Judgment of the Court of First Instance (Grand Chamber) of 14 December 2005.
Beamglow Ltd v European Parliament, Council of the European Union and Commission of the European Communities.
Non-contractual liability of the Community - Incompatibility of the Community regime governing the import of bananas with the rules of the World Trade Organisation (WTO) - Imposition by the United States of America of retaliatory measures in the form of increased customs duty levied on imports from the Community, pursuant to a WTO authorisation - Decision of the WTO Dispute Settlement Body - Legal effects - Community liability in the absence of unlawful conduct of its institutions - Causal link - Unusual and special damage.
Case T-383/00. (2005)
Language: English

In negotiations with all the interested parties, the Community proposed amendments to the new COM for bananas. Those amendments were enacted in Council Regulation (EC) No 216/2001 of 29 January 2001 amending Regulation No 404/93 (OJ 2001 L 31, p. 2).
The preamble to Regulation No 216/2001 states:
‘(1) There have been numerous close contacts with supplier countries and other interested parties to settle the disputes arising from the import regime established by Regulation … No 404/93 and to take account of the conclusions of the [panel] set up under the dispute settlement system of the [WTO].
(2) Analysis of all the options presented by the Commission suggests that establishment in the medium term of an import system founded on the application of a customs duty at an appropriate rate and application of a preferential tariff to imports from ACP countries provides the best guarantees, firstly of achieving the objectives of the common organisation of the market as regards Community production and consumer demand, secondly of complying with the rules on international trade, and thirdly of preventing further disputes.
(3) However, such a system must be introduced upon completion of negotiations with the Community’s partners in accordance with WTO procedures, in particular Article XXVIII of the [GATT]. The result of these negotiations must be submitted for approval to the Council which must also, in accordance with the provisions of the Treaty, establish the applicable level of the Common Customs Tariffs.
(4) Until the entry into force of that regime, the Community should be supplied under several tariff quotas open to imports from all origins and managed in line with the recommendations made by the [DSB].
(5) In view of the contractual obligations towards the ACP countries and the need to guarantee them proper conditions of competition, application to imports of bananas originating in those countries of a tariff preference of EUR 300 per tonne would allow the trade flows in question to be maintained. This will entail in particular the application to such imports of zero duty under the … tariff quotas.
(6) The Commission should be authorised to open negotiations with supplier countries having a substantial interest in supplying the Community market to endeavour to achieve a negotiated allocation of the first two tariff quotas. …’
On 11 April 2001 the United States of America and the Community concluded a memorandum of understanding identifying ‘the means by which the long-standing dispute over the EC’s banana import regime can be resolved’. That memorandum provided that the Community undertook to ‘introduce a tariff-only regime for imports of bananas no later than 1 January 2006’. The memorandum defined the measures which the Community undertook to take during the interim period expiring on 1 January 2006. In return, the United States of America undertook to suspend provisionally the imposition of the increased customs duty which they were authorised to levy on Community imports. The United States of America stated, however, by a communication to the DSB of 26 June 2001, that that memorandum of understanding ‘[did] not in itself constitute a mutually agreed solution pursuant to Article 3(6) of the DSU [and that], in view of the steps yet to be taken by all parties, it would also be premature to take this item off the DSB agenda’. 

Legal relationship diagram (Graphviz):
digraph {
    rankdir=LR;
    node [shape=box];
    
   "USA"[shape=doubleoctagon];
   "DSB"[shape=doubleoctagon];
   "Council Regulation (EC) No 216/2001 29/01/2001"[shape=trapezium];
   "The Community"[shape=doubleoctagon];
    
   "The Community"->"Council Regulation (EC) No 216/2001 29/01/2001";
   "Council Regulation (EC) No 216/2001 29/01/2001"->"Amending Regulation No 404/93"[dir=none];
   "The Community"->"Conclude a memorandum 11/04/2001"[dir=none];
   "Conclude a memorandum 11/04/2001"->"USA"[dir=none];
   "Conclude a memorandum 11/04/2001"->"-The Community undertook to ‘introduce a tariff-only regime for imports of bananas no later than 1 January 2006’. -The United States of America undertook to suspend provisionally the imposition of the increased customs duty which they were authorised to levy on Community imports."[dir=none];
   "USA"->"Communication 26/06/2001";
   "Communication 26/06/2001"->"DSB";
   "Communication 26/06/2001"->"Memorandum of understanding ‘[did] not in itself constitute a mutually agreed solution pursuant to Article 3(6) of the DSU"[dir=none];
}