Biret is a French company, trading in foodstuffs, in particular meat.
Two Community directives in 1981 and 1988 prohibited the import into the Community
of meat and meat products treated with particular hormones. On 1 January 1995 the
Agreement Establishing the World Trade Organisation and, inter alia, the Agreement on the
Application of Sanitary and Phytosanitary Measures ("SPS Agreement") and the Understanding on Rules
and Procedures Governing the Settlement of Disputes by the WTO Dispute Settlement Body
("DSB") entered into force for the EU.
In April 1996 the Council adopted a new EC directive which maintained the
abovementioned import ban and extended it to one other hormone. On 13 February
1998 the DSB declared the rules in that directive to be incompatible with
the SPS Agreement. The Community was given until 13 May 1999 within which
to implement the binding recommendations of the DSB. For that purpose, the Council
has before it the Commission's proposal of 24 May 2000 to amend the
1996 directive, but it has not yet been adopted.
In June 2000 Biret brought an action against the Council of the EU
before the Court of First Instance of the EC, seeking compensation for damage
suffered as a result of the ban on the import into the EC
of beef treated with certain hormones.
The Court of First Instance dismissed the application for damages and referred to
the case-law of the Court of Justice, according to which the WTO Agreement
and its annexes are part of Community law, but in view of their
nature and structure they do not in principle form part of the rules
by which the Court of Justice reviews the legality of acts adopted by
the Community institutions; the WTO rules did not create any rights for individuals
on which they could rely before the Court of First Instance. There is
an exception to that principle only where the Community implements a specific obligation
assumed in the context of the WTO or where the Community measure refers
expressly to the precise provisions of the WTO Agreements. According to the Court
of First Instance, neither of those alternatives applied in the present case.
Biret appealed to the Court of Justice of the EC.
Advocate General Alber has delivered his Opinion in the case today.
|
The Advocate General's view is not binding on the Court of Justice. His task is to propose to the Court, in complete independence, a legal solution to the cases before him. |
The Advocate General observes that after the issue of the DSB recommendations of
February 1998 it was still necessary to adopt a Community measure in order
to implement them. He goes on to consider whether, exceptionally, Biret should nevertheless
be able to rely on the DSB recommendation and therefore directly on WTO
law because the period for implementing the recommendations has long since expired. The
implementation period expired in May 1999. Although the Commission has submitted a proposal
to amend Community law in June 2000, the legislative procedure is still not
complete, so that since May 1999 there has been no change either in
the situation under WTO law or under Community law. It must therefore be
asked whether Biret must accept the situation without compensation or whether, in such
circumstances, it should be possible to rely on a DSB recommendation which made
a binding finding of the illegality of Community law, with the result that
WTO law is to be regarded as directly applicable, opening the way for
a possible damages claim by Biret.
The Advocate General states that this should be the case.
He observes that a feature of the WTO dispute resolution mechanism is )
unlike under the GATT ) that once a DSB decision or recommendation has
been made, it must be unconditionally implemented. The parties can then no longer
reach a settlement or agree on an exception from their obligations. They can
only discuss the period within which the DSB award is to be implemented.
In the present case this was fixed at 15 months and expired in
May 1999.
According to the Advocate General, the recognition of a damages claim does not
restrict the freedom of action of the Community's legislative and executive organs. After
the issue of a DSB recommendation or decision, the WTO contracting parties no
longer have any room for manoeuvre regarding the question whether they implement the
recommendation or decision. They cannot escape their WTO obligations by negotiating a waiver.
How the Community establishes the conformity of its measures with its obligations under
the SPS Agreement is and remains a matter for the competent Community bodies.
On the basis of new scientific discoveries, they may quite possibly re-establish an
import ban, this time in conformity with the SPS Agreement. The recognition of
direct applicability does not found a right of the individual to demand a
particular course of action, such as the lifting of the import ban, but
merely a right to monetary compensation.
In the Advocate General's view, the recognition of a damages claim in such
cases is in line with the case-law on failure to fulfil obligations and
the liability of the Member States for non-implementation of Community law (Case C-6/90
Francovich, judgment of 19 November 1991).
In addition he states that there is a fundamental right to freedom of
economic activity and that it is unfair to deny a citizen a damages
claim where the Community legislature, through its inaction, has continued to maintain a
state of affairs contrary to WTO law for a period of four years
after the expiry of the period allowed for implementation of the DSB recommendation,
and thereby further unlawfully restricted the fundamental rights of the citizen.
The Advocate General concludes that WTO law is directly applicable where the incompatibility
of a Community measure with WTO law has been found in DSB recommendations
or decisions and the Community has failed to implement the recommendations or decisions
within the reasonable period of time allowed by the WTO.
In addition, the Advocate General examines whether the purpose of the WTO rules
is to protect the individual. He emphasises that in States organised on market
economy principles trade is primarily conducted by private individuals and, consequently, restrictions of
trade have an effect on the scope of their freedom of economic activity.
It is clear from the case-law of the Court that the fact that
a legal rule is for the protection of general interests (here: liberalisation of
world trade) does not rule out the possibility that it is also for
the protection of individuals. This is the case here.
The Council has therefore infringed a rule of Community law, on which an
individual may rely.
The Advocate General proposes that the Court should set aside the judgment of
the Court of First Instance and refer the dispute back to it so
that it can examine the additional requirements for a damages claim (loss and
causality).
|
This press release is available in all official languages. For the full text of the Opinion, please consult our internet page www.curia.eu.int at approximately 3 pm today. For further information please contact Mr Chris Fretwell Tel: (00 352) 4303 3355; Fax: (00 352) 4303 2731. |