Solicitors Qualifying Examination

Free Movement of Goods | EU Law – SQE1 & SQE2 Examinations – solicitorsqualifyingexamination.net

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Free Movement of Goods
The internal market – 4 freedoms (Article 26(2) TFEU):
1. Goods
2. Persons
3. Services
4. Capital
Goods
• Commission v Italy (‘Italian Art’) – CJEU: ‘products which can be valued in
money and which are capable, as such, of forming the subject of
commercial transactions’
o Includes: objects of artistic, historic, archaeological or
ethnographic interest
Customs Union
2 Principles (Article 28(1) TFEU):
• ‘Free trade area’ – goods pass between countries without the imposition
of restrictions such as customs duties – internal aspect
• ‘Common customs tariff’ on goods from outside customs union – external
aspect
Treaty Provisions
1. Article 30 TFEU prohibits customs duties and charges having equivalent
effect.
2. Article 110 TFEU prohibits discriminatory taxation.
3. Articles 34, 35 and 36 TFEU prohibit quantitative restrictions and all
measures having equivalent effect (Articles 34 and 35), and permissible
derogations from this prohibition (Article 36).
© Liam Porritt 2020 2
Article 30 TFEU – Customs Duties and CEEs
• Customs duties (inc. of a fiscal nature) and charges having equivalent
effect on imports and exports prohibited between MSs (Commission v Italy
(‘Italian Art’)).
o NB: for imports, Article 30 applies where charge is levied by
reason of importation against an imported product to the
exclusion of similar domestic products (Dansk Denkavit ApS v
Danish Ministry of Agriculture)
§ Facts: Charge for checking foodstuffs (both imported and
domestic) with additives = Art 110 internal system of dues,
not CEE
• Customs duties often paid by importer or exporter to State, but not
necessarily
• Effect of a charge cannot be to hinder import or export of goods by
imposing pecuniary burden
• Article 30 has DE, as replaces Article 12 EEC (Van Gend en Loos)
• Charges having equivalent effect = CEEs ~ generally for providing some
service, rather than simply crossing the border
• Commission v Italy (‘Statistical Levy’): levy imposed by Italy on imports
and exports for collecting accurate statistical material relating to trade
patterns = prohibited by Article 30
o CEE: ‘Any pecuniary charge… which is imposed unilaterally on
domestic or foreign goods by reason of the fact they cross a
frontier and which is not a customs duty’
o Strictness: Sociaal Fonds voor de Diamantarbeiders v Chougol
Diamond Co – charge not protectionist and for social security
benefits for diamond workers, but still CEE! => no derogation
© Liam Porritt 2020 3
Charges ≠ customs duty or CEE
Commission v Germany (‘Animal Inspection’) [1988]:
Not CD or CEE where:
1. It ‘relates to a general system of internal dues applied systematically and
in accordance with the same criteria to domestic and imported products’
alike.
• Internal tax = governed by Article 110 ~ Internal tax and CEEs
mutually exclusive systems (Aldons Lütticke GmbH v Hauptzollamt
Saarlouis)
2. It constitutes payment ‘for a service in fact rendered to the economic
operator [i.e. importer or exporter] of a sum in proportion to the
service’
• (1) Statistical Levy + Bresciani v Amministrazione Italiana delle Finanze
– Where a specific benefit is conferred on importers and exporters ≠
CEE
o Facts: charge in respect of vet inspections of cow hides in the
national interest = CEE b/c no specific benefit
• (2) Commission v Belgium (‘Customs Warehouses’) – service provided
at request of importer ≠ CEE
o Facts: charge for storage when presenting goods for
compulsory customs clearance = CEE, as no benefit or request
3. It ‘attaches to inspections carried out to fulfil obligations imposed by
Community law’.
• Bresciani – cost of inspection in its own national interests = CEE
• Commission v Germany {‘Animal Inspections’) – Charge for inspection
required by EU law not CEE
o Charge must not exceed actual cost of inspections
o Inspections obligatory and uniform for all relevant products
o Prescribed by EU law in general interest of Union
o Inspections promote the free movement of goods, neutralizing
obstacles from unilateral inspection measures
• Commission v Netherlands [1977] – not CEE where obligation to
inspect imposed on all MSs by international treaty encouraging free
movement of goods
© Liam Porritt 2020 4
Article 110 TFEU – Discriminatory internal taxation
• Has DE (Alfons Lütticke GmbH v Hauptzollamt Saarlouis)
• Designed to eliminate internal fiscal barriers to trade:
1. No Member 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.
2. Furthermore, no Member State shall impose on the products of other
Member States any internal taxation of such a nature as to afford indirect
protection to other products.
Scope of Article 110 (different from Article 30!)
• Commission v France (‘Reprographic Machinery’) – Tax regulated by
Article 110 = ‘relates to a general system of internal dues applied
systematically to categories of products in accordance with objective
criteria irrespective of the origin of the products’ (as opposed to
charges for crossing a frontier)
o Dansk Denkavit – charge applied to all products containing
additive, although money raised used for testing foreign goods
• Article 110 and Article 30 mutually exclusive (Lütticke)
• Article 110 (different from Article 30): internal tax permissible as long as:
o Does not discriminate against imports (Art. 110(1))
o Not protectionist (Art. 110(2))
• Reprographic Machinery – irrelevant if domestic production is negligible
or non-existent. As long as due applied to whole category, irrespective of
origin, it is governed by Article 110.
• Charges on both domestic and imported goods, made solely because of
crossing boarder = Article 30 CEE / CD
Similar Goods (Article 110(1))
Similar?
Test (Rewe-Zentrale des Lebensmittel-Großhandels GmbH v Hauptzollamt
Landau/Pfalz):
• At same stage of production or marketing…
• … products had similar characteristics (objective) AND…
• … met the same needs from the POV of consumers (Commission v
Denmark).
Basis is on similar or comparable use (Commission v France (‘Spirits’)).
Compare:
© Liam Porritt 2020 5
• Commission v Denmark – wine made from fruit or grapes are similar
goods
• John Walker & Sons Ltd v Minsteriet for Skatter og Afgifter – whisky and
fruit liqueur not similar goods as manifestly different characteristics;
even if they had had similar modes of consumption (aperitif), this is not
enough in itself
Discrimination
• Imported goods subject to same rate of taxation as similar domestic goods
• Treated equally with domestic goods in respect of taxation procedures,
modes of assessment and detailed rules of application (Commission v Italy
[1980]).
Direct Discrimination
• Overt treatment of imported goods less favourably than domestic goods
• Irrelevant whether it is practicable for taxation applying to domestic
goods (e.g. regenerated vs normal oil) to apply to imported goods (i.e.
cannot check if imported oil is regenerated or not), taxation cannot
discriminate against imported goods (i.e. by regenerated/normal
distinction only applying to domestic oil) (Commission v Italy
(‘Regenerated Oil’)).
Indirect Discrimination
• Disadvantages imported goods in practice, although it makes no overt
distinction between domestic goods and imported goods
• Undermines competitive advantage imported goods would have had
• Commission v Denmark – no overt distinction between domestic and
imported goods, instead between grape and fruit; however, Denmark
produced no wine from grapes = practical effect that only imported wine
subject to higher rate of tax
• Humblot v Directeur des Services Fiscaux – French taxation: cars under
16CV up to 1100 Francs; over 16CV = 5000 Francs. No French cars over
16CV, therefore discrimination against large engine cars, which are all
imported, because tax cancelled out competitive advantage of imported
goods.
• Commission v Greece – similar, but here, top tier all imported, but so was
next tier, and so highest rate tax band was not deemed to disadvantage
imported cars vs. domestic cars; lowest-rate cars both imported and
domestic. Disparity in levels of taxation also less severe than in Humblot
o Multiple tiers + less disparity between taxation of different tiers +
social justification for tiering (earnings of people) = not
discriminatory
© Liam Porritt 2020 6
• High levels of taxation only relevant where discriminatory or
protective effect (Commission v Denmark (‘Registration Duty’) – not
breach where levels of tax are just high!)
Justifying indirectly discriminatory taxation
• Indirectly discriminatory taxation may be justified (Chemical
Farmaceutici SpA v DAF SpA):
o Differentiation on the basis of objective criteria
o Differentiation pursues economic (and other (Commission v Greece
– social)) policy objectives, compatible with treaty and secondary
law
o Detailed rules avoid discrimination (direct or indirect) or
protection of competing domestic products
© Liam Porritt 2020 7
Non-Similar Goods (Article 110(2))
Indirect protection to domestic products
Commission v France (‘Spirits’)
• Partial, indirect or potential competition with products in importing
country?
• Protection for domestic products?
• If one product rendered more expensive, are consumers likely to switch
to the other product?
• Higher tax on cereal-based spirits than wine-based spirits
• Evidently in at least partial or potential competition
• As majority of cereal-based spirits imported, protection of domestic
spirits
Commission v UK (‘Wine and Beer’)
• 102% increase in duty on wine vs. 59% on beer
• Beer and cheap wine in competition
• Tax burden on wine considerably greater than on beer
• Make wine ‘luxury’ and prohibit it from being a genuine alternative to
beer, thus reducing imported product consumption to advantage of
domestic product = protection, so must remove protective effect
Commission v Belgium
• Retail price of wine in Belgium 4x beer
• 6% VAT difference not influencing customer behaviour, and therefore
protective effect in favour of beer
Equalisation
• Article 110(1) – requires equalisation
• Article 110(2) – no need for equalization, just remove protective effect
that was acting in favour of domestic products
© Liam Porritt 2020 8
Articles 34 – 36 TFEU – Non-fiscal barriers
Summary
Art. 34 + 35 TFEU
• 34 imports
• 35 exports
• Quantitative restrictions – total (ban) or partial restraint (quota)
• MEQRs
o Distinctly Applicable – asking additional requirements for nondomestic products / promoting domestic goods
o Indistinctly applicable – CHANGE PRODUCT – Measures apply
equally to domestic and non-domestic goods – e.g. Belgium:
margarine must be in cubes – burden on non-domestic producers
excessive
• 6 derogation grounds under Art 36 can justify quantitative restrictions as
long as proportional
o Ditto Distinctly Applicable
o Indistinctly Applicable – Art 36 and/or mandatory requirements
(rule of reason – can create additional derogation grounds e.g.
consumer protection etc.)
• Kerk test – selling arrangement – not change to product, but sold
according to criteria (e.g. not to people under 12)
© Liam Porritt 2020 9
Article 34
Binding Force
• Binding on:
o MSs
o Public bodies in MSs
o Quasi-public bodies – e.g. R v Royal Pharmaceutical Society of Great
Britain, ex p. Association of Pharmaceutical Importers
• Not on private bodies and individuals; however…
o Commission v Ireland (‘Buy Irish’) – MS establishes private
company to promote Irish goods ~ in this case, MS cannot rely on
campaign being conducted by private company to escape liability
under Art 34
o Commission v France (‘Spanish Strawberries’) – MS in breach of Art
34 where does not take measures to prevent free movement being
obstructed by individuals (here, over a decade of violence against
importers by French farmers)
Quantitative Restrictions
• Geddo v Ente Nazionale Risi: ‘measures which amount to a total or partial
restraint… of imports, exports or goods in transit’
• Total restriction = ban = R v Henn and Darby (ban on import of
pornographic material = statutory offence breached Art 34)
• Partial restraint = quota = International Fruit Company NV v Produktschap
voor Groenten)
• May be derogated under Art 36
MEQRs – Measures having equivalent effect to quantitative restrictions
Directive 70/50
• Applies only to national measures in place at the time of the EEC Treaty
signing
• Distinctly applicable measures (DAMs) – do not apply equally to
domestic and imported goods
o Different requirements for imported and domestic goods
o Advertisements to promote domestic goods ~ Buy Irish
• Indistinctly applicable measures (IAMs) – apply to domestic and
imported goods, but place imported goods at a disadvantage in practice
(but not always – can be potential)
© Liam Porritt 2020 10
Procureur du Roi v Dassonville + the widening of MEQR scope
• (1) Trading rule (2) adopted by MS (3) capable (actual or potential
effect) of hindering trade between MSs (not just within MS) = MEQR
o Buy Irish – only need to have potential to hinder trade between
MSs, not necessarily actually happen
• Definitely applied to DAMs, as they clearly hinder trade between MSs
o Commission v France (‘Spanish Strawberries’) – ‘trading rule’
widened to include lack of measures by France to prevent violence
of individuals obstructing free movement of goods
o Commission v Ireland (‘Buy Irish’) – Art 34 not confined to binding
measures adopted by MS, but also applies to promotional
campaign launched (through private company) by government of
MS
• Confirmed as applying to IAMs in Rewe-Zentral AG v
Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
Distinctly Applicable MEQRs
• Additional requirements on imported goods – Firma Denkavit Futtermittel
GmbH v Minister für Ernähgrung – for imported animal products,
certificate confirming heating process on milk to kill salmonellae +
inspection by veterinary institute = requirements not on domestic milk
• Restricting channels through which goods can be imported – Dassonville –
goods w/ designation of origin required certificate of origin (Scotch
whisky imported from France to Belgium, but this is hard to get when not
coming from Scotland directly) = MEQR
• National rules giving preference to domestic goods – Buy Irish – campaign
to promote Irish goods
o Commission v Ireland (‘Irish Souvenirs’) – require foreign-made
souvenirs carrying ‘Irish’ connotations (e.g. shamrock) to have
place of origin + ‘foreign’ = MEQR; but domestic goods could
include the place of manufacture
o However, Agricultural produce – Regulation 1151/2012 – grant
Protected Geographical Indication (PGI – geographical source of
product) + Protected Designation of Origin (PDO – method of
manuafcture) – e.g. Feta cheese – MSs required to ensure that only
products with PGI/PDO use product names.
© Liam Porritt 2020 11
Indistinctly Applicable MEQRs
Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon)
• Germany: 25% alcohol for fruit liqueurs
• Cassis de Dijon = 15%-20%
• 25% requirement = MEQR because negatively impacted on import of
foreign liqueur => dual burden
• Principle of mutual recognition: imported goods only need to comply
with regulatory regime of home MS – if they do, can be imported
(irrespective of national legislation) – this avoids ‘dual burden’ of
different reg. regimes
• See Walter Rau (margarine cubes) and Relabeling Cocoa below.
QR + MEQR Derogations – Article 36
• Apply unless:
o Measure of MS = arbitrary discrimination or a disguised restriction
on trade
o Measure not proportionate
§ Must be suitable to attain objective pursued by derogation
§ + not further than necessary to achieve objective
1. Public morality;
o Henn and Darby – UK ban on porn, derogation allowed – each MS
decides what are requirements of public morality + no lawful trade
in such goods in UK (so not arbitrary)
o Conegate v Hm Customs & Excise Commissioners – Love-love dolls –
could be made in UK, so their import should also be allowed
(otherwise arbitrary discrimination)
2. Public policy;
o Narrow – 1 successful case
o R v Thompson – UK ban on export of silver coins to avoid being
melted down (alongside same UK measure) – protect right to mint
coinage = fundamental interest of society, so allowed
o Cullett v Centre Leclerc Toulouse – failure to show that minimum
price on oil (cancelling competitive advantage of imported oil)
necessary as there would be threat to public order and security if
unrestricted competition for local retailers (= public policy
grounds)
© Liam Porritt 2020 12
3. Public security;
o Campus Oil Ltd v Minister for Industry and Energy – Oil refinery
close to closing, so bought by Irish government + order made for
importers of petroleum to buy at least 35% from this plant =
MEQR, but justifiable because necessary to ensure existence of
refinery on national territory, important because interruption in
supply of petroleum = affects public services + risks life
o Commission v Greece – must prove that such measures are
necessary – here, Greece failed to do so (i.e. measures governing
purchase of oil from State not necessary for existence of refineries)
o Cullett v Centre Leclerc Toulouse – failure to show that minimum
price on oil (cancelling competitive advantage of imported oil)
necessary as there would be threat to public order and security if
unrestricted competition for local retailers
4. The protection of health and life of humans, animals or plants;
o Commission v Germany (‘Beer Purity’) – must be objective
evidence of danger – ban on additives – but these were used
elsewhere, and no evidence that dangerous, so not allowed
o Criminal Proceedings Against Sandoz BV – limited/inconclusive
scientific evidence may be sufficient – excessive vitamin
consumption harmful (but no evidence on quantities); so ban on
foods with added vitamins accepted
o Commission v UK (‘Imports of Poultry Meat’) – must be genuine;
here ban = disguised protection of import due to pressure on
domestic producers
o Criminal Proceedings Against Bluhme – Læsø island, brown bee
protection = ban on any bees except this one due to endangerment
o PreussenElektra AG v Schleswag AG – electricity distributors must
buy renewable energy from sources in area of supply in Germany
at fixed minimum prices – allowed b/c protection of life
§ Also: Art 11 TFEU = environmental protection to be
integrated into definition/implementation of other
Community policies
• Aklagaren v Mickelsson and Roos – Prohibition of use of waterskis in many
places = greatly limited interest in buying them, so MEQR, BUT justifiable
under environmental protection + proportionate
5. The protection of national treasures possessing artistic, historic or
archaeological value; or
6. The protection of industrial and commercial property.
© Liam Porritt 2020 13
Mandatory Requirements – derogation of Indistinctly applicable MEQRs
• Cassis de Dijon – mutual recognition can be rebutted by Article 36 or MR
• MEQRs accepted if necessary to satisfy mandatory requirements
o Effectiveness of fiscal supervision
o Protection of public health
o Fairness of commercial transactions
o Defence of consumer
o Protection of cultural activities – Cinéthèque v Fédération Nationale
des Cinémas Français (here, ban on the sale or hire of video-films in
first year after a film’s release)
o Protection of environment – Commission v Denmark (‘Disposable
Beer Cans’) (here, requirement that beer cans be a standard size to
enable them to be recycled)
o Treaty obligations, e.g. Freedom of expression – Schmidberger v
Republik Österreich (here, closing road in environmental protest)
• Must be proportionate
• In CdD – rejected arguments that lower alcohol content would lead to
alcoholism – other similarly alcoholic products were sold
• Only apply to IAMEQRs – Criminal Proceedings Against Gilli and Andres +
Irish Souvenirs
Application of CdD
• Walter Rau Lebensmittelwerke v de Smedt PvbA – margarine has to be in
cubes in Belgium = IAM ~ argue that necessary for protection of
consumer from confusion between butter and margarine – rejected as
disproportionate – labeling could just as effectively be used
• Commission v Italy (‘Relabeling of Cocoa Products’) – in Italy, use of
vegetable fats other than cocoa in chocolate requires word ‘substitute’ =
MEQR as hinders import of foreign chocolate; it does put Italian chocolate
at a disadvantage (reverse discrimination), but this is not point of Art 34
© Liam Porritt 2020 14
Selling Arrangements
• Who, when, where and how selling takes place
• Many decisions interpreting measures as MEQRs criticised, as these
measures did not impose ‘dual burden’ on imported goods, as the burden
is same on domestic and imported goods
Distinguishing product requirements (MEQRs) from Selling Arrangements
• What if promotional material included on packaging / content of product?
• Verein gegn Unwesen in Handel und Gewerbe Köln v Mars GmbH – wrapper
= part of the product = MEQR
• Vereinigte Familiapress Zeitungsverlags und Vertriebs GmbH v Bauer
Verlag – prohibition on sale of magazines with competitions + big-money
prizes ~ German company sells magazines with competition ~ contents of
magazine would have to be altered, therefore: MEQR
Selling Arrangements
Criminal Proceedings Against Keck and Mithouard
• Clarifies that CdD applies only to cases where measures lay down rules
about nature of product
• Selling arrangement not MEQR if:
1. Apply to all affected traders operating within the national
territory
2. Affect in the same manner in law and in fact the marketing of
domestic and imported products
• Punto Casa v Sindaco del Commune di Capena – Sunday trading rules =
apply to all traders + equally affect domestic and imported products – no
need for justification under derogations, as now Art 34 simply does not
apply
• Ditto in Tankstation – closing of petrol stations at night affects equally
domestic and imported goods
• Stoke-on Trent CC v B&Q – justify ban on Sunday trading under MR =
socio-cultural protection of Sunday
• Oosthoek – ban on free gifts (here, free dictionary, atlas or encyclopaedia
with encyclopaedia subscription) = MEQR as may be an obstacle to
marketing of imported goods, but justified in the protection of the
consumer
• Cinétheque – MEQR, but justified to protect cinematic production
© Liam Porritt 2020 15
Selling arrangements that fall within Art 34 under Keck Test
• Fachverband de Buch und Medienwirtschaft v LIBRO Handelsgesellschaft
mbH – Austrian law: minimum price for imported German language books
(note: not fiscal as not a duty on sale, but question of price of item at sale)
o Part of law applied only to imported books – therefore, MEQR
Adverts
• Konsumentombudsmannen v De Agostini (Svenska) Förlag AB – if a ban on
advertisements (e.g. to children under 12) has greater impact on
non-domestic products than on domestic products, can be MEQR
• Konsumentombudsmannen v Gourmet International Products Aktiebolag –
ban on alcohol adverts, unless in magazine distributed at point of sale of
beverage – HELD: IAMEQR b/c consumers more aware of domestic
alcohol than foreign, so greater impact on foreign producers
• Herbert Karner Industrie – Auktionen v Troostwijk GmbH – proportional
ban in limited circumstances (on adverts for auctions with goods from
insolvent estate), equally affecting imported and domestic goods.
Restrictions on the use of products
• Can be either a DAMEQR (if ban on product from a MS) or more likely an
IAMEQR (if ban / restriction on the use of a product)
• Art 34 applies to goods not sold, but also to goods that are free – may be
kept, prepared, transported within MS, or offered etc, not just sold
(Nationale Raad van Dierenkwekers en Liefhebbers VZW v Belgium)
• Commission v Italy (‘Trailers’) – any measure which hinders the access to
the market of a Member State – prohibition of trailers with motorcycles =
restriction on free movement of trailers designed for motorcycles
o MEQR, but could be justified
• Aklagaren v Mickelsson and Roos – Prohibition of use of waterskis in many
places = greatly limited interest in buying them, so MEQR
o Justifiable under environmental protection + proportionate
• Any measure that hinders access to a market of a MS –i.e. having
potential to reduce volume of trade between MSs – may be MEQR
o No need for imported goods to be placed at greater disadvantage
than domestic goods!
o Keck test still applies to SAs though
© Liam Porritt 2020 16
Article 35 – Restrictions on Exports
• Mirror image of Art 34 – applies to exports
• Quantitative restrictions
o R v Thompson – silver coin export ban
o Refusal to grant export licence – R v Ministry of Agriculture,
Fisheries and Food ex p Hedley Lomas (Ireland)
• Distinctly applicable = measures apply differently to goods marketed in
MS to goods exported from MS
o Procureur de la République de Basançon v Les Sieurs Bouhelier –
requirement of certificate for watches exported, but not required
for watches sold in France = MEQR
• Indistinctly applicable – reluctance to apply
o P.B. Grenveld BV v Produktschap voor Vee en Vlees – no stock of
horsemeat in Netherlands’ meat production to prevent its
accidental export to places where banned (even if producer only
sold in Netherlands) – Article 35 only applies where object or
effect of restriction = difference between treatment of products
domestically traded and products to be exported, leading to
advantages for national production or domestic trade + expense of
production / trade of other MSs
o Here, we have same burden on goods being exported from MS
as on goods being marketed within MS
• IAMs can create disadvantage for exported goods though…
o Criminal Proceedings Against Gysbrechts – Belgian rule not
permitting taking of credit card details, as infringed on rule against
taking deposit/payment before end of 7-day period = deprived
traders of efficient means of ensuring non-payment, greater for
foreign transactions (due to difficulty of legal proceedings) –
therefore, hindered exports, so MEQR
• Currently, Art 35 approach still based on disadvantage of exports vs
internally conducted transactions ~ but may shift, as has been case with
Art 34, towards applying when measures act as obstacle to free
movement of goods by hindering access to those goods to the market.
o Not for now, however!

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