Free Movement of Goods Revision Notes PDF

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Summary

Everything you need to know for the Free Movement of Goods including highlighted cases and years., Everything you need to know for the Free Movement of Goods including highlighted cases and years....

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Free Movement of Goods -

Articles 34 & 35 TFEU Prohibition of quantitative restrictions on imports and exports and equivalent measures having similar effect between member states

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Article 30 TFEU Prohibition of custom duties and equivalent charges between member states Article 110 TFEU Prohibition of discriminatory taxation between member states Article 36 TFEU lists 6 derogations that member states can invoke to justify a ‘breach’ of Articles 34 and 35.

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There is NO legislative interpretation to ‘goods’ Articles 34 and 35 have direct effect. Dassonville’s definition of measure only effects member states and not companies. Cassis de Dijon and mandatory requirements – Article 34 and 35 TFEU Cassis de Dijon established important principles regarding Articles 34 and 35: -

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National legislation which applies equally to domestic goods as well as imports but which is nevertheless capable of hindering trade may be justified by mandatory requirements. This is known as the Rule of reason and has an open list. Goods produced/manufactured in one state should be available to sell in all member states Rule of mutual recognition Where a member state seeks to prevent or restrict import/export of such goods the burden of proof lies with them to rebut the above presumption. National legislation that only applies to imports/exports; or discriminates in some way against imports/export goods, may NOT benefit from rule of reason.

Mandatory Requirements -

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The Fairness of Commercial Transactions: Oosthoek’s – Prohibiting the offering of free gifts as a means of sales promotion as it misled customers as to the real price of certain items and distorts competition. Consumer Protection: Most frequently argued. Could be used to justify – for example – National legislation protecting consumers from misleading packaging e.g. Consumer Protection Act 1987. Fairly unsuccessful as the ECJ attributed a fair amount of intelligence to the consumer. Schmuckhandels: Pressure to buy, lack of knowledge or option to browse in own home. Environmental Protection – ADBHU – Involved legislation involving the restriction on the moving of waste oils; Danish Bottles involving legislation on promoting recycling. Cultural Protection – Cinetheque – Involved the protection of national socio-cultural values. Road Safety – Motorcycle Trailers – Moped not being allowed to pull trailers does hinder trade but is justifiable on grounds of road safety. Protection of Fundamental Rights – Schmidberger – CJEU stated fundamental rights are to be respected by the EU and member states. Protection of the Childs – Dynamic Medien – All Video and DVD’s (image storage media) to be inspected and classified by German authorities.

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Fighting Crime – Tinted Film – No tinted glass on cars accepted as it helped check for seatbelt usage. Rejected Mandatory Requirements - Economic Grounds - Duphar - Protecting Biological Diversity – Bluhme Limitations Indistinctly applicable measures are the only rules which mandatory requirements can negate i.e. Affective EQUALLY to domestic and imported goods. Although environmental protection was available in Dusseldorp and Walloon Waste – Both were only distinctly applicable to imported/exported goods. Proportionality Rule – Only block national legislation as fat as it is necessary so free movement is affected less. Selling Arrangements Keck & Mithouard Landmark case - "selling arrangements" did not constitute a measure having equivalent effect to a quantitative restriction on trade between Member States of the European Community, as it was then. These are exempt from Article 34. “16. By contrast, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment (Case 8/74 [1974] ECR 837), so long as those provisions apply to all relevant traders operating within the national territory and so long as they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States. 17. Provided that those conditions are fulfilled, the application of such rules to the sale of products from another Member State meeting the requirements laid down by that State is not by nature such as to prevent their access to the market or to impede access any more than it impedes the access of domestic products. Such rules therefore fall outside the scope of Article 30 of the Treaty.” Two conditions had to be met to define a selling arrangement: 1) Applied to “all relevant traders operating within national territory” and 2) Had the same “effect” in law and in fact on the “marketing of domestic products and of those from other member states”. Example of selling arrangements - Prices at which goods are sold – Keck & Mithouard – Selling at a loss. - Sunday Trading Laws – Punto Casa – Italian prohibition on Sunday Trading. - Opening Hours – Tankstation – Dutch legislation relating to maximum opening hours of petrol stations. - Restrictions on where goods are sold – Processed Milk for Infants – Powered milk only to be sold at pharmacies. - Restrictions on certain sales methods – Burmanjer & Others – Sale of subscriptions on the street.

Keck advertising restrictions - Keck only applies where advertising is partially restricted not fully – Hunermunde & Others - Ortscheit – Not a selling arrangement as only discriminated against imported pharmaceuticals and not domestic also. - Bans on internet/Mail order sales – Discriminates against imported goods – Deutscher Apothekeruerband Derogations from Articles 34 & 35 TFEU: Article 36 TFEU The six derogations are: 1) Public morality – R v Henn & Darby 2) Public Policy – R v Thompson & Others 3) Public Security – Campus Oil 4) Protection of health and life of humans, animals or plants – Toolex Alpha 5) The protection of national treasures possession artistic, historic or archaeological value 6) The protection of industrial or commercial property. French Turkeys – A case illustrating disguised restrictions and arbitrary discrimination. UK banned French turkeys for health reasons but the commission was suspicious of ulterior motives. Custom Duties and internal taxations Article 30 and Article 110 TFEU Article 30 TFEU imposes a prohibition on custom duties and equivalent charges on imports and exports between member states. Statistical Levy – Defined charges having equivalent effect to custom duties on imports and exports. As referring too, any pecuniary charge however small whatever its designation or mode of application, which is imposed unilaterally on domestic or foreign goods by a reason of the fact they cross a frontier and which is not a custom’s duty in the strict sense. Van Gen den Loos – Shows Article 30 direct effect in action Social Funds for Diamond Workers – The scope of Article 30 is displayed: -

The size of the duty is irrelevant The purpose of the imposition of duty is irrelevant A duty does not have to be ‘protectionist’ – Does not protect domestic production or manufacturing of equivalent foods in need of protection by cheaper imports Kapniki Mikhailidas – The purpose is irrelevant – Breached Article 30 even though the revenue was to help tobacco workers Export Tax on Art Treasures – Article 36 does not protect Article 30, only Articles 34 and 35. Donner - If a member state can show a charge can be regarded as a payment of tangible benefit to the importer/exporter, then they may escape the prohibition. Article 110 TFEU – Excise Duties This provision tackles two distinct, but potentially overlapping, national taxation practices: -

Taxation that discriminates between domestic goods and the same, or similar, imported goods Taxation that protects domestic goods from competition by any imported goods.

Direct effect of Article 110.

The case of Alfons Lutticke gives Article 110 Direct effect. Difference between customs duties and excise duties Excise – is levied by the government and the goods and products that are manufactured in the country Custom – is applied for goods imported from foreign countries What is ‘Tax’? Reprographic Machines – Defines a tax for Article 110 as: “general system & internal duties applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products”: 1) Customs duties and excise duties are mutually exclusive 2) Customs duties are prohibited by Article 30. Excise duties are permitted unless they are discriminatory or protective in effect. Allows freedom of taxation as long as there is no discrimination or self-protection. Illustrated in Danske Bilimportorer – Danish have no car industry. First Paragraph Article 110 TFEU What is meant by the term ‘similar’ products? Tax on Spirits: ‘Similar’ does not mean ‘identical’, rather, the issue was whether different products had “similar characteristics and meet the same needs from the point of view of the consumer.” John Walker – Are fruit liqueur wines ‘similar’ to whisky? Roders – Is champagne ‘similar’ to sparkling wine? Second Paragraph Article 110 TFEU It is not necessary for the products to be similar. Cooperativa Co-Frutta – “All forms of indirect tax protection in the case of products which, without being similar within the meaning of the first paragraph, are nevertheless in competition, even partial, indirect or potential competition with each other.” Tax on Wine & Beer – Not similar – but in competition – can be taxed differently, but not so differently to provide domestic protection.

Past Papers

Runners Ltd produces crisps and other potato-based snacks at its factories in the north of England. The company exports approximately half of its production, mostly to the EU. The company’s marketing department have reported that several EU Member States have recently introduced legislation that might impact on the ability of Runners Ltd to continue selling its products in those countries: (a) Austrian legislation bans the sale of crisps and other snacks from vending machines. (b) Belgian legislation requires crisps to be sold in plain, black packaging with just the brand name and flavour shown on the front. (c) Croatian legislation imposes a sales tax of 10% on crisps and other, potatobased snacks. However, the tax does not apply to popcorn. The vast majority of crisps sold in Croatia are imported whereas around half of the popcorn consumed in Croatia is produced domestically. (d) Danish legislation reserves the use of the word “crisps” to potato-based snacks that are no more than 0.2cm thick. Any snacks that are thicker than that will have to be sold as “tykke kartoffel skiver” (“thick potato discs”). (e) Estonian legislation requires the packaging of crisps and other snacks to be recyclable. This legislation currently only applies to imported products. The Austrian, Belgian and Croatian governments have issued press statements to the effect that the new legislation is designed to promote a healthier eating culture, particularly amongst young people, by discouraging demand for products which are high in fat and/or salt. The Danish government has explained that its legislation is designed to help consumers distinguish between the different types of snack. Runners Ltd is concerned about all of this new legislation because market research has shown that its biggest selling brand, “Big Fat Crisps”, is particularly popular with teenagers, is at least 0.4cm thick and is packaged in non-recyclable metallised plastic. 1. Advise Runners Ltd as to the compatibility of the above legislation with EU Law on the free movement of goods. [35 marks]

1. The most recent general election in Sweden saw the Green Party elected into government for the first time with a strong manifesto commitment to “Making Sweden the World’s

Cleanest Environment”. The newly-created Swedish Ministry for the Protection of Natural Resources is determined to make an impact. It has announced the following proposals for new legislation: a) A ban on the use of air fresheners. This follows reports in scientific journals in the USA that they contain phthalates (chemicals that cause hormonal abnormalities, reproductive problems and birth defects). b) A ban on the advertising of “single-use” bottled water. This was said to be necessary to reduce the amount of waste plastic. c) As an alternative to (b), a ban on the TV advertising of “single-use” bottled water.

d) The compulsory inspection of all imported motor-vehicles to ensure that they comply with tough new pollution and safety standards. e) A sales tax on fireworks. The Ministry is concerned about the disturbance of reindeer and other indigenous wildlife caused by the explosions, noise and smoke, and hopes that the tax will discourage their use. The new tax will affect both Swedish-made and imported fireworks sold in Sweden, but the rate of tax will differ: 30 Swedish krona (about £2.50) will be added to the price of imported fireworks and 15 Swedish krona (about £1.25) will be added to the price of fireworks made in Sweden. The Minister has explained that Swedish fireworks are already more expensive than imports because Swedish manufacturers use the purest gunpowder in the world. Consider the compatibility of the above proposals with EU law on the free movement of goods. [35 marks]

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Assume that a new Estonian government has been elected on the basis of its “ecofriendly” manifesto promises. The new government indicated in its manifesto that it would take the following measures: (a) Impose a ban on the importation of all genetically-modified (GM) agricultural products. (b) As an alternative to (a), impose a tariff on the importation of GM products, in order to fund further research into the subject. (c) Impose a ban on any advertising of weedkillers and pesticides, in order to discourage consumer demand. (d) Restrict the sale of cleaning products such as bleach to persons aged 21 or over. Consider the compatibility of the above proposals with EU law on the free movement of goods. [25 marks]

1. The Portuguese government is concerned about increasing obesity amongst Portuguese nationals, especially children. It has decided to introduce the following legislation:

(a) A ban on the importation of processed-meat products (such as burgers and sausages) which exceed a government-specified maximum level of saturated fat. The government has stated that it only intends to ban imported products, following assurances from the trade body representing Portuguese meat producers that their products fall below the maximum level. (b) A ban on the display of chocolates and biscuits near to supermarket checkouts. (c) A ban on the use of packaging for chocolates and biscuits which might appear attractive to children, such as the use of cartoon characters. (d) The imposition of a sales tax on carbonated soft drinks containing more than a specified amount of sugar. The tax would not apply to the sale of milk-based drinks such as lattes or milkshakes, although the government has acknowledged that such drinks can contain comparable amounts of sugar.

Consider the compatibility of the above with EU law on the free movement of goods....