Public law 2 - Exceptions to the free movement rules

Are member states allowed to restrict free movement rights in certain circumstances?

Yes they can as long as they restrict them as another interest should take precedence over the free movement objective

The test to see if member states restriction of the free movement rights includes:

• Is the challenged measure a restriction of the free movement rights guaranteed by the Treaty?

• If it is, can the measure be justified?

• If it can, is the measure proportionate?

Derogation and EU law

Derogation is the act of stating that a law/ rule no longer needs to be obeyed - internet definition

Any derogation which is allowed will need to be accommodated within the legislation from the outset.

EU legislation can provide for 2 options

• A general derogation clause which states that the Commission will examine the issues that the Member State may have when applying provisions of a measure on a case by case basis, and so may decide to allow the state to derogate from that obligation for a specific period

• A specific derogation clause which states that there is a particular exception for a Member State for part of the measure’s requirements.

What is the outcome for Member States when EU legislation only provides for minimum harmonisation?

This means that States are able to adopt more strict standards to protect public interests at a national level. So the Union legislation acts as the floor, and the Member State can decide to build upon this or not.

But following the first Tobacco Advertising Case (Germany v Parliament and Council 2000), Art 8 states that “Member States shall not prohibit or restrict the free movement of products or services which comply with this directive). So while EU legislation marks the “floor” for public interest protection, the Treaty represents the “ceiling” for national regulatory discretion

What is the outcome for Member States concerning the question of derogation when there is no relevant Union legislation?

Here, national measures can be tested against the exceptions or limits of the Treaty freedoms (ie it would be tested against the Treaty freedoms such as goods, people), in the absence of direct discrimination (if the national measure does not directly discriminate against people/ businesses from other EU countries), within the justification framework developed through the case law of the Court of Justice.

Where in the Treaty does it mention grounds for derogation concerning goods?

Art 36 TFEU - “public morality, public policy, or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property”

Art 36 TFEU also states that “such prohibitions or restrictions shall not …. constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States”

What are the different types of restrictions on free movement and how can these be defended?

• directly discriminatory on the grounds of nationality (discriminatory in law)

• indirectly discriminatory (not discriminatory in law, but discriminatory in result or effect)

• non discriminatory (not discriminative in law or effect, but still restrictive of free movement)

Directly discriminatory restrictions can be defended only by the grounds provided expressly in the Treaty

Whereas, to defend indirect discrimination and non-discrimination (indistinctly applicable measures), States can raise any public interest argument that they wish, without being confined to ones expressly states in the Treaty - doesn’t mean their argument will be successful

How was the case of Cassis de Dijon (1979) used so the courts could allow genuine policy concerns to be argued which were relevant when the Treaty of Rome was drafted?

In that the case the court said that “obstacles to movement within the Union resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer”

How has the idea of “mandatory requirements” moved to overriding requirements in pubic interest”?

The idea of “mandatory requirements” is rarely used in case law anymore, and instead the court advises that national measures should be justified by overriding reasons in the public interest capable of justifying restrictions on the fundamental freedoms guaranteed by the Treaty”

The burden on proof

The burden of proof will fall on the Member State regardless if their argument is made on derogation grounds or as an overriding public interest requirement

The required standard of proof is hard to pin down, but two general principles have been extracted from the court

• its not sufficient for States to just assert the relevance of a public interest objective to defend a contested national measure. Instead they must present evidence to support their claims

• the evidence must be sufficiently precise to provide evidence for their argument

What is the general rule for the fundamental rights of member states to justify their actions through public interest matters?

“A member state may invoke reasons of public interest to justify a national measure which is likely to obstruct the exercise of free movement of rights only if the measure is compatible with the fundamental rights whose observance the Court ensures” - Carpenter v Secretary of State for the Home Department (2002)

The court has confirmed that the protection of fundamental rights by a member state can be a legitimate basis for restricting the free movement of rights.

What is the extent to which a member states derogation and justification arguments can be scrutinised for their compatibility with EU standards of fundamental rights protection?

The court ruled that “where a Member State seeks to justify rules which are likely to obstruct the exercise of the freedom to provide services, such justification, provided for by union law, must be interpreted in the light of the general principles of law and in particular of fundamental rights”

What the requirements for the proportionality test?

Suitability (appropriateness test)
Necessity (least restrictive means test)

Proportionality (balancing test)

What is the proportionality test?

“A restriction on the fundamental freedoms enshrined in the Treaty may be justified only if the relevant measure is appropriate to ensuring the attainment of the objective in question and does no go beyond what is necessary to attain that objective” - Attanasio Group Srl v Comune di Carbognano (2010)

What is the appropriateness part of the test?

Restrictive national measures done for public interest reasons will be seen as appropriate if “the means which they employ are suitable for the purpose of attaining the desired objectives” (Commission v Germany 2004)

What is the necessity part of the test?

This normally involves consideration of whether alternative measures could have been used which would have achieved the public interest objective, but had less restrictive effects on EU trade. So this is testing if alternative measures could be equally effective at achieving the public interest objective, but has a less restrictive effect on EU trade.

The Court states that if “a Member State has a choice between various measures to attain the same objective it should choose the means which least restricts free movement” (Walter Rau Lebensmittelwerke v De Smedt1982)

The proportionality part of the test:

This questions if the benefit of the measure outweighs the restriction on trade ie a burden cannot be excessive for imports

Case of Scotch Whisky Association v Lord Advocate (2015)

• Gov introduced minimum pricing for alcohol to reduce alcohol related harm and ease the burden on the health service by targeting cheap, high alcohol

• They argued that this disproportionately targeted cheaper imported alcohol as they had to price cheap to get into the market

• It was decided that this was proportionate as taxes were less effective, so there was no other appropriate measure