Law of The European Union: Week 2 Full Notes

Week 2: Goods and Workers
Law of the European Union | LLB International and European Law | Year 2 | Block 1

Lecture 1: Freedom of Movement of Goods

What are goods?
● Case 7/68 Italian Art: “products that can be valued in money and which are capable, as
such of forming the subject of commercial transactions”
○ Case occurred in the late 60s regarding an Italian measure to do with trade of art.
One of the things the Italian government put forward was that it had nothing to do
with free movement of goods, because Italian art does not fall under that ‘lesser’
definition.
○ Court says it does not matter if it's expensive and desirable or not; it is something
that fits the court’s definition, therefore it must be seen as a good.
○ However, this definition does not answer all questions.
● C-97/98 Jägerskiöld: “tangible physical characteristics”
● Outside of this, waste, electricity, human corpses etcetera are included in what is known
as ‘goods’.

Customs Union


Internal Dimension External Dimension

● Customs duties and charges that ● Common Customs Tariff → tax on a
have equivalent effect are prohibited good crossing a border (31 TFEU)
(28 + 30 TFEU) ● Common Commercial Policy (207
○ Article 30 prohibits every TFEU)
customs duty of a fiscal nature
○ These two provisions are
mutually exclusive



Art 30 TFEU
● Internally, all customs duties are prohibited. In this article there is a prohibition on a
charge having equivalent effect as well as customs duties. Cannot be circumvented.
● Statistical Levy: de minimis → no minimum threshold (e.g. customs duties under a
certain amount are permitted; which is not the case).
○ Court makes it clear that if you want an internal market, you must get rid of
customs.
○ Doesn’t matter what the purpose of the customs duty is, “any pecuniary charge
however small” is contrary to article 30. This is why there is no minimum
threshold beneath which there is no care for what is happening.
■ There are no true justifications for going against this — however, some
charges fall outside article 30, which are known as exceptions (Schütze).

, ● These exist because certain charges are required of traders to
have their goods cross borders.

Article 110 TFEU
● INTERNAL TAXATION = a tax applicable to everyone within a certain sector / industry
within a member state.
● This article only applies to indirect taxation (on products)
○ Indirect taxation = taxes that can be imposed on products and can be passed on
to another person (e.g Value Added Tax (VAT), excise duties).
○ Direct taxation = taxes that cannot be passed on to another person (e.g. income
tax).
● EU law is only applicable to (e.g.) VAT, because taxation is seen as a key piece
remaining in Member State sovereignty.
○ There is no actual harmonisation regarding income and corporate taxation in the
EU.
● 110 TFEU only prohibits discrimination and protectionism that is against foreign
products. This is in line with the International Model (Week 1), taking a rather
permissive approach compared to 30 TFEU.
● Para 1: prohibition of discriminatory taxation
○ If one wants to prove there is discrimination against imported goods, first it must
be ascertained if two categories of products are similar.
○ Court has looked at production measures and systems to establish the following
to be prohibited:
■ Direct discrimination (Outokumpu, para 30-34, 39)
■ Indirect discrimination (Humblot, para 12-15)
■ unless (either is) OBJECTIVELY JUSTIFIED. (p 46)
● Outokumpu, C-213/96: Different tax rate for imported energy (because of not knowing
whether its production is green or grey) — which is illegal. Practical difficulties of
distinguishing is no good explanation. (para 38)
○ As long as the difference is distinguished, differences in tax rate are permitted.
● Humblot C 112/84: Tax rate based on the fiscal horsepower of the car. Different from
regular horsepower. This tax law has a higher burden than for most imported cars,
especially those from Germany.
● Both of these cases are all about SIMILAR PRODUCTS.
● Para 2: prohibition of protective taxation (protecting domestic industries)
○ Products which are not similar, but still compete with each other — e.g. wine vs
beer.
○ Member states tend to tax domestically produced products more favourably
than foreign products;
● Commission v The United Kingdom (beer vs wine): Tax rate on beer was initially much
lower than that for wine. Is the domestic UK production of beer protected by this?
○ The court had to figure out how to compare beer and wine together, which was
found to be difficult given the difference in production and natural properties.