Léon Van Parys NV v Belgisch Interventie- en Restitutiebureau (BIRB).
Date: 2005-03-01
1. This reference for a preliminary ruling concerns the validity of 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) as amended by Council Regulation (EC) No 1637/98 of 20 July 1998 (OJ 1998 L 210, p. 28), 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 (OJ 1998 L 293, p. 32), Commission Regulation (EC) No 2806/98 of 23 December 1998 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the first quarter of 1999 and on the submission of new applications (OJ 1998 L 349, p. 32), Commission Regulation (EC) No 102/1999 of 15 January 1999 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the first quarter of 1999 (second period) (OJ 1999 L 11, p. 16), Commission Regulation (EC) No 608/1999 of 19 March 1999 on the issuing of import licences for bananas under the tariff quotas and for traditional ACP bananas for the second quarter of 1999 and on the submission of new applications (OJ 1999 L 75, p. 18), in the light of Articles I and XIII of the General Agreement on Tariffs and Trade 1994 (OJ 1994 L 336, p. 103, ‘GATT 1994‘) which appears in Annex 1A of the Agreement establishing the World Trade Organisation (‘WTO’), 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), and of Article 4 of 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, approved on behalf of the Community by Council Decision 98/278/EC of 7 April 1998 (OJ 1998 L 127, p. 10, ‘the framework agreement’).
39. It is settled case-law in that regard that, given their nature and structure, the WTO agreements are not in principle among the rules in the light of which the Court is to review the legality of measures adopted by the Community institutions (Case C-149/96 Portugal  v Council  [1999] ECR I-8395, paragraph 47; order of 2 May 2001 in Case C-307/99 OGT Fruchthandelsgesellschaft  [2001] ECR I-3159, paragraph 24; Joined Cases C-27/00 and C-122/00 Omega Air and Others  [2002] ECR I-2569, paragraph 93; Case C-76/00 P Petrotub and Republica  v Council  [2003] ECR I-79, paragraph 53 and Case C-93/02 P Biret International  v Council  [2003] ECR I-10497, paragraph 52).
40. It is only where the Community has intended to implement a particular obligation assumed in the context of the WTO, or where the Community measure refers expressly to the precise provisions of the WTO agreements, that it is for the Court to review the legality of the Community measure in question in the light of the WTO rules (see, as regards GATT 1947, Case 70/87 Fediol  v Commission  [1989] ECR 1781, paragraphs 19 to 22, and Case C-69/89 Nakajima  v Council  [1991] ECR I-2069, paragraph 31, and, as regards the WTO agreements, Portugal  v Council , paragraph 49, and Biret International  v Council , paragraph 53).
41. In the present case, by undertaking after the adoption of the decision of the DSB of 25 September 1997 to comply with the WTO rules and, in particular, with Articles I(1) and XIII of GATT 1994, the Community did not intend to assume a particular obligation in the context of the WTO, capable of justifying an exception to the impossibility of relying on WTO rules before the Community Courts and enabling the Community Courts to exercise judicial review of the relevant Community provisions in the light of those rules.
42. First, it should be noted that even where there is a decision of the DSB holding that the measures adopted by a member are incompatible with the WTO rules, as the Court has already held, the WTO dispute settlement system nevertheless accords considerable importance to negotiation between the parties ( Portugal  v Council , paragraphs 36 to 40).
43. Thus, although, in the absence of a resolution mutually agreed between the parties and compatible with the agreements in question, the main purpose of the dispute settlement system is in principle, according to Article 3(7) of the understanding, to secure the withdrawal of the measures in question if they are found to be inconsistent with the WTO rules, that provision provides, however, that where the immediate withdrawal of the measures is impracticable, compensation may be granted or the application of concessions or the enforcement of other obligations may be suspended on an interim basis pending the withdrawal of the inconsistent measure (see, to that effect, Portugal  v Council , paragraph 37).
44. It is true that, according to Articles 3(7) and 22(1) of the understanding, compensation and the suspension of concessions or other obligations are temporary measures available in the event that the recommendations and rulings of the DSB are not implemented within a reasonable period of time, the latter of those provisions showing a preference for full implementation of a recommendation to bring a measure into conformity with the WTO agreements in question ( Portugal  v Council , paragraph 38).
45. However, Article 22(2) provides that, if the Member concerned fails to enforce those recommendations and decisions within a reasonable period, if so requested, and within a reasonable period of time, it is to enter into negotiations with any party having invoked the dispute settlement procedures with a view to agreeing compensation. If no satisfactory compensation has been agreed within 20 days after the expiry of the reasonable period, the complainant may request authorisation from the DSB to suspend, in respect of that member, the application of concessions or other obligations under the WTO agreements.
46. Furthermore, Article 22(8) of the understanding provides that the dispute remains on the agenda of the DSB, pursuant to Article 21(6) of the understanding, until it is resolved, that is until the measure found to be inconsistent has been ‘removed’ or the parties reach a ‘mutually satisfactory solution’.
47. Where there is no agreement as to the compatibility of the measures taken to comply with the DSB’s recommendations and decisions, Article 21(5) of the understanding provides that the dispute shall be decided ‘through recourse to these dispute settlement procedures’, including an attempt by the parties to reach a negotiated solution.
48. In those circumstances, to require courts to refrain from applying rules of domestic law which are inconsistent with the WTO agreements would have the consequence of depriving the legislative or executive organs of the contracting parties of the possibility afforded by Article 22 of that memorandum of reaching a negotiated settlement, even on a temporary basis ( Portugal  v Commission , paragraph 40).
49. In the dispute in the main proceedings, it is apparent from the file that:
– after declaring to the DSB its intention to comply with the DSB’s decision of 25 September 1997, the Community amended its system for imports of bananas upon the expiry of the period allocated to it for that purpose;
– as a result of the challenge by the Republic of Ecuador to the compatibility with the WTO rules of the new system of trade with third States arising from Regulation No 1637/98, the matter was referred to an ad hoc pa nel pursuant to Article 21(5) of the understanding and that panel held in a report adopted by the DSB on 6 May 1999 that that system continued to infringe Articles I(1) and XIII of GATT 1994;
– in particular, the United States of America was authorised, in 1999, pursuant to Article 22(2) of the understanding and following an arbitration procedure, to suspend concessions to the Community up to a certain level;
– the Community system was the subject of further amendments introduced by Regulation No 216/2001, applicable with effect from 1 April 2001 pursuant to the second paragraph of Article 2;
– agreements were negotiated with the United States of America on 11 April 2001 and with the Republic of Ecuador on 30 April 2001, with a view to bringing the Community legislation into conformity with the WTO rules.
50. Such an outcome, by which the Community sought to reconcile its obligations under the WTO agreements with those in respect of the ACP States, and with the requirements inherent in the implementation of the common agricultural policy, could be compromised if the Community Courts were entitled to judicially review the lawfulness of the Community measures in question in light of the WTO rules upon the expiry of the time-limit, in January 1999, granted by the DSB within which to implement its decision of 25 September 1997.
51. The expiry of that time-limit does not imply that the Community had exhausted the possibilities under the understanding of finding a solution to the dispute between it and the other parties. In those circumstances, to require the Community Courts, merely on the basis that that time-limit has expired, to review the lawfulness of the Community measures concerned in the light of the WTO rules, could have the effect of undermining the Community’s position in its attempt to reach a mutually acceptable solution to the dispute in conformity with those rules.
52. It follows from the foregoing considerations that Regulation No 1637/98 and the regulations in issue in the main proceedings adopted to apply it, cannot be interpreted as measures intended to ensure the enforcement within the Community legal order of a particular obligation assumed in the context of the WTO. Neither do those measures expressly refer to specific provisions of the WTO agreements.
53. Second, as the Court held in paragraphs 43 and 44 of its judgment in Portugal  v Council , to accept that the Community Courts have the direct responsibility for ensuring that Community law complies with the WTO rules would deprive the Community’s legislative or executive bodies of the discretion which the equivalent bodies of the Community’s commercial partners enjoy. It is not in dispute that some of the contracting parties, which are amongst the most important commercial partners of the Community, have concluded from the subject-matter and purpose of the WTO agreements that they are not among the rules applicable by their courts when reviewing the legality of their rules of domestic law. Such lack of reciprocity, if admitted, would risk introducing an anomaly in the application of the WTO rules.
54. It follows from all of the foregoing that an operator, in circumstances such as those in the main proceedings, cannot plead before a court of a Member State that Community legislation is incompatible with certain WTO rules, even if the DSB has stated that that legislation is incompatible with those rules.
The second question
57. As the Commission rightly points out, Article 4 of the framework agreement was added to the framework agreement at a time when the Member States of the Andean Pact were not yet members of the WTO, and that amendment did not alter the scope or nature of the obligations imposed by GATT 1994.
58. In those circumstances, the reasoning set out in reply to the first question as to whether or not the WTO rules may be relied upon before a court of a Member State applies equally to the interpretation of Article 4 of the framework agreement.