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

Di Lenardo Adriano Srl and Dilexport Srl

v

Ministero del Commercio con l’Estero

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

(Bananas – Common organisation of the markets – Regulation (EC) No 896/2001 – Common system of trade with third countries – Primary imports – Validity – Protection of legitimate expectations – Retroactivity – Implementing power)

Summary of the Judgment

1. Agriculture – Common organisation of the markets – Bananas – Arrangements for importation – Regulation No 404/93 – Operators eligible for the allocation of tariff quotas – Absence of definition – Delegation of implementing power to the Commission entailing broad discretion on its part – Regulation No 896/2001 laying down definition of those operators

(Art. 211 EC; Council Regulation No 404/93, Arts 18 and 19; Commission Regulation No 896/2001, Art. 3)

2. Community law – Principles – Protection of legitimate expectations – Limits – Amendment of the legislation on tariff quotas for the importation of bananas – Discretion of the institutions – Adjustment of the legislation to reflect changes in economic circumstances – Not possible to rely on the principle of the protection of legitimate expectations

(Council Regulation No 404/93)

3. Community law – Principles – Fundamental rights – Freedom to pursue a trade or profession – Restrictions – Regulation No 896/2001 on arrangements for importing bananas – Provision excluding from the category of ‘non-traditional operators’ persons related to a traditional operator – Restriction justified by the general interest – Whether permissible

(Council Regulation No 404/93; Commission Regulations No 896/2001, Art. 6(c), and No 2454/93, Art. 143)

1. It follows from the context of the Treaty in which Article 211 EC must be placed and also from practical requirements that the concept of implementation must be given a wide interpretation. In particular in the field of agricultural policy, since only the Commission is in a position to keep track of market trends and to act quickly when necessary, the Council may confer on it wide powers. Consequently, the limits of those powers must be determined by reference to the essential general aims of the organisation of the market in question and 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.

As regards in particular management of tariff quotas for the importation of bananas into the Community, Regulation No 404/93 on the common organisation of the market in bananas, as amended by Regulation No 216/2001, Article 20 of which confers upon the Commission the power to adopt implementing provisions and, inter alia, rules on the management of the tariff quotas referred to in Article 18 of that regulation, does not include a definition of operators eligible for allocation of tariff quotas, thus certainly leaving the Commission broad discretion. Accordingly, a measure adopted by the Commission, which means that a significant share of the allocation of tariff quotas is reserved to economic operators who take on the commercial risk associated with production or purchase from producers and the transport of fresh products, falls within the discretion afforded to that institution for the implementation of the basic regulation, to the extent that it is likely to contribute to the proper functioning of the import arrangements and is not capable of disrupting the equilibrium of supply to the Community market which the basic regulation seeks to ensure.

(see paras 54-57, 59)

2. While the principle of the protection of legitimate expectations is one of the fundamental principles of the Community, traders are not justified in having a legitimate expectation that an existing situation which is capable of being altered by the Community institutions in the exercise of their discretionary power will be maintained, particularly 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.

Accordingly, the businesses affected by the importation of bananas into the Community could not have any reasonable expectation that the applicable rules would be maintained since those rules have not only been amended many times, in particular on account of international commitments given by the Community within the framework of the World Trade Organisation, but require constant adjustment to reflect changes in the economic situation, leaving scope for broad discretion on the part of the Community institutions.

(see paras 70-71)

3. The freedom to pursue a trade or profession, like the right to property, is one of the general principles of Community law. However, those principles are not absolute, but must be viewed in relation to their social function. Consequently, restrictions may be imposed on the exercise of the freedom to pursue a trade or profession, as on the exercise of the right to property, provided that such 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.

That is the case with Article 6(c) of Regulation No 896/2001 laying down detailed rules for applying Regulation No 404/93 as regards the arrangements for importing bananas into the Community, which restricts the freedom to pursue a trade or profession by precluding persons related to a traditional operator in accordance with Article 143 of Regulation No 2454/93 from being included in tariff quotas as a non-traditional operator. That restriction corresponds to an objective of general interest, which is to combat speculative or artificial practices in relation to the issue of import licences, and does not constitute, in relation to that aim, a disproportionate and intolerable interference, impairing the very substance of the right to freedom to pursue a trade or profession.

(see paras 82-85)