OPINION OF ADVOCATE GENERAL

STIX-HACKL

delivered on 20 January 2004 ( )

Joined Cases C-37/02 and C-38/02

Adriano Di Lenardo Srl

v

Ministero del Commercio con l’Estero





and





Dilexport Srl

v

Ministero del Commercio con l’Estero

(Reference for a preliminary ruling from the Tribunale amministrativo regionale per il Veneto (Italy))

(Bananas – Import arrangements – Regulation (EC) No 896/2001 – Validity – Legal certainty – Protection of legitimate expectations – Retroactivity – Right to pursue a trade or profession)





Table of contents





I – Introduction

II – Legal framework

A – Council Regulations

1. Regulation No 404/93

2. Regulation No 1637/98

3. Regulation No 216/2001

B – Implementing provisions adopted by the Commission

1. Regulation No 1442/93

2. Regulation No 2362/98

3. Regulation No 896/2001

III – Facts, main proceedings and questions submitted

IV – First, second and third questions submitted

A – Parties’ submissions

1. Main submissions of Di Lenardo and Dilexport

2. Main submissions of the Commission

B – Legal assessment

1. Provisions to be examined

2. Examination of Articles 3, 4, 5 and 31 of Regulation No 896/2001 in the light of legal basis

a) Article 3

b) Articles 4 and 5

c) Article 31

3. Examination in the light of the principle of non-retroactivity as well as the principles of legitimate expectation and legal certainty

a) Prohibition on retroactivity

b) Protection of legitimate expectations and legal certainty

V – Concerning the fourth question submitted: Article 6 of Regulation No 896/2001

A – Main submissions of the parties

B – Legal assessment

VI – Conclusion

I – Introduction

1. This reference for a preliminary ruling concerns the arrangements for importing bananas, in particular the validity of an implementing regulation adopted in respect of – amended – Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organisation of the market in bananas. ( )

II – Legal framework

2. The Community’s scheme for importing bananas is based – from a legal perspective – on a Council Regulation and the relevant implementing provisions adopted by the Commission. Since the system was introduced in 1993, there have been several amendments to both.

A – Council Regulations

1. Regulation No 404/93

3. With effect from 1 July 1993, Regulation No 404/93 established a common system to govern imports of bananas (Articles 15 to 20). This regulation distinguishes between bananas produced within the Community, those from ACP countries and those from third countries. As regards ACP bananas, a distinction is made between traditional bananas and non-traditional bananas. Originally, this system provided for an annual tariff quota for bananas from third countries and non-traditional ACP bananas. This quota was divided between operators who had marketed third country and/or non-traditional ACP bananas (category A), operators who had marketed Community and/or traditional ACP bananas (category B) and operators who, since 1992, had started to market bananas other than the latter (category C).

4. The 13th and 15th recitals state:

‘… in order to comply with the aims stated above, while taking into account the special features of marketing bananas, a distinction must be made when administering the tariff quota between, on the one hand, operators who have previously marketed third country bananas and non-traditional ACP bananas and, on the other, operators who have previously marketed bananas produced in the Community [and traditional ACP bananas] while leaving a quantity available for new operators who have recently embarked on commercial activity or are about to embark on commercial activity in this sector;

… in adopting additional criteria which operators should respect, the Commission is guided by the principle whereby the licences must be granted to natural or legal persons who have undertaken the commercial risk of marketing bananas and by the necessity of avoiding disturbing normal trading relations between persons occupying different points in the marketing chain;’

2. Regulation No 1637/98

5. The agreements reached under the auspices of the WTO were enacted through Council Regulation (EC) No 1637/98 of 20 July 1998 amending Regulation (EEC) No 404/93 on the common organisation of the market in bananas. ( ) The distinction between different groups of operators was maintained.

6. According to the second paragraph of Article 16 of Regulation No 404/93, as amended:

‘1. “traditional imports from ACP States” means imports into the Community of bananas originating in the States listed in the Annex hereto up to a limit of 857 700 tonnes (net weight) per year; these are termed “traditional ACP bananas”;

2. “non-traditional imports from ACP States” means imports into the Community of bananas originating in ACP States but not covered by definition 1; these are termed “non-traditional ACP bananas”;

3. “imports from non-ACP third States” means bananas imported into the Community originating in third States other than the ACP States; these are termed “third State bananas”.’

3. Regulation No 216/2001

7. In view of problems connected with the WTO, the Council laid down new import provisions, with effect from 1 July 2001, through Regulation (EC) No 216/2001 of 29 January 2001 amending Regulation (EEC) No 404/93 on the common organisation of the market in bananas. ( )

8. Article 17 of Regulation No 404/93, as amended, provides inter alia:

‘To the extent necessary, importation of bananas into the Community shall be subject to submission of an import licence, to be issued by Member States to any interested parties irrespective of their place of establishment in the Community and without prejudice to specific provisions adopted for the application of Articles 18 and 19.

Such import licences shall be valid throughout the Community …’

9. Article 18 provides for the opening of tariff quotas (A, B and C) for bananas from all third countries.

10. Article 19, as amended, states:

‘(1) The tariff quotas may be managed in accordance with the method based on taking account of traditional trade flows (“traditionals/newcomers”) and/or other methods.

(2) The method adopted shall take account as appropriate of the need to maintain the equilibrium of supply to the Community market.’

11. According to Article 20(a) the Commission is to adopt implementing provisions under the procedure set out in Article 27, including rules on the management of the tariff quotas referred to in Article 18.

B – Implementing provisions adopted by the Commission

1. Regulation No 1442/93

12. In order to implement Regulation No 404/93, and on the basis of Article 20 of that regulation, Commission Regulation (EEC) No 1442/93 of 10 June 1993 was adopted, laying down detailed rules for the application of the arrangements for importing bananas into the Community. ( ) These set the criteria for category A and B operators according to a reference period.

2. Regulation No 2362/98

13. Commission Regulation (EC) No 2362/98 of 28 October 1998 laying down detailed rules for the implementation of Council Regulation (EEC) No 404/93 regarding imports of bananas into the Community ( ) was adopted to implement Regulation No 1637/98. This abolished the division of the quota between the three groups of operators and introduced the distinction between traditional operators and newcomers.

14. Traditional operators were economic agents who, in 1994, 1995 and 1996 had imported certain minimum quantities from third countries and/or ACP States. Newcomers, on the other hand, were economic agents who, in one of the three years immediately preceding the year in respect of which registration was sought, had been engaged independently in commercial importation, and had undertaken imports to a declared customs value of at least ECU 400 000. Whereas traditional operators were annually granted a reference quantity on the basis of actual imports of bananas during the period of reference, newcomers were merely allocated a specified quantity established on the basis of all allocation requests and the total quantity available for this group of operators.

3. Regulation No 896/2001

15. Implementing provisions in respect of Regulation No 216/2001 were adopted through Commission Regulation (EC) No 896/2001 of 7 May 2001 laying down detailed rules for applying Council Regulation (EEC) No 404/93 as regards the arrangements for importing bananas into the Community. ( ) This regulation was published on 8 May 2001 and took effect from 1 July 2001.

16. According to Article 1, that regulation lays down detailed rules for applying the arrangements for importing bananas under the tariff quotas provided for in Article 18(1) of Regulation No 404/93 and also outside those quotas.

17. That regulation replaced the distinction between traditional operators and newcomers with a distinction between traditional and non-traditional operators, and, within the category of traditional operators, further distinguished between A/B (third country and/or non-traditional ACP bananas) and C (traditional ACP bananas) operators.

18. Recital 7 states:

‘(7) Experience from several years of applying the Community banana import arrangements indicates the need to tighten the criteria for non-traditional operators and the eligibility criteria for new operators so as to avoid the registration of purely fictitious agents and the grant of allocations in response to artificial or speculative applications. In particular, it is justifiable to demand a minimum of experience in importing fresh bananas. … For the same purpose, the grant of an annual allocation in subsequent years should be made subject to a minimum rate of use of the previous annual allocation.’

19. Article 3 provides, inter alia:

‘For the purposes of this regulation:

1. “traditional operators” means economic agents, whether natural persons or entities having legal personality, individual agents or groups, established in the Community during the period for determining their reference quantities, who have, for their own account, purchased a minimum quantity of bananas originating in third countries from the producers or, where applicable, produced, consigned and sold such products in the Community.

Operations as defined in the previous subparagraph shall hereinafter be called “primary imports”.

…

2. “traditional operators A/B” means traditional operators who have carried out the minimum quantity of primary imports of “third-country bananas” and/or “non-traditional ACP” bananas in accordance with the definitions in Article 16 of Regulation (EEC) No 404/93, as amended by Regulation (EC) No 1637/98;

3. “traditional operators C” means traditional operators who have carried out the minimum quantity of primary imports of “traditional ACP bananas” in accordance with the definitions in the abovementioned Article 16, as amended by Regulation (EC) No 1637/98.’

20. Recital 5 states:

‘(5) The reference period to be used for defining categories of operators and determining the reference quantities of traditional operators should be the three-year period 1994 to 1996. The three-year period 1994 to 1996 is the most recent for which the Commission has sufficiently reliable data on primary imports. Using that period can also resolve a dispute which has been going on for a number of years with certain of the Community’s trading partners. In the light of the available data established for the purpose of administering the quotas opened in 1998, traditional operators need not be registered.’

21. Article 4 provides, inter alia: ( )

‘1. The reference quantity for each traditional operator A/B who submits a written application no later than 11 May 2001 shall be established on the basis of the average of primary imports of third-country bananas and/or non-traditional ACP bananas during 1994, 1995 and 1996 taken into account for 1998 for the purposes of administering the tariff quota for imports of third-country bananas and non-traditional ACP bananas, in accordance with the provisions of Article 19(2) of Regulation (EEC) No 404/93 applicable in 1998 to the category of operators referred to in paragraph 1(a) of that article.

2. The reference quantity for each traditional importer C who submits a written application no later than 11 May 2001 shall be established on the basis of the average of primary imports of traditional ACP bananas during 1994, 1995 and 1996 carried out for 1998 as traditional quantities of ACP bananas.’

22. Recital 10 states:

‘(10) For the purposes of implementing the tariff quota arrangements on 1 July 2001, it is appropriate to maintain the administrative rules based on periods as created by Commission Regulation (EC) No 2362/98 of 28 October 1998 laying down detailed rules for the implementation of Council Regulation (EEC) No 404/93 regarding imports of bananas into the Community, as last amended by Regulation (EC) No 1632/2000, with adjustments where necessary. Those rules relate in particular to fixing the indicative quantities for the first three quarters, the ceilings for individual applications, the frequency for the submission of licence applications and for the issue of licences, and the issue of licences for the re-use of unused quantities. However, the fact that tariff quotas A and B on the one hand and C on the other are managed separately as regards the share allocated to traditional operators means that those operators may submit licence applications only under the tariff quota for which they have been granted and notified of a reference quantity.’

23. Article 5 states:

‘1. The Member States shall notify the Commission of the sum of the reference quantities referred to in Article 4(1) and (2) no later than 15 May 2001.

2. Using the information received under paragraph 1, and in light of the total quantities available under tariff quotas A/B and C, the Commission shall, where appropriate, set a single adjustment coefficient to be applied to each operator’s reference quantity.

3. Where paragraph 2 applies, the competent authorities shall notify each operator of their reference quantity as adjusted by the adjustment coefficient not later than 7 June 2001.

4. The competent authorities in each Member State shall be as listed in the Annex. That list shall be amended by the Commission at the request of the Member States concerned.’

24. Article 6 states:

‘For the purposes of this regulation, “non-traditional operators” means economic agents established in the Community at the time of their registration who:

(a) have been engaged independently and on their own account in the commercial activity of importing into the Community fresh bananas falling within CN code 0803 00 19 in the two years immediately preceding the year in respect of which registration is sought;

(b) by virtue of this activity, have imported produce to a declared customs value of EUR 1 200 000 or more during the period referred to in point (a); and

(c) do not have a reference quantity as a traditional operator under the tariff quota for which they are applying for registration under Article 7 and who are not a natural person or entity having legal personality related, within the meaning of Article 143 of Commission Regulation (EEC) No 2454/93, to a traditional operator.’

25. Article 143 of Regulation No 2454/93, ( ) as amended by Commission Regulation (EC) No 46/1999 of 8 January 1999 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code, ( ) provides, inter alia:

‘1. For the purposes of Title II, Chapter 3 of the Code and of this title, persons shall be deemed to be related only if:

(a) they are officers or directors of one another’s businesses;

(b) they are legally recognised partners in business;

…

(d) any person directly or indirectly owns, controls or holds 5% or more of the outstanding voting stock or shares of both of them;

(e) one of them directly or indirectly controls the other;

(f) both of them are directly or indirectly controlled by a third person;

(g) together they directly or indirectly control a third person; or

…

2. For the purposes of this title, persons who are associated in business with one another in that one is the sole agent, sole distributor or sole concessionaire, however described, of the other shall be deemed to be related only if they fall within the criteria of paragraph 1.’

26. Article 31 of Regulation No 896/2001 repeals Regulation No 2362/98 from 1 July 2001 and provides for its continued application to import licences issued for 2001. As a further transitional provision, Article 28 provides, inter alia:

‘1. For the second half of 2001, the quantities available shall be:

– for tariff quotas A/B: 1 137 159 tonnes,

– for tariff quota C: 509 359 tonnes.

2. For the second half of 2001, the reference quantity for each traditional operator established in accordance with Article 4 and after the application of Article 5(2) shall be multiplied by the coefficient 0.4454 in the case of traditional operators A/B and by the coefficient 0.5992 in the case of traditional operators C.

…’

III – Facts, main proceedings and questions submitted

27. The two Italian undertakings, Di Lenardo Adriano Srl and Dilexport Srl (hereinafter: Di Lenardo and Dilexport), are engaged in the import of and trade in fresh bananas from third countries. They have been recognised and registered as operators in Italy eligible for an allocation of a tariff quota within the meaning of Regulation No 404/93 and the Commission’s implementing provisions since 1993. They operated in that capacity until 30 June 2001. As is evident from the national court’s decision, Di Lenardo and Dilexport are treated as related undertakings for the purposes of Article 143 of Regulation No 2454/93, because they are related through certain business partners.

28. Pursuant to Article 4 of Regulation No 896/2001, Di Lenardo and Dilexport applied on 11 May 2001 to the Ministero del Comercio con l’estero (Foreign Trade Ministry) to be included in the allocation of tariff quota A/B in respect of the second half of 2001 (1 137 159 tonnes) and requested notification of the quantity allocated by 7 June 2001.

29. By decision of 17 May 2001, the Foreign Trade Ministry refused the applications because the requirements of Article 4(1) of Regulation No 896/2001 had not been met, as it had emerged that no primary imports of bananas had been effected in 1994, 1995 and 1996.

30. Di Lenardo and Dilexport each brought an action in the Tribunale amministrativo regionale (Regional Administrative Court) per il Veneto for annulment of that decision, and for a declaration that the Foreign Trade Ministry was obliged to include them, as traditional operators, in the allocation of tariff quota A/B for the second half of 2001. They claimed that Regulation No 896/2001 was contrary to Regulation No 404/93, Articles 5 EC and 7 EC, the principles of legal certainty and protection of legitimate expectations, as well as Article 6 EU, and thus invalid.

31. The Foreign Trade Ministry considers its rejection of the application to be lawful on the grounds that Di Lenardo and Dilexport have never operated as primary importers, but as ‘secondary importers’ or ‘ripeners’, and that it was in that capacity that they had been allocated a quota in 1998.

32. By two decisions to make a reference for a preliminary ruling, the Tribunale amministrativo regionale per il Veneto has, in accordance with Article 234 EC, submitted the following questions to the Court:

‘(1) Do Articles 1, 3, 4, 5 and 31 of Regulation (EC) No 896/2001 conflict, first of all, with the Treaty, in particular Article 7 (formerly Article 4) thereof, and with the other rules and principles inherent in that Treaty with regard to the principle of the division of functions and powers between the Community institutions (in particular between the Council and the Commission)?

(2) Do the abovementioned articles of Regulation (EC) No 896/2001 conflict with the principle of non-retroactivity of laws and the associated principles of the protection of legitimate expectations and legal certainty?

(3) Do those same articles of Regulation (EC) No 896/2001 conflict with Council Regulation (EEC) No 404/93 of 13 February 1993 (as subsequently amended and supplemented), in particular with Article 20 of the latter Regulation?

(4) If the above questions are answered in the negative, the Court is asked to state whether, by precluding persons related to traditional operators from eligibility for allocation of a tariff quota, even as “non-traditional operators”, Article 6 of the aforementioned Commission regulation, in particular paragraph (c) thereof, conflicts with the fundamental right to pursue a professional activity, in this case the freedom to conduct a business?’

IV – First, second and third questions submitted

33. The first, second and third questions all concern the validity of the same provisions, namely Articles 1, 3, 4, 5 and 31 of Regulation No 896/2001, and will, therefore, be dealt with together.

A – Parties’ submissions

1. Main submissions of Di Lenardo and Dilexport

34. In relation to the first question to be determined, regarding the powers of the Community institutions and the EC Treaty, it is argued that, according to Article 7 EC, each institution can act only within the limits of the powers conferred upon it by the Treaty, and that Article 20 of Regulation No 404/93, as amended by Regulation No 216/2001, empowers the Commission to adopt implementing provisions. With Regulation No 896/2001, however, it is argued that the Commission has assumed the role of the Council. In this respect, reference is made to the introduction of the concept of primary importer within the meaning of Article 3 of the aforementioned regulation, and to the requirement that only primary importers should be regarded as traditional operators. This is contrary to the objective of Regulation No 404/93, of not disturbing trading relations between persons occupying different points in the marketing chain.

35. Article 1 of Regulation No 896/2001 is contrary to the principle of the division of powers and thus Article 7 EC. The unlawfulness of Article 3 of Regulation No 896/2001 entails Articles 4, 5 and 31 being likewise unlawful.

36. In relation to the second question to be determined, that is to say, the prohibition of retroactivity, and the principles of protection of legitimate expectations and legal certainty, it is argued that the abovementioned innovations revolutionised the system of Regulation No 404/93, because undertakings with more than 20 years’ experience were excluded. With this disproportionate measure, the Commission is in breach of the fundamental rights to the protection of property and to pursue a trade or profession, as well as Article 5 EC.

37. Application of the new definition of traditional operator to the reference period 1994-1996 led to retroactive effect and thus infringed the principles of protection of legitimate expectations and legal certainty.

38. In relation to the third question to be determined, that is, the possible conflict between Regulation No 896/2001 and Regulation No 404/93, it is argued that, in Regulation No 896/2001, the Commission introduced an allocation and definition that are totally alien to Regulation No 404/93. It thereby infringed not only Article 7 EC, but also Regulation No 404/93, namely the conferment of powers under Article 20 thereof.

2. Main submissions of the Commission

39. In the Commission’s view, only Articles 3, 4, 5 and 6 of Regulation No 896/2001 are relevant to the main proceedings. As these provisions do not all fall to be assessed against the same rules or principles, the Commission suggests that each regulation be examined separately, which represents a departure from the way in which the first, second and third questions referred have been formulated.

40. As regards the validity of Article 3 of Regulation No 896/2001, this must be assessed against Article 7(1) EC and the fourth indent of Article 211 EC as well as Article 20(a) of that regulation, as amended by Regulation No 216/2001.

41. According to the case-law of the Court, the concept of ‘implementation’ in the agricultural sector and the powers provided for in Article 20 of Regulation No 404/93 are to be given a wide interpretation. These rules were complied with.

42. Regulation No 404/93 specifically defines operators only in the recitals but not in the operative part; it makes a distinction according to the type of import instead. It follows that the Council did not wish to set stringent criteria for the allocation of import licences. That is why more detailed subjective criteria were required to be laid down. Further, the Commission had to consider the different types of imports, as well as the management of tariff quotas according to the type of operator (traditional or new) and thereby secure supplies to the common market.

43. The definition of the term ‘traditional operator’ was based on the concept of primary imports and is consistent with Regulation No 404/93. ‘Traditional market operators A/B’ and ‘C’ are even defined expressly by reference to that regulation. The focus on primary imports serves to develop trade structures and should improve the transparency of trade relations.

44. Further, the concept of ‘primary import’ is not new. Recourse was had to that provision because of the negative effects of Regulation No 2362/98. In addition, there was an eight‑year transitional period.

45. As regards the validity of Articles 4 and 5 of Regulation No 896/2001 with regard to the principles of the prohibition of retroactivity, protection of legitimate expectations and legal certainty, the Commission emphasises that recourse to a reference period is unavoidable, if a distinction is to be made between traditional and non-traditional operators.

46. As far as any retroactive effect is concerned, it must be pointed out that there is no such effect, because applications for the scheme under Regulation No 896/2001 could be made even before that regulation became applicable.

47. As regards the protection of legitimate expectations and legal certainty, the Commission argues, by reference to the case-law of the Court, that operators were in a position to know their rights and obligations in good time and on the basis of clear rules. The timetable provided served to take account of the individual situation of traditional operators and to facilitate a ‘painless’ transition.

B – Legal assessment

48. With its first, second and third questions, the referring court queries the validity of Articles 1, 3, 4, 5 and 31 of Regulation No 896/2001. As the Commission rightly argues, however, it must first be considered whether all these provisions are relevant to the main proceedings, and thus whether the Court should examine them.

49. Rather than follow the formulation put forward by the referring court and the Commission’s arguments, the provisions to be examined in the context of the first, second and third questions will be examined separately according to the criterion of assessment applicable.

1. Provisions to be examined

50. First, the Commission’s opinion must be considered, according to which Articles 1 and 31 of Regulation No 896/2001, expressly mentioned in the first question and referred to in the second and third, should be disregarded. Whether the Court has jurisdiction to determine the validity of those two provisions depends on whether they have to be taken into account in order to resolve the dispute in the main proceedings.

51. The relevance of Articles 1 and 31 of Regulation No 896/2001 is undermined by the fact that the significance of these two provisions in the main proceedings is not apparent from the two decisions to make a reference for a preliminary ruling.

52. This should, however, turn on whether Articles 1 and 31 apply at all.

53. Since Article 1 simply provides that Regulation No 896/2001 lays down detailed rules for applying the arrangements for certain bananas imports, without laying down further rules, I agree with the Commission that this provision has no relevance for the main proceedings.

54. Article 31 contains two provisions: it repeals the Commission’s previous implementing regulation and provides for its continued application to import licences issued for 2001. Article 31 thus proves to be one of the central provisions as far as the validity in time of Regulation No 896/2001 is concerned. The Commission’s arguments with regard to its non-applicability would also apply to another provision, namely Article 32, which governs entry into force.

55. The time aspect is the subject of these proceedings. Thus the second question referred expressly concerns the prohibition of retroactivity, as well as the principles of protection of legitimate expectations and legal certainty. As the main proceedings relate to the issue of licences from the second half of 2001, that part of Article 31 according to which import licences issued under the old implementing provisions continue to apply can have no significance for the main proceedings.

2. Examination of Articles 3, 4, 5 and 31 of Regulation No 896/2001 in the light of legal basis

a) Article 3

56. The reservations as to the validity of Article 3 of Regulation No 896/2001 relate to the legal definition of ‘traditional operators’, and in particular to the definition of primary imports introduced by that provision. Since only primary importers now counted as traditional operators, the pool of eligible persons was reduced, which happens to have affected and still affects Dilexport and Di Lenardo.

57. The criterion by which to test the validity of the disputed provision is the basic Council regulation, namely Regulation No 404/93, as amended by Regulation No 216/2001.

58. This reference is significant because of doubts expressed, in this context, as to compatibility with the aim referred to in the 15th recital of Regulation No 404/93 of ‘avoiding disturbing normal trading relations between persons occupying different points in the marketing chain’, and thereby at the same time as to compatibility with Article 20 of the Council’s basic regulation.

59. In this respect, it should be pointed out, however, that the Council’s basic regulation has been amended several times since Regulation No 404/93, and that cannot but have an impact on the significance of the recitals. Furthermore, recitals cannot, in themselves, constitute a criterion for assessment, but acquire sufficient normative significance only in connection with the operative part.

60. The problem in issue in these proceedings concerns in essence the question whether the Commission was empowered to adopt Article 3 of Regulation No 896/2001, that is, whether this is a provision which can be described as an implementing rule.

61. According to the settled case-law of the Court on the implementing powers of the Commission in general, the Commission, in accordance with the fourth indent of Article 211 EC, in order to ensure the proper functioning and development of the common market, is to exercise the powers conferred on it by the Council for the implementation of the rules laid down by the latter. ( )

62. The Court has consistently held that it follows from the Treaty context in which Article 211 EC must be placed, and also from practical requirements, that the concept of implementation must be given a wide interpretation. Since only the Commission is in a position to keep track of agricultural market trends and to act quickly when necessary, the Council may confer on it wide powers in that sphere. Consequently, the limits of those powers must be determined by reference to the essential general aims of the market organisation. ( )

63. Furthermore, the Court has held that, in matters relating to agriculture, the Commission is authorised to adopt all the measures which are necessary or appropriate for the implementation of the basic legislation, provided that they are not contrary to such legislation or to the implementing legislation adopted by the Council. ( )

64. The relevant basic regulation of the Council, that is to say, Regulation No 404/93, as amended by Regulation No 216/2001, expressly provides in Article 20 that the Commission is empowered to adopt provisions to implement Title IV ( ) of the Council’s basic regulation. That provision even lays down an obligation for the Commission to lay down certain rules.

65. The rules laid down by the Commission, in which it establishes different types of operators, can be seen in connection with the rules laid down by the Council as to the different types of imports, as were contained in Article 16 as amended by Regulation No 1637/98. That does not mean, however, that that provision constitutes the criterion for assessing the validity of the Commission’s rules, because Article 16 acquired a new content under Regulation No 216/2001.

66. The Commission’s powers are, therefore, to be viewed in the light of the amended basic regulation, in particular as regards the fact that the Council itself did not give any more details according to the type of importer or import.

67. The Council laid down how the tariff quotas could be managed in Article 19 as amended by Regulation No 216/2001. It is expressly provided, however, in Article 20(a) that the detailed rules on such management are to be laid down by the Commission. Article 19 thus defines more specifically the substance of the Commission’s implementing powers in a particular respect.

68. This more detailed definition of the management of tariff quotas in Article 19(1) does not, however, include any strict requirements. Thus the tariff quotas can be managed in accordance with the method of traditional trade flows or another method. That second alternative gives the Commission greater flexibility. This is, of course, limited again in Article 19(2). Thereunder, the method chosen by the Commission is to take as appropriate account of the need to maintain the equilibrium of supply to the Community market.

69. The power of the Commission, which is responsible for the management of the common market organisation in bananas, to define more closely the concept of operators so as to include only primary importers flows from the need to ensure the functioning of the import rules.

70. The amendment to the Council’s basic regulation by Regulation No 216/2001 also enabled the Commission to introduce a system different from that which had obtained until then.

71. In that connection, it must be emphasised that none of the aims pursued by the basic regulation represents an obstacle to the introduction of the concept of primary importer.

72. Even if the provisions of Article 3 of Regulation No 896/2001, that is the legal definition of ‘traditional operators’, are not subsumed under the ‘rules on the management of the tariff quotas referred to in Article 18’ mentioned in Article 20(a) of Regulation No 216/2001, that does not mean that the Commission was not empowered to adopt the provision in issue. It follows that the wording of Article 20 does not preclude the Commission from adopting such detailed implementing rules which, although not expressly referred to in that provision, are necessary for the functioning of the import system. ( )

b) Articles 4 and 5

73. With regard to Articles 4 and 5 of Regulation No 896/2001, it must first be noted that these concern the establishment of the reference period. Since this aspect is disputed only in relation to compatibility with certain legal principles, reference must be made to the reply to the second question referred.

74. As regards Article 5 of Regulation No 896/2001, it may further be pointed out that this provision relates to various notification obligations, and the Commission’s obligation to set an adjustment coefficient and to amend a list. These are typical aspects of the management of tariff quotas. Since the legal authority of the Commission under Article 20 of Regulation No 404/93, as amended by Regulation No 216/2001, expressly includes in Article 20(a) details of the management of tariff quotas as the subject‑matter of the Commission’s implementing provisions, there is no doubt that the provisions in Article 5 of Regulation No 896/2001 fall within the scope of the Council’s basic regulation.

c) Article 31

75. Article 31 of Regulation No 896/2001 governs certain aspects of the scope of its validity and application. So far as the repeal of Regulation No 2362/98 with effect from 1 July 2001 is concerned, the Commission has the power, in the absence of special provisions as to procedure, to repeal one of its own regulations. With regard to the continued validity of licences issued pursuant to the repealed regulation, as provided for in Article 31, the same is true. Thus the Commission may adopt rules limiting the effect of the repeal on cases decided pursuant to the regulation that is to be repealed, at least where, as in the present case, this is done in order to preserve the former legal position for the benefit of the holders of ‘old’ licences.

76. By repealing the old regulation and applying the new regulation with effect from 1 July 2001, the Commission has also complied, furthermore, with the requirements of Article 2 of Regulation No 216/2001. Under that article, the entry into force of the Council regulation may be deferred until 1 July 2001. The Commission had availed itself of this option before. ( )

77. Examination of the first and third questions referred has, therefore, disclosed nothing which could affect the validity of Articles 3, 4, 5 and 31 of Regulation No 896/2001.

3. Examination in the light of the principle of non-retroactivity as well as the principles of legitimate expectation and legal certainty

78. In the second question referred, the national court refers to a series of principles which, in its view, should be used as criteria of validity, namely the prohibition on retroactivity as well as the principles of legitimate expectation (protection of legitimate expectations) and legal certainty. First, we must examine whether each of these principles can constitute an independent criterion. Different opinions are offered as to the relationship of these principles with each other. Thus, on the one hand, the prohibition on retroactivity is regarded as a particular expression of the principle of legal certainty, and on the other as a subset of the principle of protection of legitimate expectations. The case‑law of the Court contains, apart from references to derivations from the principle of legal certainty, ( ) references also to the fact that the prohibition on retroactivity is to be treated as a stand‑alone principle. ( ) All concur, therefore, that there are independent precepts or prohibitions. Therefore, the contested provisions of Regulation No 896/2001 will hereinafter be examined in relation on the one hand to the prohibition on retroactivity, and on the other to the principles of the protection of legitimate expectations and legal certainty.

a) Prohibition on retroactivity

79. As regards retroactivity, a distinction must be made between genuine and quasi-retroactivity.

80. Legislation has genuine retroactivity, according to the settled case-law of the Court, ( ) where it begins to take effect on a date prior to its publication. Such an effect is in principle prohibited. As the regulation in issue was published on 8 May 2001, but only took effect from 1 July 2001, it does not, in any event, have a genuine retroactive effect.

81. The question arises whether Regulation No 896/2001 has quasi‑retroactive effect. By this we mean the application of new legislation to the future consequences of circumstances which arose while previous legislation was in force. That would be the case if Regulation No 896/2001 applied to procedures which began before the regulation came into force, but which had not yet been completed at that time.

82. In the present case, however, the contested provisions do not even have a quasi-retroactive effect of this kind. The only relevant circumstances which arose before Regulation No 896/2001 came into force were imports during reference periods. But these were completed. The old licences are unaffected and were also used, that is the contracts were performed.

83. A quasi-retroactive effect would obtain only if the new rules applied to licences which were issued under the old rules and had not yet been used. But even such an effect, that is a quasi-retroactive effect, would, according to the settled case-law of the Court, ( ) not generally be prohibited.

84. Regulation No 896/2001, as is clear from Article 31, only applies to future circumstances, that is it concerns the issue of licences for imports which will only be undertaken in the second half of 2001. This distinguishes the present case from Biegi, ( ) which concerned the application of new rules to past circumstances.

85. The reference period alone is in the past. But as the Commission has rightly pointed out, that is typical for schemes based on reference quantities and years. Furthermore, such legal constructions form an essential significant element of the Community’s agricultural organisations, and have been declared by the Court to be in principle permissible. ( )

b) Protection of legitimate expectations and legal certainty

86. As regards the protection of legitimate expectations and legal certainty, we must first examine how these two principles relate to each other, and determine whether they are two separate criteria, which should be examined separately.

87. Case-law includes references to the fact that the Court regards the principle of the protection of legitimate expectations as a corollary of the principle of legal certainty. ( ) The difference between the two principles is most apparent in the fact that the principle of legal certainty rests on an objective element, whereas the principle of the protection of legitimate expectations is subjective in nature.

88. The principle of legal certainty requires legal rules to be clear and precise, and ensures that situations and legal relationships governed by Community law remain foreseeable. ( ) The first aspect, precision, is not relevant in these proceedings. The second is crucial, namely the continuance of a particular legal situation.

89. This protection of the status quo does not, however, mean that the law cannot be changed. The mere existence of a legal provision is not sufficient, that is it does not, in itself, give grounds for such a belief. Given the legislature’s freedom, Community citizens cannot, according to the case-law of the Court, rely on the preservation of a given situation, which the Community institutions may amend within the parameters of their authority. ( )

90. The principle of the protection of legitimate expectations incorporates three conditions. First, the Community must have created a situation giving rise to a legitimate expectation. ( ) Justified hopes may also have been raised by a Community institution. ( )

91. In the present case, Regulation No 896/2001 had the effect of restricting certain undertakings when compared with the previous legal situation. However, as Regulation No 896/2001 does not, according to Article 31 thereof, apply to old import licences, the problem of the protection of legitimate expectations and legal certainty does not arise in relation to this provision.

92. In spite of the change in the legal situation, however, certain core elements of the old scheme were preserved. Thus, the system of reference periods and reference quantities was retained, and, in addition, the same reference years were to remain decisive.

93. The introduction of restrictions is to be expected, however, ‘in an area such as that of the common organisation of the markets, the objective of which involves constant adjustment to reflect changes in economic circumstances’. ( )

94. This applies particularly to the importation of third‑country bananas. Having regard to the development of the law since the adoption of Regulation No 404/93 and developments in the framework of the WTO, as well as the numerous amendments to that Council regulation, the economic groups concerned could expect even further change. From that point of view, there can have been no expectation of stability.

95. As regards the condition that the situation must have been brought about by Community institutions, it must be stressed that neither the Council nor the Commission has created a situation which can give rise to a legitimate expectation. Nor can it be claimed that – as the case-law ( ) requires – they have encouraged those subject to the law to undertake a particular type of action.

96. It follows from the above that the first condition of the principle of protection of legitimate expectations, namely a legitimate expectation on the part of the importers affected by the adverse change, is not satisfied.

97. But even if one assumes a legitimate expectation on the part of the operator, there is still a second condition: were the persons concerned entitled to their expectations? According to case-law, those expectations which an undertaking belonging to the economic sector affected could have must also be taken into account. ( ) An objective test applies in this respect. It is not relevant, therefore, whether Di Lenardo and Dilexport had certain expectations in the present case, but what ‘a prudent and discriminating trader’ should have foreseen, ( ) that is what such a – typical – operator might expect. Di Lenardo and Dilexport were not entitled to expect that the legal situation would remain unchanged.

98. As neither the first nor the second condition of the principle of the protection of legitimate expectations has been met, there is no need to examine the third condition, namely whether the Community interest overrides the interests of the individual.

99. The answer to the second question submitted is, therefore, that an examination of the prohibition on retroactivity and the principles of the protection of legitimate expectations and legal certainty has disclosed nothing that could affect the validity of Articles 3, 4, 5 and 31 of Regulation No 896/2001.

V – Concerning the fourth question submitted: Article 6 of Regulation No 896/2001

A – Main submissions of the parties

100. Di Lenardo and Dilexport argue that, under Regulation No 896/2001, the Commission has not restricted itself to amending the criteria for traditional operators, but has introduced in Article 6 a radical restriction in respect of non-traditional operators. This applies in particular to the rule contained in Article 6(c) concerning persons who are ‘related’, within the meaning of Article 143 of Regulation No 2454/93, to a traditional operator. Undertakings such as Di Lenardo and Dilexport, which are related to traditional operators, are thereby excluded from the banana market, without being able to prove their independence. This is contrary to Regulation No 216/2001 and infringes the rights of the defence, and the right to pursue a trade or profession.

101. The Commission points out that the definition of non-traditional operators in Article 6 of Regulation No 896/2001 accords with the definition of new operators in Regulation No 2362/98. The restriction on related undertakings corresponds with the purpose referred to in the seventh recital of tightening the eligibility criteria. Furthermore, the new rule is, it argues, a consequence of the new stance on ripeners and a response to the trade in import licences, in which related undertakings in particular were engaged.

102. As regards the claimed restriction on the freedom to pursue a trade or profession, the Commission points out that Di Lenardo and Dilexport can continue to pursue their activities, because they are related to a traditional operator, which can obtain licences. The new rule only prevents the speculative trade in licences. Restrictions on commercial activities are permissible under certain conditions. After all, one cannot talk of acquired rights in relation to the issue of licences in the context of tariff quotas.

B – Legal assessment

103. The fourth question submitted concerns the validity of Article 6 of Regulation No 896/2001, in particular Article 6(c), in the light of the fundamental right to pursue a trade or profession.

104. In preliminary ruling proceedings, however, it is not for the Court to investigate facts or to apply Community legislation to specific facts. How Di Lenardo and Dilexport are related, and whether they are related undertakings within the meaning of Article 143 of Regulation No 2454/93, are thus for the national court to determine. As is apparent from the order for reference, the national court has undertaken that task. Further, the Court is not required to test whether, and to what extent, Di Lenardo and Dilexport are autonomous. Finally, these proceedings are not required to determine whether these two undertakings could be accused of any past misuse in relation to licences.

105. For procedural reasons, it appears doubtful whether the irrebuttable presumption inherent in Article 143 of Regulation No 2454/93 is to be examined. The Court has indeed concerned itself with the permissibility of such presumptions, but in relation to entirely different categories of case. One category concerned the legislation of Member States, that is the conformity of presumptions contained therein with directives requiring implementation or with primary law. ( ) The other category concerned proceedings before the Commission in competition or anti-dumping cases, namely investigations of undertakings by Community institutions. ( ) In essence, therefore, they concerned the rights of the defence. Di Lenardo and Dilexport have claimed infringement of such rights in the present proceedings and in the proceedings before the national court.

106. By contrast, the subject of the fourth question submitted is, however, the alleged infringement of the right to pursue a trade or profession, thus a different fundamental right, of a substantive nature.

107. With regard to the principle raised by Di Lenardo and Dilexport of the rights of the defence, in particular the right to a fair hearing, it must be noted that, in preliminary ruling proceedings, the Court is in principle bound to consider the questions submitted, and may not extend the subject‑matter on the basis of the pleadings of one of the parties to the main proceedings. This also applies in relation to the questions submitted concerning the validity of the acts of Community institutions.

108. Consideration must thus be limited to the compatibility of Article 143 of Regulation No 2454/93 with the right to pursue a trade or profession.

109. According to settled case-law, the fundamental right to pursue a trade or profession forms part of the general principles of Community law. The freedom to pursue a trade or profession ‘[is] not absolute’, however, ‘but must be viewed in relation to [its] social function. Consequently, the exercise of … the freedom to pursue a trade or profession may be restricted, particularly in the context of a common organisation of a market, provided that those restrictions in fact correspond to objectives of general interest pursued by the Community and do not constitute in relation to the aim pursued a disproportionate and intolerable interference, impairing the very substance of the rights guaranteed’. ( )

110. In the question submitted, the right to freedom of commercial activity (‘libertà di impresa’) is expressly regarded as a subgroup of the freedom to pursue a profession. Although the Court has also sometimes used the concept of ‘freedom to carry on a business’ ( ) or of ‘freedom of trade as a fundamental right’, ( ) it is not because these are distinct from the right to pursue a trade or profession or to pursue an economic activity, ( ) but because terminology is not consistent.

111. First, it must be examined whether Article 6 of Regulation No 896/2001 has any impact at all in the protected area of the fundamental right to pursue a trade or profession. This provision contains the legal definition of ‘non-traditional operators’. As the regulation lays down special rules for the issue of licences to this group of operators, the legal definition acquires a decisive meaning. Anyone excluded from it will have no rights when it comes to the issue of licences. Such an undertaking cannot, therefore, undertake certain commercial activities either. Article 6 therefore infringes on the protected area of the fundamental right to pursue a trade or profession.

112. Article 6 of Regulation No 896/2001 does not, however, affect the substance of the right to pursue a trade or profession that is claimed by Di Lenardo and Dilexport, since it only concerns the means of exercising this right, without jeopardising the existence of the right itself. Article 6 does not lead to any possibility of importing bananas being excluded altogether. But that possibility is not available to all undertakings irrespective of their relationships under company law.

113. We must therefore examine below whether the aims of Article 6 of Regulation No 896/2001, in particular Article 6(c), serve the common good, whether they do not represent a disproportionate interference and whether the Council has not, therefore, exceeded its authority in the present case.

114. According to recital 6 in the preamble to Regulation No 896/2001, the purpose of Article 6 is to reserve a share of the tariff quotas for non-traditional operators. That share must allow operators who did not carry out any primary imports during the reference period to continue trading, to adapt to the new rules or to allow new operators to enter this import trade, thereby encouraging healthy competition.

115. The provision which has been particularly highlighted in the question submitted, Article 6(c), can be regarded as the Commission’s response to certain undesirable practices on the part of undertakings. It is apparent from recital 7 that this provision is aimed at tightening the criteria for non-traditional operators so as to avoid the registration of purely fictitious agents and the grant of allocations in response to artificial or speculative applications. This provision does not, therefore, have the aim of only preventing speculation in licences, but also of excluding the possibility that operators which have already obtained a licence participate in the issue of licences on further occasions by acting through a related undertaking.

116. The aim pursued by Article 6 of Regulation No 896/2001 does, therefore, serve the common good, as it counters undesirable practices.

117. The restriction in Article 6(c) on the opportunities for economic activity of certain undertakings, namely related undertakings, was also necessary in order to prevent circumvention and to put an end to the advantage given to related undertakings. Without such a provision, there would be a danger that the aim pursued by Regulation No 216/2001 – and underlying Regulation No 896/2001 – of ensuring a balanced supply to the common market could also no longer be adequately achieved. In any event, for the purpose of the assessment being made here of conformity with the fundamental right to pursue a trade or profession, the fact that the Commission referred to a provision of customs law, and thereby adopted its content, requires no further examination.

118. The difference in the situation of related and non-related banana traders thus justifies their different treatment. The exclusion of certain undertakings from the issue of licences, which is the effect of the contested provision, cannot, in these circumstances, be regarded as a disproportionate measure by the Commission. Related undertakings do have the option, through appropriate arrangements within the group of undertakings to which they belong, to develop economic activities.

119. As regards the appropriateness of the rule in Article 6(c), including Article 143 of Regulation No 2454/93 referred to therein, this is supported by the fact that the earlier provision, Article 11 of Regulation No 2362/98, which was less strict, was obviously not sufficiently effective. Further, the restriction of the right to pursue a trade or profession results only in very particular circumstances in the total impossibility of issuing an import licence.

120. It follows from the foregoing that the interference with the third‑country banana non-traditional operator’s right to pursue a trade or profession that is effected by Article 6 of Regulation No 896/2001 corresponds to objectives of general interest pursued by the Community and does not impinge upon the substance of this right. In these circumstances, it must be concluded that the Commission has not exceeded its authority in adopting this provision.

121. It follows from all the foregoing that the answer to be given to the national court is that examination of the fourth question submitted has disclosed nothing that could affect the validity of Article 6 of Regulation No 896/2001.

VI – Conclusion

122. It follows from all the foregoing, that the answers to the questions submitted must be:

(1) Consideration of the first and third questions submitted has disclosed nothing that could affect the validity of Articles 3, 4, 5 and 31 of Commission Regulation (EC) No 896/2001 of 7 May 2001 laying down detailed rules for applying Council Regulation (EEC) No 404/93 as regards the arrangements for importing bananas into the Community.

(2) Examination of the prohibition on retroactivity and the principles of the protection of legitimate expectations and legal certainty has disclosed nothing that could affect the validity of Articles 3, 4, 5 and 31 of Regulation No 896/2001.

(3) Consideration of the fourth question submitted has disclosed nothing that could affect the validity of Article 6 of Regulation No 896/2001.