1. 

The Corte Suprema di Cassazione (Supreme Court of Cassation, Italy) (‘the referring court’) seeks guidance on the meaning of Regulation No 2362/98 ( 2 ) on the importation of bananas and Regulation No 2988/95 ( 3 ) regarding the protection of the European Union’s financial interests in the context of proceedings involving a set of newcomers ( 4 ) in the banana trade. Between May 1999 and December 2000, those traders imported third State bananas at a preferential duty rate and then immediately sold them again, through another newcomer, to a traditional operator ( 5 ) — having initially bought them from the same traditional operator, through the same newcomer, prior to importation. This series of transactions enabled that traditional operator to sell on the European market bananas which it had previously sold on the international market and which were imported at preferential duty rates. The referring court in essence asks what, pursuant to Regulation No 2362/98, constituted a ‘newcomer’ and whether such a series of transactions was contrary to the prohibition in that regulation on the transfer of rights arising under import licences from newcomers to traditional operators. If the transactions were prohibited, the referring court asks what the consequences were under Regulation No 2988/95.

2.

In accordance with Article 325(1) TFEU, ‘[t]he Union and the Member States shall counter fraud and any other illegal activities affecting the financial interests of the Union’. Pursuant to Article 325(2), ‘Member States shall take the same measures to counter fraud affecting the financial interests of the Union as they take to counter fraud affecting their own financial interests’.

3.

Regulation No 404/93 established a common organisation of the market in bananas ( 6 ) and covered the products described in Article 1(2) on the basis of codes of the Combined Nomenclature (‘CN’). ( 7 )

4.

The 10th recital in the preamble to Regulation No 404/93 stated that provision had to be made for the annual opening of a tariff quota and that imports of non-traditional bananas ( 8 ) from the African, Caribbean and Pacific States (‘ACP States’) were to be subject to zero duty in accordance with the Lomé Convention Agreements.

5.

The 13th recital stated that, in administering the tariff quota, a distinction needed to be made ‘between, on the one hand, operators who have previously marketed third country bananas and non-traditional ACP bananas and, on the other, operators who have previously marketed bananas produced in the Community while leaving a quantity available for new operators who have recently embarked on commercial activity or are about to embark on commercial activity in this sector’.

6.

Title IV concerned ‘Trade with third countries’. In accordance with Article 15(1), the duty rates in the Common Customs Tariff (‘CCT’) applied to the products listed in Article 1(2) unless Regulation No 404/93 provided otherwise. For the purposes of Title IV, ‘traditional imports from ACP States’ or ‘traditional ACP bananas’ were ‘imports into the Community of bananas originating in the States listed in the Annex hereto up to a limit of 857700 tonnes (net weight) per year’ (Article 16(1)); ‘non-traditional imports from ACP States’ or ‘non-traditional ACP bananas’ were ‘imports into the Community of bananas originating in ACP States but not covered by [the definition of traditional ACP bananas]’ (Article 16(2)); and ‘imports from non-ACP third States’ or ‘third State bananas’ were ‘bananas imported into the Community originating in third States other than the ACP States’ (Article 16(3)).

7.

Pursuant to Article 17, import licences (valid throughout the Community) were needed for all importation of bananas into the Community. In principle, the issue of such licences was subject to the lodging of a security against a commitment to import on the terms of Regulation No 404/93 during the period of the licence’s validity.

8.

Article 18(1) provided for the opening of an annual tariff quota of 2200000 tonnes (net weight) for imports of third State and non-traditional ACP bananas. Under the tariff quota, imports of third State bananas were to be subject to the preferential duty of EUR 75 per tonne and imports of non-traditional ACP bananas were to be free of duty. Article 18(2) provided for an additional tariff quota to be opened for the same types of bananas. In accordance with Article 18(3), no duty was to be payable on imports of traditional ACP bananas. Article 18(5) further stated that non-traditional ACP bananas imported outside these tariff quotas were to be subject to a duty per tonne equal to the normal duty indicated in Article 15 less EUR 200.

9.

From May 1999 to December 2000 (the period during which the events giving rise to this reference took place), the relevant general duty rate for bananas was more than 10 times higher than the more preferential rate for imports under the tariff quota. ( 9 )

10.

Regulation No 2362/98 implemented Regulation No 404/93. It laid down rules for applying the arrangements for importing bananas under the tariff quotas (under Article 18(1) and (2) of Regulation No 404/93) and traditional ACP bananas (under Article 16 of Regulation No 404/93) and for the arrangements outside those quotas. ( 10 )

11.

Recital 5 stated that ‘traditional operators’ and ‘newcomers’ should be defined using single criteria and without any distinction based on the third State or ACP State from which they were importing.

12.

According to recital 6, a share of the tariff quotas and traditional ACP bananas had to be reserved for newcomers, and that overall allocation had to be sufficient to allow operators to participate in the import trade and encourage healthy competition.

13.

Recital 8 read as follows:

‘… experience from several years of applying the Community banana import arrangements indicates the need to tighten the eligibility criteria for new operators so as to avoid the registration of purely fictitious agents and the grant of allocations in response to artificial or speculative applications; … in particular, it is justifiable to demand a minimum of experience in importing comparable products — fresh products falling within Chapters 7, 8 and, under certain conditions, 9 of the [CN]; … also, to avoid applications for annual allocations which bear little relation to operators’ actual capacities and which will not lead to applications for import licences for the corresponding quantities, submission of an application for an annual allocation should be subject to the requirement that a security in lieu of the import licence security be lodged; … that security should be released without delay in stages as operators actually use up their annual allocations; … for the same purpose, the grant of an annual allocation in subsequent years should be made subject to a minimum rate of use of the previous annual allocation; … lastly, the conditions under which “newcomers” can gain access to the “traditional operators” group should be determined.’

14.

Recital 14 stated that ‘a transfer restricted to a single transferee per licence or certificate or extract therefrom will allow trade relations to develop between the various registered operators’. However, ‘artificial trade, speculation or disturbance of normal trade should not be encouraged by permitting transfers from “newcomers” in favour of “traditional operators”’.

15.

According to recital 18, verifications and checks by the competent national authorities could, if necessary, lead to corrections of operators’ reference quantities or annual allocations; neither reference quantities nor annual allocations were to be regarded as vested rights or pleaded by operators as legitimate expectations.

16.

Article 2(1) divided up the tariff quotas (and traditional ACP quantities): 92% of quotas were to be made available to traditional operators and the remaining 8% to newcomers.

17.

The first paragraph of Article 3 defined ‘traditional operators’ as ‘economic agents established in the European Community during the period for determining their reference quantities, and also at the time of their registration under Article 5 …, [ ( 11 )] who have actually imported a minimum quantity of third-country and/or ACP-country bananas on their own account for subsequent marketing in the Community during a set reference period’. ( 12 ) In accordance with Article 4(1), such operators were to receive a single reference quantity based on the quantities of bananas actually imported during the reference period.

18.

Article 7 defined ‘newcomers’ as:

‘economic agents established in the European Community who, at the time of registration:

19.

Article 8(1) listed the documents to file for registering as a newcomer:

20.

Renewal of registration required that, in accordance with Article 8(4), operators ‘provide the competent authorities with proof that they have actually imported on their own account at least 50% of the quantity allocated to them for the current year’.

21.

In accordance with Article 9(1), the operators concerned were to request their annual quota allocation at the time of (renewal of) registration.

22.

Pursuant to Article 10, newcomers could become traditional operators after three years of commercial activity following the date of first registration provided that they registered in accordance with Article 5 (which set out the registration process for traditional operators) and satisfied the conditions in Article 3.

23.

Article 11(1) stated: ( 14 )

‘The Member States shall be responsible for ensuring compliance with this Section [on newcomers].

In particular, they shall check that the operators concerned are commercially active for their own account as importers into the Community in the sector referred to in Article 7 and as independent economic units in terms of management, staffing and operations. Where there are grounds for suspecting that these conditions are not met, applications for registration and requests for annual allocations shall be accepted only subject to the operator’s providing evidence of compliance which is considered satisfactory by the national competent authorities.’

24.

Article 13(2) provided that:

‘Where fraudulent manipulations are undertaken or fraudulent documentation is supplied with a view to obtaining an unwarranted registration, reference quantity or, where relevant, annual allocation, such registration, reference quantity or allocation shall be cancelled, without prejudice to the application of any relevant national laws.

In addition, in such cases the operator shall be prohibited from applying for a new registration in any Member State during the two years following the year in which the irregularity is detected.’

25.

Pursuant to Article 20(1), ‘[u]nused quantities covered by licences shall be re-allocated on application to the same operators, be they holders or transferees, for use in a subsequent quarter of the same year as that in which the original licences were issued’ and ‘[t]he securities for the original licences shall be forfeit in proportion to the quantities not used up’.

26.

Article 21(1) provided for the transfer of import licences to a single transferee operator on the terms and conditions laid down in Article 9 of Regulation No 3719/88. ( 15 ) Article 21(2) stated that rights might be transferred: between traditional operators registered under Article 5; from traditional operators to newcomer operators registered under Article 8; and between newcomer operators. However, the transfer of rights from newcomers to traditional operators was not permitted.

27.

Article 4 of Regulation No 2913/92 ( 16 ) defines a ‘customs debt’ as ‘the obligation on a person to pay the amount of the import duties (customs debt on importation) … which apply to specific goods under the Community provisions in force’. In accordance with Article 201(1)(a), a customs debt on importation is incurred through ‘the release for free circulation of goods liable to import duties’ and, as stated in Article 201(2), coincides with the time of acceptance of the customs declaration. Article 201(3) provides that the debtor is in principle the declarant. Depending on precisely how the customs debt is incurred, other persons might also be debtors.

28.

Where several persons are liable for payment of the same customs debt, Article 213 states that they shall be jointly and severally liable for such debt.

29.

Articles 217 to 232 set out the rules on recovery of a customs debt.

30.

Regulation No 3719/88 consolidated rules on applying the system of import and export licences and advance fixing certificates for agricultural products. ( 17 ) The fifth recital in its preamble described the objective of import and export licences as being ‘the sound administration of the market organisation’. According to the 12th recital, import licences were sometimes used ‘to administer quantitative import arrangements’ and, in that event, ‘the production of evidence of the use of the licences is not required merely in the interest of sound administration but becomes an essential component of the administration of the quantitative arrangements’.

31.

Article 9(1) provided: ‘… Rights deriving from licences or certificates shall be transferable by the titular holder of the licence or certificate during the period of its validity … [Such a transfer] shall relate to quantities not yet attributed to the licence or certificate or extract therefrom’. According to Article 9(4), ‘[t]he transferee may neither further transfer his rights nor transfer them back to the titular holder.’

32.

The fifth recital in the preamble to Regulation No 2988/95 states that: ‘… irregular conduct, and the administrative measures and penalties relating thereto, are provided for in sectoral rules in accordance with this Regulation’.

33.

Article 1(2) defines an ‘irregularity’ as ‘any infringement of a provision of Community law resulting from an act or omission by an economic operator, which has, or would have, the effect of prejudicing the general budget of the Communities or budgets managed by them, either by reducing or losing revenue accruing from own resources collected directly on behalf of the Communities, or by an unjustified item of expenditure’.

34.

Pursuant to Article 2(2), ‘[n]o administrative penalty may be imposed unless a Community act prior to the irregularity has made provision for it’.

35.

According to Article 4:

‘1.   As a general rule, any irregularity shall involve withdrawal of the wrongly obtained advantage:

2.   Application of the measures referred to in paragraph 1 shall be limited to the withdrawal of the advantage obtained plus, where so provided for, interest which may be determined on a flat-rate basis.

3.   Acts which are established to have as their purpose the obtaining of an advantage contrary to the objectives of the Community law applicable in the case by artificially creating the conditions required for obtaining that advantage shall result, as the case shall be, either in failure to obtain the advantage or in its withdrawal.

4.   The measures provided for in this Article shall not be regarded as penalties.’

36.

The referring court explains that, under Italian law, any person evading payment of customs duties otherwise due for importation of goods is in principle punishable by a fine of between 2 and 10 times the amount of the duty at issue. Unlawfully obtaining the benefit of paying a lower tariff duty as a result of a prohibited transfer of import licences from a newcomer to a traditional operator constitutes the crime of smuggling.

37.

S.I.M.B.A. SpA (‘S.I.M.B.A.’), a company represented by Mr and Mrs Orsero, was an Italian traditional importer and wholesale distributor of bananas. It held licences for importing bananas under the tariff quota reserved for this type of importer.

38.

Rico Italia srl (‘Rico’), a company represented by Mr Misturelli, was also an Italian importer of bananas and, as a newcomer, held licences for importing bananas under the tariff quota.

39.

A separate group of Italian importers in the fresh fruit and vegetables sector, which were registered newcomers, are also parties. This group included companies represented by, respectively, Mr Lorenzon, Mrs Palombini and Mr Surian. I shall describe those companies (other than Rico) as ‘the Italian newcomers’.

40.

It was confirmed at the hearing that S.I.M.B.A., Rico and the Italian newcomers were not part of the same company.

41.

S.I.M.B.A. bought bananas in third countries and sold them to Rico, which then sold the bananas to the Italian newcomers at the purchase price charged by S.I.M.B.A. Next, those newcomers imported the bananas, using AGRIM import licences issued by the Italian Ministry of Foreign Trade and cleared customs paying the preferential duty rate. S.I.M.B.A. informed Rico of each of the import and marketing transactions to be carried out, including the quantity, quality and price of the bananas to be imported. Rico guaranteed to S.I.M.B.A. that the Italian newcomers would obtain AGRIM import licences. It also took care of administrative formalities and paid insurance costs.

42.

After importation, the newcomers sold the bananas to Rico, which then systematically sold them to S.I.M.B.A. at a price which was fixed and paid in advance. The price paid by Rico covered the cost of using the AGRIM import licences. S.I.M.B.A. then transported the bananas to warehouses and subsequently placed them on the market. S.I.M.B.A. itself was linked by a contract with Del Monte which paid it a commission once the bananas were sold by S.I.M.B.A. on the European market.

43.

By judgment of 21 December 2005, the Tribunale di Verona (District Court, Verona) convicted Rico’s representative of smuggling and making false statements. He was ordered to pay compensation, the amount of which was to be settled through civil proceedings. The Tribunale di Verona none the less decided that he had to pay EUR 300000 on a provisional basis to the Ministero dell’Economia e delle Finanze (Ministry of the Economy and Finance) and the Agenzia delle Dogane (Customs Agency) but not to the Commission, together with the costs of these three parties which had intervened in the criminal proceedings in order to claim compensation for the damage suffered (‘the civil parties’). S.I.M.B.A.’s representatives and the newcomers’ representatives were acquitted.

44.

Rico’s representative and the civil parties appealed against the judgment of the Tribunale di Verona to the Corte d’appello di Venezia (Court of Appeal, Venice). The latter decided on 24 November 2011 that the proceedings against one of S.I.M.B.A.’s representatives had ended due to his death. It decided that the criminal charges against Rico’s representative had become prescribed but confirmed his civil liability.

45.

The civil parties appealed against the judgment of the Corte d’appello di Venezia to the referring court which has explained in its reference that it must determine whether the bananas should have been imported subject to the full duty rate or the preferential duty rate.

46.

In explaining why a preliminary reference is necessary, the referring court emphasises the following facts which it states were found by the Corte d’appello di Venezia and advanced in observations filed before it: (i) the Italian newcomers owned no infrastructure for storing and transporting bananas; (ii) they acquired the bananas for the sole purposes of clearing them at a reduced duty rate and then selling them back to Rico at an agreed price; (iii) S.I.M.B.A., not the Italian newcomers, bore the entire risk of losing the guarantee; (iv) the import duty which the Italian newcomers were due to pay was already factored into the price agreed in advance (between Rico and the Italian newcomers); (v) the prices of buying and selling the bananas were agreed and thus there was no risk on those prices (or opportunity to benefit from price fluctuations); and (vi) Del Monte paid a commission to S.I.M.BA., not to the Italian newcomers.

47.

The referring court has suspended the proceedings before it and seeks guidance from the Court on the following questions:

48.

Written observations were filed by Mr Lorenzon, Mrs Orsero, Mrs Palombini, Mr Surian, the Italian Government and the Commission. At the hearing on 12 November 2014, the same parties, except for Mr Lorenzon, submitted oral argument.

49.

It is not contested that agreements existed between S.I.M.B.A. and Rico, on the one hand, and between Rico and the Italian newcomers, on the other hand. It is also accepted that bananas entered the European market through a chain of transactions between these operators.

50.

As I see it, all the questions referred concern whether, as a matter of EU law, there was anything irregular about this chain of transactions and, if so, what consequences result.

51.

Question 1 is in essence about the conditions for maintaining newcomer status. As I understand the question, the referring court appears to assume that a newcomer ‘formally’ satisfied those conditions. However, if the newcomer had to carry out import activities of bananas for its own account, then the fact that the newcomer imported bananas on behalf of a traditional operator might seem to be the very basis for concluding that those conditions were not satisfied. I shall first consider whether that condition also applied to importation of bananas subsequent to registration. That is necessary because Articles 7 and 11 of Regulation No 2362/98 appear to set out conditions applicable prior to and at the time of registration and primarily concern importation of products other than bananas. If the condition was applicable subsequent to registration, its meaning must then be explored.

52.

Question 2 is about whether Regulation No 2362/98 precluded the application of the preferential duty rate under the tariff quota where newcomers bought third State bananas, through another newcomer, from a traditional operator, then imported them into the Union under the tariff quota, only to sell the bananas back to the same traditional operator through the same newcomer, so that the traditional operator could then sell them on the European market. Question 3 refers to the scheme described in Question 2 and asks whether it infringes Article 21(2) of Regulation No 2362/98 which prohibits the transfer of rights under import licences from newcomers to traditional operators. As I see it, these two questions, which partly overlap, are relevant only if the newcomers were properly registered and maintained that status. I shall therefore start from that assumption in answering both questions.

53.

By Question 3, the referring court also seeks guidance on the consequences under Article 4(3) of Regulation No 2988/95 of an infringement of Article 21(2) of Regulation No 2362/98.

54.

Finally, the fact that the Commission appeared as a civil party before the Italian courts does not (as the Commission itself rightly observes) preclude it as an institution from filing written observations pursuant to the second paragraph of Article 23 of the Statute of the Court of Justice of the European Union, which provides for the right of, inter alia, the parties and the Commission to file statements of case or written observations in cases where the Court is asked to give a preliminary ruling. The Commission’s interventions in both fora must be in conformity with its task under Article 17(1) TEU to ‘promote the general interest of the Union’ and ‘ensure the application of the Treaties, and of measures adopted by the institutions pursuant to [the Treaties]’.

55.

In their written observations and at the hearing, the Italian newcomers intervening in this case have stressed that the facts on which the referring court based its questions ( 18 ) do not correspond with the factual findings made at first instance and on appeal. It follows, according to them, that the questions referred are inadmissible.

56.

It is not for the Court to ascertain and assess the facts which have given rise to the dispute. That task is the prerogative of national courts ( 19 ) and their jurisdiction in that regard is a matter of national law. Moreover, there is a presumption that a national court’s questions of interpretation are relevant in the factual and legislative context which it has defined. The Court may refuse to give a preliminary ruling only where it is quite obvious that the questions posed bear no relation to the actual facts of the main action or to its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions. ( 20 )

57.

In the present case, the questions referred are clearly relevant in the factual context described by the referring court. I therefore consider them to be admissible.

58.

The referring court’s concerns regarding the status of the Italian newcomers appear to relate to facts surrounding, on the one hand, the manner in which initial registration was obtained, and, on the other hand, the importation of bananas subsequent to registration and receipt of an annual allocation and import licences.

59.

It does not appear contested that the Italian newcomers satisfied the conditions in Article 7 of Regulation No 2362/98 which — including the requirement that they had been engaged independently and on their own account in the commercial activity of importing fresh fruit and vegetables (in principle, other than bananas) ( 21 ) — in essence related to import activity in the past or at the time of registration.

60.

In so far as Rico was involved in obtaining registration for the Italian newcomers, I do not consider that involvement of one operator in preparing the application for registration of another operator is, as such, contrary to Article 7(a) or otherwise precluded under Regulation No 2362/98. Nor does that automatically constitute fraudulent conduct within the meaning of Article 13(2) of that regulation. As I see it, the operator’s actions and documentation were to be considered fraudulent if they were aimed at, or had the effect of, concealing facts relevant to the decision on newcomer status and if an assessment based on the concealed facts would not have resulted in the grant of that status. Thus, Article 13(2) was in essence about the good faith of the operator and the accuracy of the evidence submitted during the registration process with a view to satisfying the substantive criteria for obtaining registered status. In so far as there was a separate condition (which I address next) that registered newcomers had to import bananas on their own account, I consider that registration could also be refused where it was established that an operator applied for registration but would not satisfy that condition. As I see it, if that fact was intentionally concealed, Article 13(2) would be triggered.

61.

Concerns about the relations between the Italian newcomers, Rico and S.I.M.B.A. mostly arise regarding a chain of operations through which bananas were imported by the registered Italian newcomers: operations which took place subsequent to the Italian newcomers’ registration.

62.

Did Regulation No 2362/98 require registered newcomers to engage on their own account in the commercial activity of importing bananas to which their newcomer status entitled them? The premiss of Question 1 appears to be that it did.

63.

Regulation No 2362/98 did not contain any express provision — similar to Article 7 on obtaining newcomer status — setting out conditions that had to be satisfied in order to maintain newcomer status. However, it did impose requirements for renewal of registration and obtaining traditional operator status.

64.

Thus, Article 8(4) provided that renewal of newcomer status depended on whether registered newcomers had actually imported on their own account at least 50% of the quantity of bananas allocated to them for the relevant year. That requirement did not mean, as I see it, that they could import up to 49.9% of the quantity for the account of another operator. Rather, it was a condition that required a minimum use of the annual allocation in order to ensure that properly registered newcomers in fact participated in the banana import trade and thereby made that market more competitive.

65.

The fact that an individual importer might not import the full quantities covered by import licences (and guaranteed by a security) did not necessarily affect that newcomer’s status. He might simply have chosen to bear the financial consequences, notably the loss of (part of) the security. ( 22 ) Or, for example, he might have opted to renounce (Article 20) or to transfer to other newcomers (Article 21) some or all of the rights relating to part of his allocated quantity. In the event of a transfer, the transferee then became authorised to import (for his own account).

66.

Moreover, Article 21(2) precluded newcomers from transferring any part of their rights (whether or not they satisfied the minimum use condition in Article 8(4)) to traditional operators because that might encourage artificial trade, speculation or disturbance of normal trade ( 23 ) and undermine the entire purpose of reserving part of the available quantity for newcomers. Article 21(2) therefore appeared to confirm that, where they used their rights themselves, newcomers always had to act on their own account. It would have made no sense to prohibit a transfer of rights from a newcomer to a traditional operator but permit newcomers, who had to be acting independently and on their own account as regards past imports of comparable products in order to obtain newcomer status, to import bananas for the account of a traditional operator. The result would have been that traditional operators could have used registered newcomers to import bananas on their account and under their instructions, rendering the newcomers’ activity as importers mostly artificial and entirely undermining the prohibition in Article 21(2). That is exactly the type of outcome that Regulation No 2362/98 was intended to prevent.

67.

Regulation No 2362/98 in essence distributed shares of available quantities of tariff quotas and traditional ACP bananas between traditional operators and new operators ( 24 ) and set out rules as to who could register to obtain and take advantage of such shares. In regulating the banana import market in this manner, Regulation No 2362/98 aimed to reduce the risk of a traditional operator controlling the market or consolidating its position so as to limit or exclude competition from other operators, including those which had not previously imported ACP or third State bananas. It ensured that new operators in the banana industry, and specifically in the import market, were offered a fair opportunity by reserving part of the tariff quota specifically for them. As more newcomers entered the import market and some of them eventually became traditional operators, the market would become more competitive. As the 14th recital in the preamble to Regulation No 404/93 explained, the system of issuing import licences sought to ensure that existing commercial links were not disrupted, while allowing marketing structures to develop.

68.

In the context of Regulation No 896/2001 ( 25 ) (which repealed and replaced inter alia Regulation No 2362/98 ( 26 )), the Court appears to have accepted that the objective of combating speculative or artificial practices in issuing import licences precluded a traditional operator who already had a tariff quota from being included again in the same tariff quota as a non-traditional operator through the intermediary of another operator to which it was related. ( 27 ) Action to counteract such practices was found to be ‘capable of providing a means for genuine new operators to act on the market and therefore to deploy their economic activities fully’. ( 28 ) The same reasoning applied also to the predecessor of that regulation.

69.

Moreover, under Regulation No 2362/98 traditional operators needed actually to have imported a minimum quantity of bananas on their own account for subsequent marketing during a set reference period. ( 29 ) That condition also applied to newcomers that became traditional operators. ( 30 )

70.

It follows that, pursuant to Regulation No 2362/98, operators had to act on their own account both to gain access to, and to stay in, the group of ‘newcomers’.

71.

If that was the case, Member States were also responsible, pursuant to Article 11, for ensuring compliance with that condition. Here, I note that the first sentence of Article 11(1) was drafted sufficiently widely to encompass the conditions both for obtaining and for maintaining newcomer status.

72.

Thus, when newcomers imported, they needed to act for their own purposes and at their own commercial risk. Apart from the fact that they needed to exist as economic agents, ( 31 ) their acts of importation — that is, the act of bringing goods into the customs territory of the Union ( 32 ) — needed to have, from their perspective, a commercial meaning: to be the result of their independent decision, whose benefits and costs would inure to them, not to some other party. That interpretation also finds support in Regulation No 404/93 (implemented by Regulation No 2362/98), which set out the principle that licences were to be granted to operators who had undertaken the commercial risk of marketing bananas. ( 33 )

73.

In assessing whether a particular import activity was undertaken without commercial risk and entirely for the (commercial) benefit of a third party, I consider that a national court should at least compare the sale prices (here, paid and charged by the Italian newcomers and by Rico) and examine, in particular, whether the difference exceeded the total of the costs incurred by the newcomer in importing the bananas (including customs duty, security, insurance and administrative costs), thus allowing for a profit margin. However, apparent lack of commercial profit is not necessarily sufficient to conclude that the newcomer cannot have acted on its own account (importation at a loss may, unless proven otherwise, still be on an importer’s own account). Thus, it is necessary to consider the chain of transactions in greater detail. Who incurred the costs of the importation? Did the profits lie elsewhere with another operator involved in the importation or with related operators?

74.

However, whilst newcomers’ resources had to enable them to import, neither Article 7(a) nor any other provision of Regulation No 2362/98 required newcomers to maintain specific infrastructures for storing and transporting imported bananas. Nothing in that regulation suggested that the legislator intended to prescribe a particular type of marketing chain for banana imports, or that a newcomer had necessarily to store (and ripen) the bananas before they were sold to a wholesaler or retailer. On the contrary, Regulation No 404/93 referred, in the 15th recital in its preamble, to the need for the Commission to be guided by the principle of ‘avoiding disturbing normal trading relations between persons occupying different points in the marketing chain’. Nor did Regulation No 2362/98 preclude the importer from selling the goods immediately on importation to another party in the marketing chain. For the purpose of that regulation, what mattered was the newcomers’ involvement at one specific stage in that chain (importation).

75.

Thus, the fact that, prior to importation and/or application for registration, annual allocations and import licences, a newcomer had agreed that it would buy or sell other operators’ bananas and use other operators’ facilities for transportation, storing or ripening was not an obstacle to registration under Article 7(a) of Regulation No 2362/98. Nor should it be as regards maintaining newcomer status.

76.

Indeed, given the characteristics of the banana market, such agreements may often have been a necessity. Historically, the market was dominated by a small number of vertically integrated multinational operators which often controlled the entire marketing chain including ownership of plantations, production (such as growing, packaging and quality control), transport, importation, ripening, storage and distribution; and which benefited from significant economies of scale. Over time, the market is becoming more fragmented; new operators enter the market at different stages of the marketing chain even if entry can be costly and difficult. Because bananas are perishable, those stages must be carefully planned. Thus, assuming that an operator entering the market is not vertically integrated so as to control each or most stage(s) of the marketing chain, market entry is likely to depend on (upstream and downstream) agreements with other operators. ( 34 )

77.

The common organisation of the market in bananas was modelled on the concept that both traditional operators and newcomers would participate in the import trade for bananas, this being intended to ‘encourage healthy competition’. ( 35 ) In my opinion, such a competitive relationship could not exist if the two categories of operator did not freely determine their conduct on the market, in particular as regards decisions and activities relating to actual importation. Thus, if a traditional operator had decisive influence over the conduct of another operator as regards the importation aspects of its commercial policy and the latter carried out, in all respects, the instructions given to it (directly or indirectly through an intermediary) by the former as regards importation of bananas, the latter operator could not be said to have been acting on its own account. It would in reality have been a mere cipher: a means for the traditional importer to strengthen its market position and undermine competition still further.

78.

Nor could there be such a competitive relationship where a newcomer, whilst formally independent in relation to a traditional operator, none the less (freely) agreed to a scheme through which it imported bananas using its own import licenses for the account of that traditional operator.

79.

An interpretation that stresses the need for genuine action by a newcomer on his own account after registration is also consistent with the objective, expressed in recital 8 in the preamble to Regulation No 2362/98, of avoiding, through the application of tighter eligibility criteria, registration of purely fictitious agents and the grant of allocations in response to artificial or speculative applications. The legislator had already responded to apparent abuses of existing conditions by making eligibility criteria stricter and describing them in more detail. None the less, although these changes may have reduced the possibility of abuse, no legislation can guarantee a zero risk of abuse of law.

80.

I therefore conclude that Articles 7(a) and 8(4) of Regulation No 2362/98 were to be interpreted as requiring that operators must act on their own account both to be registered, and to continue to qualify, as ‘newcomers’. Acting ‘on their own account’ was to be interpreted as meaning that such operators had to act for their own purposes and at their own commercial risk.

81.

Article 21(2) of Regulation No 2362/98 prohibited the transfer of rights arising under import licences from newcomers to traditional operators. It did not prohibit other transfers, which were regarded as ‘a means intended to contribute to the competitiveness of operators marketing Community and ACP bananas and to facilitate the integration of the Member States’ markets’. ( 36 )

82.

In the present case, the Italian newcomers did not transfer rights under their import licences to S.I.M.B.A., but themselves imported the bananas and placed them in free circulation. Thus, it would appear at first glance that Article 21(2) was respected. However, the bananas did change owner several times before and after their importation.

83.

I agree with the Commission that Article 21(2) of Regulation No 2362/98 limited neither the sale of bananas in third countries nor their sale back after importation, even if those transactions occurred on the basis of a pre-existing agreement. In a manner comparable to the position taken by the Court in SICES and Others ( 37 ) as regards Article 6(4) of Regulation No 341/2007, ( 38 ) I consider that Article 21(2) of Regulation No 2362/98 simply did not regulate the situation and thus did not preclude it.

84.

However, if such a transfer from a new operator to a traditional operator were allowed, the traditional operator could have imported on its own account a larger quantity of bananas at a preferential duty rate.

85.

Thus, where a series of transactions which were otherwise permissible under Regulation No 2362/98 had the effect and were intended to put a traditional operator in the same position as if it had benefited from a prohibited transfer of licences, there might none the less be infringement of Article 21(2) of Regulation No 2362/98 on grounds of abuse of law.

86.

In order to put the traditional operator in the same position, a newcomer must necessarily have imported its bananas and then sold them, whether or not through an intermediary, back to the traditional operator. For the traditional operator to have enjoyed the benefit of the preferential duty, at some point an operator must have acted not on its own account but rather for the account of the traditional operator.

87.

Where the operator so acting is the newcomer importing bananas, that operator has not satisfied the condition for maintaining newcomer status. However, the traditional operator may have enjoyed the (undue) benefit of the preferential duty thanks to the actions of a different operator in the chain of transactions. Thus, the fact that a newcomer is found to have imported the bananas on its own account does not remove the need to verify whether there was abuse of law somewhere else in the chain.

88.

That verification is to be carried out, if necessary, by the competent national court. ( 39 ) In SICES and Others — delivered after the reference in this case was lodged — the Court has already clarified how this must be done.

89.

SICES and Others concerned similar facts in a comparable context. At issue there was Regulation No 341/2007, ( 40 ) which provides, as regards garlic imports, for preferential access and tariff quotas; requires an import licence ( 41 ) in order to prevent fraud as regards the origin of garlic; and distinguishes between traditional and new importers. In order to safeguard competition and prevent speculation and abuse in allocating import licences, Regulation No 341/2007 prohibits the transfer of such licences and penalises the submission of multiple applications. ( 42 ) The specific duty charged made importation outside the tariff quota unprofitable.

90.

Several new importers appeared to have circumvented that prohibition, using the scheme of preferential access and tariff quotas: one of two companies, having used their import licences, would buy garlic from a Chinese supplier; either one would sell the garlic to new operators which then imported and sold the garlic again to one of the two companies which operated both as traditional importer and wholesaler and, prior to importation, had already agreed to purchase the garlic once it was in free circulation.

91.

After confirming its settled case-law on the need for a combination of objective and subjective elements for finding an abuse of law and on the role of the national court in verifying both elements, ( 43 ) the Court examined whether Article 6(4) of Regulation No 341/2007 precluded this series of transactions. ( 44 )

92.

As regards the objective element, the Court found that safeguarding competition between genuine importers meant that no single importer should be able to control the market. That objective was not achieved because, by transactions such as those at issue, ‘the purchaser in the European Union, who is also a traditional importer, does not acquire the right to have its reference quantity … calculated on a basis including the quantities of goods it purchased from the importers after they received customs clearance’. Moreover, the Court found that such transactions enabled a purchaser (having exhausted its entitlement to import garlic at the preferential duty rate) ‘to obtain imported garlic at a preferential rate and to extend its influence on the market beyond its share of the tariff quota which was granted to it’. ( 45 )

93.

As regards the subjective element, the Court held that what needed to be shown was that ‘the importers intended to confer such an advantage on that purchaser and that the transactions [were] devoid of any economic and commercial justification for those importers’. At the same time, it was necessary to take into account the fact that ‘the importers are obliged to use the “A” licences which were issued to them subject to penalties and they therefore have a genuine interest in carrying out imports’. Whilst such transactions ‘may not a priori be regarded as being devoid of economic and commercial justification for the latter’, the Court took the view that ‘[i]t cannot, however, be excluded that, in certain circumstances, transactions such as those at issue in the main proceedings were artificially created with the essential aim of benefiting from the preferential rate of duty’. Factors that could establish that artificial character included the fact that the licence holder did not assume any commercial risk because that risk was in reality covered by its purchaser, who was also a traditional importer, and the fact that the importers’ profit margin was insignificant or that the prices of the garlic sold by the importers to the purchaser in the European Union were lower than the market price. ( 46 )

94.

At paragraph 40, the Court concluded that transactions such as those at issue constitute an abuse of rights ( 47 ) where they are artificially created with the essential aim of benefiting from the preferential rate of duty and that checking for such abuse requires a national court to take into account all the facts and circumstances of the case, including the commercial transactions preceding and following the import at issue.

95.

In my opinion, the same conclusion applies when considering whether there was an abuse of law in circumstances where operators acted so as to put a traditional operator in the same position as if the import licences held by properly registered newcomers were transferred to it, for the sole purpose of wrongfully obtaining advantages under EU law. ( 48 )

96.

The starting point here must be that the newcomers were properly registered and satisfied the conditions for maintaining that status. Where an operator did not satisfy those conditions, it did not qualify as a newcomer and thus could not import bananas under part of the tariff quota reserved for that type of operator. There would no longer be any valid justification for maintaining import licences held by that operator and obtained on the basis of its former newcomer status: there was no need to administer a right to import that no longer existed. ( 49 ) As a result, those import licences became invalid and the operator would not have been able to obtain new ones.

97.

If the conditions for maintaining newcomer status were satisfied, that meant that the operators imported bananas for their own account. However, whilst those conditions significantly reduced possible abuses, they did not altogether exclude the risk that a newcomer might be implicated in a series of transactions that undermined the objectives of Regulation No 2362/98, including those underlying the prohibition in Article 21(2).

98.

So far as the objective element of abuse of law is concerned, it seems to me that the reasons underpinning this condition overlap to a large extent with the objectives of Regulation No 2362/98. ( 50 )

99.

Thus, a series of transactions such as that at issue in the main proceedings might reduce competition and limit actual market entry by newcomers or any practical effect of their entry. The scheme (as described by the referring court) in essence enabled a traditional operator to increase its share of the tariff quota and import a larger quantity of bananas at a preferential duty rate. As a result, it disrupted the management of the tariff quota because it was liable to distort patterns of trade and to make it difficult to discern who was actually responsible for the imports of bananas under that tariff quota.

100.

As regards the subjective element of abuse of law: was it the intention of the operators to benefit from an undue advantage as a result of the application of EU law by artificially creating the conditions for obtaining that advantage? ( 51 )

101.

Individual facts taken on their own might not necessarily be sufficient to identify whether the essential aim of the transaction was to obtain an undue advantage. ( 52 ) Thus, merely taking advantage of the economic benefits resulting from transactions authorised under EU law does not constitute abuse. When considered together, however, those facts might show that one or more operators intended to confer an undue advantage on the traditional operator by engaging in import activity that was devoid of economic and commercial justification for either the newcomers which carried out the actual import and/or other operators involved in transactions prior to and after importation.

102.

In essence, the competent national court must examine the design, objective and structure of the transactions and the relations between the different parties in order to determine whether, had there not been the advantage of paying a lower duty, the entire series of transactions would not have taken place.

103.

Thus, in the present case, it is for the competent national court to examine which operator carried the cost of importation and which benefited from the importation and the other transactions. That involves verifying the features of the agreement and the transactions between the traditional operator (S.I.M.B.A.) and the intermediary newcomer (Rico) and between the latter and the Italian newcomers which imported in order to determine whether the intention of (some of) the operators was to enable S.I.M.B.A. to enjoy the benefits resulting from a prohibited transfer of rights under the import licences obtained by the Italian newcomers, on the initiative of Rico and pursuant to an agreement between Rico and S.I.M.B.A. Thus, it is relevant to examine whether, as a result of the transactions, S.I.M.B.A. increased its share of the tariff quota at a price that equalled that of using the Italian newcomers’ import licences (which would have been the price for a transfer). At the same time, the prices at which the Italian newcomers bought and sold the bananas must be compared with market prices and with the cost of importation. Thus, the price paid in relation to each of the transactions will help to show whether or not the subjective element of abuse of law was present.

104.

Furthermore, the national court must determine whether the use of Rico, which was also a newcomer and held import licences, had the objective of avoiding any direct connection between S.I.M.B.A. and the Italian newcomers, given that a newcomer’s importation of bananas was likely to appear more suspicious, in terms of Article 21(2), if the bananas were purchased directly from a traditional operator than if they were purchased from another newcomer because there was no prohibition on transferring licences between newcomers.

105.

As I see it, the fact that the Italian newcomers did not own infrastructure for storing and transporting bananas and the fact that agreements between operators existed prior to importation cannot be decisive in establishing the subjective element. ( 53 ) At best, those facts might reinforce a conclusion on the subjective element based on other facts.

106.

The same reasoning applies where a traditional operator involved in a series of transactions such as those at issue had exhausted its licences to import under the tariff quota and could no longer itself take advantage of the preferential duty rate (as was the case in SICES and Others). Whilst that fact might show that the traditional operator might have an interest in obtaining bananas imported at the preferential duty rate through other means, it is not decisive. There could still be an abuse of law even if the traditional importer had not exhausted those import licences but the newcomers none the less imported bananas at the more preferential duty rate. Thus, for example, a particular import licence might not be used due to delays in transport or because demand unexpectedly declined. Those factors might be unforeseen at the time when an abusive scheme is designed and implemented.

107.

I therefore conclude that the guidelines laid down in SICES and Others also apply here.

108.

Regulation No 2988/95 applies only to conduct that prejudices (or would prejudice) the European Union’s budgets, including by the loss of revenue. ( 54 )

109.

Article 4 of Regulation No 2988/95 in essence defines forms of administrative measures to be applied where an irregularity occurs. However, it also provides specifically for refusal to award an advantage or for its withdrawal with respect to acts which are, in essence, aimed at obtaining an advantage that is contrary to the objectives of applicable EU law (the objective element in the Court’s case-law on abuse of law) by artificially creating conditions required for obtaining the advantage (the subjective element in that case-law). That specific rule in Article 4(3) already existed when the Court set out the objective and subjective elements of the test to be applied when checking for abuse of law.

110.

Where it is found that Article 21(2) of Regulation No 2362/98 is infringed on grounds of abuse of law, I consider that the acts constituting such an abuse of law correspond to the conduct described in Article 4(3) of Regulation No 2988/95. However, the definitions do not entirely overlap. Article 4(3) is more specific in that it concerns acts that have or would have the effect of prejudicing the general budget of the European Union or budgets that it manages. For an action to fall within the scope of Regulation No 2988/95, it must prejudice the financial interests of the European Union. ( 55 ) That might not always be the case with every form of abuse of EU law.

111.

As I see it, such acts are a particular type of irregularity within the meaning of Article 1(2) of that regulation. As a result, unless stated otherwise, references to an irregularity in Regulation No 2988/95 must be interpreted to include acts within the meaning of Article 4(3). ( 56 )

112.

In Regulation No 2988/95, a distinction is made between administrative penalties and administrative measures. Whilst Article 4 is included in Title II (‘Administrative measures and penalties’), Article 4(4) expressly states that measures provided for in that article are not penalties. The consequence under Article 4(3) for the person committing an irregularity is either failure to obtain the advantage that prejudices the EU budget or, if it has already been obtained, its withdrawal. The obligation to repay an advantage is, in such circumstances, not a penalty. It merely follows from the fact that the advantage received was a payment that was not due because the conditions required to obtain the advantage under EU rules were created artificially. ( 57 ) In the context of export refunds, the Court has held that an importer who artificially places himself in a situation making him eligible for export refunds must pay the duties on the products concerned without prejudice, where appropriate, to administrative, civil or criminal penalties under national law. ( 58 ) It has taken the same position in other contexts. ( 59 ) As I see it, those measures are in essence about recovering specific monies that should have been, but were not, paid into the EU budget; or that were wrongly paid out of that budget. Article 4(3) sets out the specific measures to be taken in case of the particular form of irregularity there defined.

113.

The existence of an irregularity depends on whether there has been an infringement of a provision of EU law other than Regulation No 2988/95 and on whether its effect is to prejudice the EU budget. The Court has created a kind of parallelism by holding that administrative measures to correct such an irregularity within the meaning of Article 4 must likewise find a basis in other (sectoral) legislation and cannot be based only on Regulation No 2988/95. ( 60 ) In so ruling, it appears to have applied Article 2(2), which deals with administrative penalties, to administrative measures under Article 4. Additionally, if the EU legislator has not adopted such rules, the Court has held that Member States are also entitled to maintain or adopt provisions in that domain and in respect of those operators in so far as such provisions prove to be necessary for combating fraud and provided that they observe general principles of EU law, general rules laid down in Regulation No 2988/95 and existing EU sectoral rules concerning other operators. ( 61 )

114.

At the same time, where an abusive practice has been found to exist, the Court appears to have accepted in general terms (and also in cases where it relied on Article 4(3) of Regulation No 2988/95) that it is necessary to re-establish the situation that would have prevailed in the absence of the transactions constituting that abusive practice. ( 62 )

115.

It is not entirely clear to me how the Court’s case-law on the need for a separate legal basis for administrative measures (if that is a correct reading ( 63 )) is to be reconciled with the presence of Article 4(4) and the wording of Article 2(2) of Regulation No 2988/95, which imposes that prior condition for administrative penalties and in so doing reflects the general principle ‘nulla poena sina lege’. I would have thought that imposing a penalty is not the same as recovering an advantage that was abusively or otherwise unlawfully obtained and does not, therefore, need to be circumscribed by precisely the same conditions. However, it does not seem necessary to explore the matter further here.

116.

In any event, in circumstances such as those at issue, where it is found that Article 21(2) of Regulation No 2362/98 is infringed on grounds of abuse of law, I consider that a traditional operator obtains an undue advantage that prejudices the EU budget within the meaning of Regulation No 2988/95 if the customs duties based on the preferential duty rate at which the bananas were imported were lower than the customs duties which that operator would have paid had it itself imported the bananas in question. If a customs debt remains after clearance, uncollected duties may be recovered on the basis of the Community Customs Code (and, where relevant, other bases in national law). This is to be done in conformity with the general rules in Regulation No 2988/95.

117.

In the light of all the foregoing considerations, I am of the opinion that the Court should answer the request for a preliminary ruling from the Corte Suprema di Cassazione (Italy) to the following effect: