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EU Law of Free Movement of Goods and Customs Union

EU Law of Free Movement of Goods and Customs Union

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This work gives a practical overview of the legal aspects of the Free Movement of Goods and the working of the Customs Union within the European Union and their interpretation and application by the Court of Justice of the European Communities. The essential purpose of the free movement of goods and customs provisions of the EC Treaty is to contribute to the establishment of a common market that will ensure, amongst other things, free trade in goods between member states. The free movement of goods is the primary pillar on which the internal market within the European Community - the heart of the EU - is based. This book analyses the operation of the customs union, with detailed treatment of the Community Customs Code and its implementing and associated measures. It also discusses the elimination of customs duties and charges having equivalent effect, and the elimination of quantitative restrictions and measures having equivalent effect in trade between Member States. It concludes with coverage of state monopolies of a commercial character, and the nuclear common market. It derives from a section in the looseleaf Law of the EU (Vaughan and Robertson, eds), and is made available here for the benefit of those who do not subscribe to the looseleaf.

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Free movement of goods

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One of the keystones of the European Union (EU) internal market is the principle of the free movement of goods – the creation and development of an area without internal borders, where there are no unjustified restrictions to trade between EU Member States. The free movement of goods is one of the four fundamental economic freedoms laid down in the EU founding treaties, the other three being the free movement of capital , services and people .

The free movement of goods in the EU has been achieved by:

  • eliminating customs duties on imports and exports, and all charges having an equivalent effect;
  • prohibiting quantitative restrictions (quotas) on imports and exports, and measures having an equivalent effect (essentially, all trading rules enacted by Member States, which could directly or indirectly, actually or potentially hinder trade within the EU); and
  • removing non-tariff barriers by harmonising national legislations, eliminating barriers arising from divergent national rules by agreeing common rules, to guarantee both the free movement of goods and to respect other EU objectives, such as environmental and consumer protection.

To avoid the long process of negotiating detailed harmonised rules, the EU adopted what is known as the ‘new approach’ to harmonisation, proposed in the European Commission’s 1985 White Paper on the completion of the internal market, the guiding principle being the principle of mutual recognition of goods lawfully marketed in one Member State. Legislative harmonisation is limited to agreeing on essential (performance or functional) requirements, while technical specifications for products meeting the essential requirements are be laid down in harmonised voluntary standards. Goods meeting these requirements can be marketed throughout the EU.

The legal bases for EU legislation on the free movement of goods are laid down in Title II – Free Movement of Goods – Articles 28 to 37 of the Treaty on the Functioning of the European Union (TFEU).

  • Competition
  • Consumer protection
  • European Commission
  • European Union
  • Free movement of capital
  • Free movement of services
  • Free movement of workers
  • Internal market
  • White Paper
  • Accessibility of products and services (summary)
  • Accreditation and market surveillance (summary)
  • Mutual recognition in the EU’s single market (summary)
  • Mutual recognition of goods (summary)
  • Product safety: general rules (summary)
  • Uniform conditions for the marketing of safe products in the EU (conformity marking) (summary)
  • Single market for goods – website (European Commission).

eu law essay free movement of goods

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eu law essay free movement of goods

Chapter 5 Outline answers to essay questions

'The free movement of goods is an essential element of the internal market and both EU legislation and the decisions of the Court of Justice support the achievement of this aspect of economic integration. However, the EU internal market is imperfect, so far as goods are concerned. There remain impediments to free movement which are not only embedded in the legislation but also arise from the case law of the Court of Justice.'

In the light of this statement, critically discuss the extent to which EU legislation and the case law of the Court of Justice ensure the free movement of goods in the internal market.

Introduction

  • The internal market, four freedoms, Article 26 TFEU.
  • Free movement of goods is a fundamental EU principle and key to economic integration.

Ensuring the free movement of goods – EU legislation and the case law of the Court of Justice

  • Article 30: tariff barriers – customs duties/CEE.
  • Article 34/35 non-tariff barriers – quantitative restrictions/MEQRs.
  • Article 110 discriminatory taxation.
  • The Court of Justice interprets the provisions broadly, in support of economic integration.
  • Positive integration: the harmonization programme; principle of mutual recognition.

Article 30: prohibition of tariff barriers to trade

  • Customs duties (define,  Diamonds ) – easily identified so unlikely to occur.
  • Scope of tariff barriers drawn widely by inclusion of CEEs (define,  Diamonds ).
  • Charges must satisfy benefit to importer ( Statistical Levy ) and proportionality ( Customs Warehouses ) – narrowly drawn conditions – to fall outside Article 30
  • No derogation in relation to Article 30.
  • Protectionist intent is irrelevant in relation to Article 30 – freedom of cross-border trade is paramount ( Diamonds ).

Article 34: prohibition of non-tariff barriers to trade

  • Scope of non-tariff barriers is wide, comprising quantitative restrictions and all measures having equivalent effect (Article 34 on imports).
  • Quantitative restrictions include both import/export quotas and bans ( Geddo ).
  • Court of Justice – wide definition of MEQRs –  Dassonville  'all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade' – also Directive 70/50 covering both distinctly (eg  San Jose Scale ,  Dassonville ) and indistinctly applicable measures (eg  Cassis ,  Walter Rau ).
  • Note, however, the proviso on 'reasonable' restraints that is pursued later in  Cassis de Dijon.
  • However, the Court of Justice has placed limits on the scope of 'MEQR'.  Keck provides that 'selling arrangements' having no greater impact on imports than on domestic products fall outside Article 34. Note subsequent cases on 'selling arrangements':  Tankstation 't Heukske  (shop opening hours),  Commission  v   Greece (restrictions on the kinds of retail outlets from which certain goods can be sold),  De Agostini  (product advertising).

  Article 110: prohibition of discriminatory internal taxation

  • The recognition that restrictions can arise from charges/levies/taxes that are imposed other than by virtue of importation. Prohibition of discriminatory internal taxation (Article 110) – systems of internal dues – ( Denkavit  definition).
  • Court of Justice held that Article 110 covers both direct discrimination ( Lütticke ) and indirect discrimination ( Humblot ).
  • Paragraphs 1 and 2 together have wide scope – equal taxation for 'similar' products (paragraph 1) – no advantage to domestic products where similarity cannot be established but nevertheless products are in competition (paragraph 2).

Harmonization: positive integration

  • Harmonization: elimination of disparities between national product standards hindering interstate trade – sets binding EU-wide standards.
  • Harmonizing measures preclude further restrictions by Member States in the relevant area.

Exceptions/impediments to free movement of goods

Article 36 derogation and  Cassis

This part of the answer requires a full analysis of the Article 36 derogation and the  Cassis principles. You should draw out the similarities and differences and underline the heavy burden on states seeking to derogate. Like all exceptions from the from the free movement rules, the provisions are interpreted restrictively by the Court of Justice. The following points should be included:

  • Exceptions apply only where there are no EU harmonizing measures covering the interest concerned.
  • Exceptions apply to Article 34 only – no justifications for breaches of Article 30, though possible to exclude charges from scope of Article 30.
  • Court of Justice has accepted objective justification of indirect taxation, but this is outside scope of Article 36,  Cassis  and considered below.
  • Both distinctly and indistinctly applicable measures may be justified – note the scope of Article 36 and  Cassis,  respectively, here.
  • The Court of Justice requires evidence of the risk/threat (eg  San Jose Scale ).
  • Article 36 grounds (set them out) are apparently wide but have been interpreted restrictively – the list is exhaustive ( Irish Souvenirs ).
  • Article 36 – proportionality requirement often an insurmountable hurdle for Member States (eg  Beer Purity ).
  • Article 36 – a further requirement – there must be no arbitrary discrimination/disguised restriction on trade – catches protectionist motives ( Turkeys ).
  • Cassis  – mutual recognition is the underlying assumption supporting the free movement of goods – like harmonization, it provides for positive integration – the assumption is set aside only by proportionate justifications.
  • Cassis  – rule of reason – mandatory requirements wider than Article 36 grounds in that the list has been extended by the Court of Justice: includes environmental protection ( Danish Bottles ), legitimate interests of economic and social policy ( Oebel ) and national and regional sociocultural characteristics ( Torfaen Borough Council ).
  • Cassis : indistinctly applicable measures only; they must be proportionate.

Objective justification of discriminatory taxation

  • ECJ has accepted the principle of objective justification for indirectly discriminatory taxation (eg  Chemial Farmaceutici ) but no systematic formulation of policy, by contrast to the Article 36 exceptions.

Free movement of goods is secured both by deregulation and positive integration. The scope of unlawful restriction is drawn widely by the Court of Justice, in support of economic integration, though in  Keck  the Court laid down limits to Article 34. Whilst certain kinds of restriction are permissible, the Court interprets these narrowly and they must always be proportionate to their objective.

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Steiner & Woods EU Law

Steiner & Woods EU Law (14th edn)

  • Guide to the Online Resources
  • Abbreviations
  • Table of cases
  • Table of legislation
  • 1. From EEC to EU: a brief history of the development of the Union
  • 2. Institutions of the Union: composition and powers
  • 3. Scope of the EU Treaty: laws and lawmaking
  • 4. Principle of supremacy of EU law
  • 5. Principles of direct applicability and direct effects
  • 6. General principles of law
  • 7. Framework for enforcement
  • 8. Remedies in national courts
  • 9. State liability
  • 10. The preliminary ruling procedure
  • 11. Enforcement actions
  • 12. Direct action for annulment
  • 13. Union liability in tort: action for damages
  • 14. Introduction to the internal market
  • 15. Harmonisation
  • 16. Customs union
  • 17. Free movement of goods
  • 18. Free movement of payments and capital
  • 19. Citizenship: rights of free movement and residence
  • 20. Economic rights: workers, establishment and services
  • 21. Free movement: social rights
  • 22. Right to receive services
  • 23. Free movement of persons: limitations on grounds of public policy, public security or public health
  • 24. The Area of Freedom, Security and Justice: EU justice and home affairs law and policy
  • 25. Discrimination
  • 26. Introduction to EU competition policy
  • 27. EU competition law
  • Further reading

p. 375 17. Free movement of goods

  • Marios Costa Marios Costa Senior Lecturer in Law, The City Law School, City, University of London
  •  and  Steve Peers Steve Peers Professor of Law, University of Essex
  • https://doi.org/10.1093/he/9780198853848.003.0017
  • Published in print: 05 August 2020
  • Published online: September 2020

This chapter examines the Treaty provisions designed to ensure free movement of goods within the European Union. It discusses prohibitions on quantitative restrictions, and on measures having equivalent effect to quantitative restrictions (MEQR) in Article 34 of the Treaty on the Functioning of the European Union (TFEU), in particular considering the key cases of Dassonville , Cassis de Dijon and Keck . It also outlines the prohibition on quantitative restrictions on exports and all measures having equivalent effect. It analyses the development of the jurisprudence relating to MEQR, and explains the provisions of Articles 35 (exports) and 37 TFEU (state monopolies). The chapter also addresses the underlying questions concerning the relationship between free movement and national regulatory competence. Finally, the chapter examines the provisions of Article 36 TFEU containing the derogation from the free movement of goods and considers proportionality and disguised restriction on trade. It also discusses the CJ’s jurisprudence on the rule of reason.

  • Article 34 TFEU
  • Article 35 TFEU
  • Article 36 TFEU
  • Article 37 TFEU
  • Dassonville
  • Cassis de Dijon

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How to Get a First in Law

Free Movement of Goods Problem Question Structure

Posted by Catherine Robinson on August 5, 2021

EU Law - EU Substantive Law - Free Movement of Goods Law - Problem Question

This article takes you through the steps that the cjeu goes through when determining whether a measure implemented by an eu member state has breached the treaty provisions on free movement of goods..

how to get a first in law

Basic problem question structure:

  • Is the case within the scope of the EU free movement provisions? 
  • Are the free movement provisions directly effective?
  • Have the free movement provisions been breached?
  • Are there any relevant justifications for the breach?
  • Is the restriction of movement proportional?

The provisions on free movement only apply to cases involving movement between the EU's member states. Wholly internal situations are not within the scope of the free movement provisions, see e.g. Saunders (C-175/78).

2) Direct effect

The provisions on free movement of goods are vertically directly effective, meaning private parties may rely on them against the state. However, they also apply to bodies responsible for certifying products, see Fra.bo (C-171/11), as well as private parties controlled by the state, see e.g. Buy Irish (C-249/81).

Under Article 4(3) TEU, EU member states must co-operate with the facilitation of treaty obligations. This means that they may have to prevent private parties from creating obstacles to free movement of goods, see e.g. Schmidberger (C-112/00) and Commission v France (Spanish Strawberries) (C-265/95).

There are three different types of restrictions on free movement of goods:

  • Distinctly applicable measures: an EU member state implements a measure that directly discriminates on the basis of nationality, e.g. a health inspection for imported products only.
  • Indistinctly applicable measures: the measure has the effect of discriminating against goods from other EU member states even though it does not explicitly appear to discriminate, e.g. product requirements.
  • Obstacles: these measures are non-discriminatory.

Fiscal measures (monetary charges imposed on products)

  • Article 30 TFEU prohibits customs duties and all charges having equivalent effect to a customs duty (CEEs).
  • EU member states cannot justify customs duties or CEEs, see e.g. Diamantarbeiders (C-2/69).
  • Charges will not be CEEs if either:
  • The importer or exporter is being provided with a genuine service in return for the charge, see e.g. Commission v Italy (Statistical Levy) (C-24/68) and Belgium Warehousing (C-132/82); or
  • The charge is for a health inspection, although the test for this is very strict: Bauhuis (C-46/76). See also: Commission v Germany (C-18/87).
  • Discriminating against similar imported goods through taxation.
  • Providing indirect protection to domestic goods that are in competition with imported goods through taxation.

Non-fiscal measures - Article 34 TFEU (measures that are not monetary)

Article 34 prohibits quantitative restrictions and all measures having equivalent effect to a quantitative restriction (MEEs).  Dassonville (C-8/74) set out a very broad formula for what constitutes an MEE. This has since been refined in a series of cases:

Cassis de Dijon (C-120/78) - mutual recognition (+ mandatory requirements). Following Cassis, a distinction was made between:

  • Distinctly applicable MEEs (direct discrimination); and
  • Indistinctly applicable MEEs (indirect discrimination).

Keck (C-267/91) - introduction of a new category of rules: certain selling arrangements (CSAs). These fall outside of the scope of Article 34.

Commission v Italy (Trailers) (C-110/05) and Mickelsson and Roos (C-142/05) -market access test for restrictions on use.

4) Justifications

Justifications are set out in Article 36 TFEU. Another category of justifications called mandatory requirements were set out in Cassis de Dijon .

5) Proportionality test

Two questions:

  • Is the measure suitable to achieve its aim? (Suitability test)
  • Is the measure necessary to achieve its aim, or could a less restrictive measure work? (Necessity test)

In order to write a first class EU Law essay on free movement of goods, you must follow each of these steps.  Please feel free to leave a comment if there's anything you'd like clarifying!

Disclaimer:

The information provided in this blog post is based on the research I carried out for my law degree which I completed in 2020. I accept no responsibility for errors or omissions. Legal principles and interpretations may change over time, and the content presented here may not reflect the most current developments in UK contract law. This information is intended for general informational purposes only and should not be considered as legal advice or relied upon as a substitute for professional legal counsel. For the most up-to-date and accurate legal information or advice, it is advisable to consult with a qualified legal professional who is knowledgeable about the latest legal developments and can provide guidance specific to your situation.

how to get a first in law

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