Federal Republic of Germany v Council of the European Union.
Date: 1998-03-10
44 In that connection it must be observed, first, that in paragraph 18 of that judgment the Court dismissed the actions for annulment as inadmissible on the ground that the contested provisions formed an integral part of the Act of Accession and did not therefore constitute an act of the Council within the meaning of Article 173 of the Treaty.
52 The Council and the interveners supporting it add that the difference in treatment arising from the exemption of Category B operators from the obligation to obtain costly export licences is objectively justified by the need to restore, between them and Category A and C operators, the competitive balance which Regulation No 404/93 was designed to establish.  They state in that connection that, in Germany v Council, cited above, the Court recognised the legality of certain advantages afforded to Category B operators because of the need to achieve such a balance. However, the increase in the tariff quota and the lowering of the customs duty provided for in the Framework Agreement had the effect of disturbing that balance to the detriment of Category B operators.
56 It must also be borne in mind that there is no general principle of Community law obliging the Community, in its external relations, to accord third countries equal treatment in all respects. Therefore, as the Court held in Case 52/81 Faust v Commission [1982] ECR 3745, paragraph 25, if different treatment of third countries is compatible with Community law, then different treatment accorded to traders within the Community must also be regarded as compatible with Community law where that different treatment is merely an automatic consequence of the different treatment accorded to third countries with which such traders have entered into commercial relations.
57 Here, it is clear that the restrictions on import opportunities which the introduction of country quotas is likely to entail for economic operators in Categories A and C are the automatic consequence of differences in the treatment accorded to third countries, depending on whether or not they are parties to the Framework Agreement and on the size of the quota allocated to them in that agreement.
58 The plea alleging breach of the general principle of non-discrimination must therefore be rejected as unfounded as regards the introduction of country quotas.
62 It is therefore necessary to consider whether that difference in treatment is incompatible with the prohibition laid down in the second subparagraph of Article 40(3) of the Treaty, which is merely a specific enunciation of the general principle of equality, one of the fundamental principles of Community law (see in particular Joined Cases 117/76 and 16/77 Ruckdeschel v Hauptzollamt Hamburg-St Annen [1977] ECR 1753, paragraph 7,  Joined Cases 124/76 and 20/77 Moulins et Huileries de Pont-à-Mousson and Another v Office Interprofessionnel des Céréales [1977] ECR 1795, paragraph 16, Case 125/77 Koninklijke Scholten-Honig v Hoofdproduktschap voor Akkerbouwprodukten [1978] ECR 1991, paragraph 26, and Joined Cases 103/77 and 145/77 Royal Scholten-Honig v Intervention Board for Agricultural Products [1978] ECR 2037, paragraph 26), or whether, on the contrary, it may be objectively justified, as contended by, in particular, the Council and the Commission, by the need to restore the competitive balance between those categories of operators.
63 In that regard, it must be emphasised that, as the Court recognised in Germany v Council, cited above, the common organisation of the market in bananas, as established by Regulation No 404/93, and in particular the system of tariff-quota allocation, involves certain restrictions or differences of treatment detrimental to Category A and C operators, whose opportunities for importing bananas from third countries have thereby been restricted, whereas Category B operators, who had previously been obliged to market essentially Community and ACP bananas, have gained an opportunity to import specified quantities of third-country bananas.
64 The Court held that such a difference in treatment is not contrary to the general principle of non-discrimination in so far as it is inherent in the objective of integrating previously compartmentalised markets, bearing in mind the different situations of the various categories of economic operators before the establishment of the common organisation of the market, and that pursuit of the objective of the common organisation, which is to guarantee disposal of Community production and traditional ACP production, entails the striking of a balance between the various categories of economic operators in question (paragraph 74).
68 Therefore, in order to justify recourse to a measure such as the one at issue in this case, the Council should have demonstrated that the balance disturbed by the increase in the tariff quota and the concomitant lowering of customs duties, which also benefit Category B operators, could be restored only by granting a substantial advantage to that same category of operators and, thus, at the cost of introducing a new difference in treatment detrimental to the other categories of operators who had already, when the tariff quota and the machinery for dividing it up were introduced, been subjected to similar restrictions and differences in treatment.
71 The Council has not, however, provided the Court with sufficient information to explain why the increase in the tariff quota and its division into country quotas, together with the concomitant lowering of customs duties, were not sufficient to offset the limitations which Regulation No 404/93 had imposed on the marketing of bananas from the third countries party to the Framework Agreement and why that objective had therefore to be achieved by the imposition of a financial burden on only some of the economic operators importing bananas from those countries.
74 It must be recalled that the pleas alleging infringement of the right to property, of the freedom to pursue a trade or business, of the principle of the protection of legitimate expectations and of the principle of proportionality were relied on by the applicant in Germany v Council, cited above, in challenging the regime governing trade with third countries established in Title IV of Regulation No 404/93 and in particular the opening of a tariff quota for imports of third-country and non-traditional ACP bananas and the arrangements for dividing that quota up among the Community's Category A, B and C operators.
76 In its judgment in that case, however, the Court held that none of those pleas was well founded.
77 It considered in particular that no economic operator could claim a right to property in a market share which he held before the adoption of that regime (paragraph 79) or an acquired right or a legitimate expectation that a situation existing before that time would be maintained (paragraph 80).  It also held that restrictions on the right to import third-country bananas resulting from the opening of the tariff quota and the machinery for its subdivision were inherent in the objectives of general Community interest pursued by the establishment of a common organisation of the market in the bananas sector and therefore did not improperly impair the freedom of traditional traders in third-country bananas to pursue their trade or business (paragraphs 82 and 87).  Finally, it found that the contested measures did not infringe the principle of proportionality since no evidence had been produced that they were manifestly inappropriate for achieving the objectives pursued (paragraphs 94 and 95).