W2(1) - Free Movement of Goods | Quizlet

goods

Tangible products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions

- broad meaning: incl. waste, electricity, human corpses,

customs union

internal dimension

= Abolishment of all customs duties and charges having equivalent effect (art. 28 and 30 TFEU)

- WITHIN the EU

- all taxes which are imposed on goods simply because they cross a frontier are prohibited

external dimension

= having a 'uniform border' outside the EU (art. 31 and 207 TFEU)

- e.g. importing from a third country - the same customs tariff is to be paid regardless of mb state border

types of measures

1. taxation --> art. 30 TFEU (customs) / art. 110 TFEU (internal taxation)

2. non-taxation --> art. 34 TFEU (Quantitative restrictions)

art. 30 TFEU

“All customs duties (any sort of tax/charged imposed for crossing a frontier) and charges having equivalent effect are prohibited”

- charges having equivalent effect --> no set definition, if the tax needs to paid for the sole reason that a good crosses a frontier (but is not directly called a customs duty) then also prohibited

case law(1): Statistical Levy ("de minimis" rule = does not matter how high or low the tax is)

exceptions to art. 30

No real justifications or exceptions to this prohibition (also not expressly said in the article), but some charges fall outside the scope... (implied justifications)

1. Situation where a fiscal charge is seen as a consideration for a service offered by the state --> a charge placed in consideration for specific service benefiting individual traders

2 .Charges that a mb state levies as compensation for frontier checks that are required under EU law --> e.g. a mb state imposes a charge for a good crossing a frontier that is REQUIRED by EU law itself

art. 110 TFEU

"no mb state shall impose, directly or indirectly, on the products of other member states any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products"

- applies to taxes that a mb state has put in place that are imposed on all economic operators within a certain sector/industry

- applicable to indirect taxation (“on products”), not applicable to ALL taxes

case law(3): Outokumpu / Humblot / Commission v UK (beer vs wine)

indirect vs direct taxation

indirect --> taxes that can be passed on to another person (consumers) (e.g. VAT, excise duties)

direct --> taxes that cannot be passed on to another person (e.g. income tax, corporate tax)

art. 110 comparison

compared to art. 30 (and 34) TFEU...

- this article entails (only) a prohibition of discrimination and protectionism against foreign products

- more in line with the international model / host state rule

--> more permissive approach (art. 30 and 34 more restrictive): customs duties are simply prohibited but internal taxation on products are allowed as long as there is no discrimination against foreign products or protects domestic industry

art. 110(1)

prohibition of discriminatory taxation

1. check whether two goods/products are ‘similar’ (=they are interchangeable for the consumer)

2. check whether either of the two products is disadvantaged as opposed to the other (whether domestic production is favored)

--> direct discrimination = making a distinction within the text of law itself (Outokumpu)

--> indirect discrimination = text of law does not make a distinction between different types of goods but the actual effect of the law is more burdensome on foreign goods than domestic-produced goods (Humblot)

art. 110(2)

prohibition of protective taxation

= taxation applied to products that are NOT similar but nevertheless still compete on the market

- but sometimes difficult to ascertain which products actually ‘compete’ (e.g. in beer vs wine looking at volume, production, the alc % etc.)

art. 34 TFEU

"Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States”

--> concerns any mb state measure which is NOT a tax

- quantitative restrictions = quotas: determine how much of a certain good can be imported into a mb state (in the most extreme cases a total ban)

cases (7): Dassonville / Krantz / Cassis de Dijon / Keck / Italian Trailers / Familiapress / Gourmet International

direct effect: Vertical direct effect only

structure of art. 34

1. is art. 34 TFEU applicable in this case?

a) case is about goods

b) NO applicable EU harmonisation (assume no)

c) cross-border element

d) claimant can invoke art. 34 against defendant (direct effect)

2. material scope

a) does the measure constitute a quantitative restriction or a MEE (product requirement, selling arrangement, any other measure hindering access to foreign products)?

3. Justification

a) ground of justification under art. 36 TFEU or a mandatory requirement?

b) is the measure proportionate (suitability + necessity)

is art. 34 applicable (step 1)

a) case concerns goods

--> technical definition: "tangible product (...) capable of being the subject of commercial transactions"

b) NO applicable EU harmonisation

--> assume safely unless stated otherwise

c) cross-border element

--> there should be a link to trade between mb states

--> Reverse discrimination (mb state is allowed to disfavour its own goods) and wholly internal situations OUT of scope

d) claimant can invoke art. 34 TFEU against defendant

--> sufficiently clear and precise: has vertical direct effect

--> incl. where restrictions to free movement has been caused by individuals and the state has not enforced the law against them (angry farmers case) ("Member States are obliged to enforce against sustained restrictions to free movement caused by individuals")

--> NO Horizontal direct effect

material scope of art. 34 (step 2)

either a quantitative restriction OR

an MEE:

1. Basic definition of MEE: Dassonville (exception: Krantz)

2. What type of MEE (use category approach)

a) Product requirement (Cassis de Dijon)

b) selling arrangements (Keck & Mithouard / Familiapress / Gourmet International)

c) any other measures hindering access to foreign products (Italian trailers)

product requirements (MEE)

Any national rule that would bear on the actual content of the product

- imposed on products lawfully produced and marketed in another mb states

- still considered MEEs even if they do NOT discriminate

rationale: duty of mutual recognition of mb state's product requirements (recognising the product standards of other mb states) / federal model or home state rule

counterbalancing / compensatory factor: the introduction of mandatory requirements as justifications (Cassis de Dijon)

(easier to argue for plaintiff/individual --> burden of proof on mb state)

selling arrangments (MEE)

national rule on how products are promoted, the different ways in which they can be sold, marketing etc. / rules about how products are sold (not about the content of the product itself)

- examples incl: advertising, opening hours, sales promotion

- are presumed NOT to be MEEs under the meaning of Dassonville

- are MEEs if and only if they are indirectly or directly discriminatory

rationale: International model or host state rule (principle of non-discrimination)

case law: Keck and Mithouard / Familiapress / Gourmet int.

(easier to argue for defendant mb state --> burden of proof on plaintiff to prove that there is a discriminatory effect)

any other measures hindering access to foreign products (MEE)

neither a product requirement nor selling arrangement; measure which hinders access of products originating in other Mb states to the market (incl. but not limited to use restrictions and all (in)direct discrimination)

- market access test applied

- discrimination does not necessarily have to be proven

rationale: National principle of free market access; consumer restrictions falls exclusively under the market-access test (national model)

case law: Italian Trailers

art. 36 TFEU justification (step 3)

1. ground of justification

--> public morality, public policy or public security

2. No arbitrary discrimination or a disguised restriction on trade

--> arbitrary discrimination is still "discrimination for the purpose of discriminating", indirect is more accidental discrimination

--> arbitrary discrimination cannot be justified on the basis of public morality (conegate)

3. Proportionality test

a) suitability --> is the measure suitable to reach its objective (i.e. the ground of justification)?

b) necessity --> is the measure necessary in the sense that are no less restrictive, alternative measures which attain the objective equally well? (Italian Trailers)

mandatory requirements justification (step 3)

1. ground of justification

--> any reasonable policy objective that is not purely economic

- e.g. consumer protection / public health protection / environmental protection / fundamental rights protection...

2. Measure must be indistinctly applicable

(mandatory requirements cannot be invoked to justify directly discriminatory measures)

--> at the very most indirectly discriminatory

3. Proportionality test

a) suitability --> is the measure suitable to reach its objective (i.e. the ground of justification)?

b) necessity --> is the measure necessary in the sense that are no less restrictive, alternative measures which attain the objective equally well? (Italian Trailers)

taxation cases (4)

1. Statistical Levy --> art. 30 TFEU

2. Outokumpu --> art. 110(1) TFEU

3. Humblot --> art. 110(1) TFEU

4. Commission v UK (beer vs wine) --> art. 110(2) TFEU

non-taxation cases (8)

1. Dassonville --> MEE definition

2. Krantz --> Nuance to MEE definition

3. Cassis de Dijon --> Product requirements + mandatory requirements

4. Keck and Mithouard --> Selling arrangements

5. Familiapress --> Selling arrangements (nuance)

6. Gourmet International --> Selling arrangements (nuance)

7. Italian Trailers --> restrictions on product use

8. conegate --> no arbitrary discrimination

statistical levy

apply to: art. 30 TFEU / charge of equivalent effect

Facts

- Italy had imposed a levy on goods leaving or entering Italy for the purpose of collecting statistical data

Judgement: this was a charge of equivalent effect

Rule: No de minimis principle/minimum threshold for charges having equivalent effect

"any pecuniary charge, however small, imposed on goods by reason of the fact that they cross a frontier constitutes an obstacle to the movement of such goods" §7

Outokumpu

apply to: art. 110(1) TFEU / internal taxation / prohibition of discriminatory taxation

Facts

- Finish national law prescribes that coal, peat, neutral gals, electricity, oil are subject to basic duty and additional duty payable to the state

- very difficult to find out the source of imported electricity

- all imported electricity they had a flat rate that was higher than that for green energy but lower than for fossil fuel

Judgement: measure was directly discriminatory

rule: example of direct discrimination

“Community law does not restrict the freedom of each Member State to establish a tax system which differentiates between certain products, even products which are similar (...) its secondary legislation, and if the detailed rules are such as to avoid any form of discrimination, direct or indirect, against imports from other Member States or any form of protection of competing domestic product" §30

humblot

apply to: art. 110(1) TFEU / internal taxation / prohibition of discriminatory taxation

Facts

- French revenue code; distinguished taxes for cars up to 16 CV horsepower and for cars above this rate (but France did not produce any cars above 16 CV)

Judgement: measure was indirectly discriminatory

rule: example of indirect discrimination

- Although the French system embodies no formal distinction based on the origin of products it manifestly exhibits discriminatory or protective features contrary to art. 110 §14

- Resultant additional taxation is liable to cancel out the advantages which certain cars imported from other mb states might have in consumer’s eyes over comparable domestic cars §15

commission v uk (beer vs wine)

apply to: art. 110(2) TFEU / Internal taxation / prohibition of protective taxation

Facts

- UK tax regime for wine granted indirect protection to british beer: national tax on wine was significantly higher than that on beer

- Britain produced little wine: suspicion of indirect protectionism

Judgement: no matter the method of comparison beer was always favoured compared to wine; had a protectionist effect

rule: example of protective taxation between competing products

- assessment used by courts of the competing products §18

- those wines which, in view of their price, are most directly in competition with domestic beer production are subject to a considerably higher tax burden §26

Dassonville

apply to: art. 34 TFEU / definition of MEE

Facts

- Belgian rules made the importation & sale of scotch dependent on having a certificate of origin from the british customs authorities (_______ had imported such whisky without a certificate and was prosecuted)

Judgement: declared to be an MEE; It is very difficult for a trader wishing to import into Belgium whisky to obtain such a certificate

rule: definition of MEE

"All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade are to be considered as measures having an effect equivalent to quantitative restrictions". §5

rule: BUT MEEs can be justified

--> mb states may take reasonable measures to prevent unfair practices "subject to the condition that these measures should be reasonable and (...) should not act as a hindrance to trade between Member States and should, in consequence, be accessible to all Community nationals. (i.e. do not constitute arbitrarily discrimination or a disguised restriction on trade) §6

Krantz

apply to: art. 34 TFEU / Nuance to Dassonville

Facts

- Proceedings between ______, Germany on the one hand and the Netherlands collector (the collector) of direct taxes

Judgement: the national provision in this case applies without distinction to both domestic and imported good --> does not seek to control trade with other mb states

Rule: remoteness criteria / exception to MEE definition

--> national measures whose effect on intra-union trade is "too uncertain and indirect" are not MEEs" §11

Cassis de Dijon

apply to: art. 34 TFEU / MEEs: Product Requirements / Mandatory Requirements

Facts

- German law fixed the min. alcohol strength of liqueurs at 25%

- prohibited the sale of (French drink) since its alcohol content was below 15-20%

- National measure applied equally to foreign and domestic goods

Judgement: Measure is not justified under public health or consumer protection; constitutes an MEE

Rule: Product Requirements as obstacles to trade / MEEs

"concept of ‘measures having an effect equivalent to quantitative restrictions on imports’ contained in Article 35 (...) is to be understood to mean that the fixing of a minimum alcohol content for alcoholic beverages (...) by the legislation of a Mb state also falls within the prohibition laid down in that provision where the importation of alcoholic beverages lawfully produced and marketed in another Member State is concerned. --> Principle of mutual recognition/Federal model §15

Rule: Introduction of Mandatory requirements

"provisions may be recognized as being necessary in order to satisfy mandatory requirements" --> host state may invoke mandatory requirements in the general interest to impose domestic product standards: §8

Keck and Mithouard

apply to: art. 34 TFEU / MEEs: Selling Arrangements

Facts:

- Criminal proceedings brought against a supermarket manager who allowed products to be sold at a loss

- This form of sales promotion was prohibited in France

Judgement -

Rule: Selling arrangements are not MEEs unless they are directly (“in law”) or indirectly (“in fact”) discriminatory

1. Is the measure indistinctly applicable?

2. If so, will it affect in the same manner, in law and in fact, the marketing of domestic products and of those from other mb states? §16-§17

--> only if both criteria are fulfilled will the national law escape art. 34 as a non-discriminatory selling arrangement

--> in essence do not prevent foreign products' access to the market any more than access of domestic products

Familiapress

apply to: art. 34 TFEU / MEEs: Selling Arrangements (nuance)

Facts

- foreign newspaper competitor had used prize-winning crossword puzzles in its publications

- Sales technique was prohibited in Austria

Judgement: Maintenance of press diveristy not accepted as overriding requirement. This measure did NOT constitute a selling arrangement under the Keck exception --> the product itself has to be changed to comply with the national rule (product requirement)

rule: measure which bears on the actual content of products is NOT a selling arrangement but a product requirement

- §11

Gourmet International

apply to: art. 34 TFEU / MEEs: Selling Arrangements (nuance)

Facts

- injunction restraining Gourmet International Products (GIP) from placing advertisement for alcoholic beverages in magazines

- placing of such advertisement prohibited under national law

Judgement: measure not only prohibits a form of marketing a product but in reality prohibits producers and importers from directing any advertising messages at consumers (...) is an MEE

rule: Discriminatory rules regarding selling arrangements are still MEEs

- keck exception §18

- measure is liable to impede access to the market by products from other Member States more than it impedes access by domestic products, with which consumers are instantly more familiar. §21

Italian trailers

apply to: art. 34 TFEU / MEEs: restrictions on use / market access test

Facts

- Italian national law which prohibits mopeds, motorcycles, from towing a trailer on certain streets

judgement: prohibition of motorcycles towing trailers constitutes an MEE

rule: bans/restrictions on use can affect “market access”

- because consumers will be less interested in buying the products §37, §49-57

rule: proportionality test

"Such a prohibition may be justified on one of the public interest grounds set out in Article 36 EC or in order to meet imperative requirement (...) In either case, the national provision must be appropriate for securing the attainment of the objective pursued and not go beyond what is necessary in order to attain it” §58-59

conegate

apply to: art. 34 TFEU / Justifications

Facts

- seizure by UK customs authorities of goods (sex dolls and erotic stuff) imported from Germany by Conegate limited

- UK considered these goods to be indecent or obscene articles which were prohibited

judgement: could not be justified on basis of public morality; these supposedly indecent goods could not be imported while similar goods produced domestically could be freely traded without any problems

rule: arbitrary discrimination cannot be justified on the basis of public morality

"Member State may not rely on grounds of public morality in order to prohibit the importation of goods from other Member States when its legislation contains no prohibition on the manufacture or marketing of the same goods on its territory" §16 and §20-21