 39(1)
of the Framework Agreement on Cooperation shows, from the intention of the contracting parties to give themselves the ability
to supplement that framework agreement by means of sectoral agreements or agreements on specific activities, and not from
an intention to enter into commitments having a narrower scope.
Comparison of the two agreements thus reveals a gradual strengthening in the intensity of the cooperation to which the parties
committed themselves.
Moreover, as the Commission points out, when Article 4 of the Cooperation Agreement was adopted, the member countries of the
Cartagena Agreement were not yet all parties to the 1947 GATT. As the Court observed in paragraph 57 of the judgment in
Van Parys
, in relation to the Framework Agreement on Cooperation, the intention of the parties to that framework agreement was to extend
the application of the system drawn up within the framework of the 1994 GATT to the member countries of the Cartagena Agreement,
in order to grant them the benefit of the most-favoured-nation clause in Article I(1) of the GATT, without altering its scope.
The same reasoning holds true for the Cooperation Agreement, since the drafting of Article 4 thereof clearly does not reveal
an intention of the contracting parties to grant the three member countries of the Cartagena Agreement which were not yet
parties to the 1947 GATT trade concessions going beyond those which they had granted to their GATT partners.
It follows that the Court’s decision in
Van Parys
as to the lack of direct effect of the most-favoured-nation clause in the Framework Agreement on Cooperation is also valid
in relation to Article 4 of the Cooperation Agreement.
In light of the foregoing, the answer to the question referred is that Article 4 of the Cooperation Agreement approved by
Regulation No 1591/84 is not such as to confer on individuals rights upon which they might rely before the courts of a Member
State.

Costs
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 matter for that court. Costs incurred in submitting observations to the Court, other than the costs
of those parties, are not recoverable.
On those grounds, the Court (Third Chamber) hereby rules:
Article 4 of the Cooperation Agreement concluded between the European Economic Community, of the one part, and the Cartagena
Agreement and the member countries thereof – Bolivia, Colombia, Ecuador, Peru and Venezuela – of the other part, approved
by Council Regulation (EEC) No 1591/84 of 4 June 1984, is not such as to confer on individuals rights upon which they might
rely before the courts of a Member State.
[Signatures]
*
Language of the case: Greek.