A World Trade Organisation (WTO) panel has found the United States broke trade rules by imposing sanctions on the European Union in a row over trade in bananas, sources familiar with the case said yesterday.

The WTO panel's confidential interim ruling, sent to parties to the case this week, finds largely in favour of the EU which complained about the behaviour of the US last year.

The dispute panel found that "what the US did was illegal" because it acted before getting WTO authorisation, one source said.

After the WTO found that the EU's banana import rules broke world trade rules, the United States responded in March last year by demanding that importers post bond to cover threatened 100 per cent duties on $520 million (€534 million) of EU exports.