FREE MOVEMENT OF GOODS 2024

FREE MOVEMENT OF GOODS. In spite of the aims of the EU Treaties, there is still not at the present time absolute freedom for a person in one Member State to import or export goods from or to another Member State. Discuss, explaining in particular the circumstances in which a Member State can lawfully restrict or prohibit the free movement of goods from another Member State. The internal market is defined in Article 26 TFEU in the following terms: The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of the Treaties. The aim is to achieve the circulation of goods without customs, duties, charges or other financial or other restrictions; to promote unlimited trade and to remove from the Member States the control over export and import matters. The union is to be solely responsible for the latter. The preamble of the old EC Treaty has previously proved instrumental in the Court’s ruling in reaching a decision on cases involving the free movement of goods as have Articles 2 and 3 and the fidelity clause Article 10 and the prohibition of discrimination Article 12 EC. This will continue to be the case with the new Treaties, Articles 3 and 4 TEU and Article 18 TFEU. There are four main groups of provisions in the TFEU connected with the free movement of goods: a) Custom duties and charges having equivalent effect (Articles 28-30 TFEU) b) The common customs tariff (Articles 31-32 TFEU) c) The use of national taxation systems to discriminate against goods imported from another Member State (Article 110 Tfeu) d) Quantitative restrictions or measures having an equivalent effect on imports and exports (Articles 34-36 TFEU) FREE MOVEMENT OF GOODS 2 Articles 28-30 TFEU are aimed at the abolition of customs duties and charges having equivalent effect and at prohibiting the introduction of any such measures. Article 28 states that the Union shall be based on a customs union, with a common customs tariff, involving the prohibition of all customs duties on imports and charges having equivalent effect. This provision covers all trade in goods, goods being defined by the Court of Justice in Commission v Italy as products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions. The definition has been extended in Commission v Ireland to include the provision of goods within a contract for the provision of services. Article 30 TFEU prohibits the introduction of new customs duties or charges having equivalent effect, and equally prohibits the increase of those which are already in existence. The prohibition applies both to imports and exports and was held to be directly effective in the leading case of Van Gend en Loos. The Treaty of Amsterdam has amended this by adding a second sentence to make it expressly clear that the prohibition also applies to customs duties of a fiscal nature. Article 34 TFEU provides a general prohibition on quantitative restrictions and measures having equivalent effect. This article and Article 36 TFEU are those most closely concerned with the freedom to import and export goods and thus the answer to this question. The concept of measures having equivalent effect has been defined by secondary legislation and by jurisprudence of the Court of Justice. Article 2 defines measures having equivalent effect to include those which make imports, or the disposal at any marketing stage of imported products, subject to a condition, other than a formality, which is required in respect of imported products only. They also include any measures which subject imported products or their disposal to a condition which differs from the required for domestic products and which is more difficult to satisfy. In Procreur du Roi v Dassonville the term measures having equivalent effect was held to include all trading rules enacted by a Member State which are capable of hindering, directly or indirectly, actually or potentially, intracommunity trade. Basically, therefore, any measures which makes import or export unnecessarily difficult, and thus discriminates between the two, would clearly fall within the definition. 3 Thus, the basic regime promotes free movement but within the Treaty, Article 36 TFEU provides exceptions to the general prohibition of Article 34 TFEU. It states that Articles 34 and 35 shall not apply to prohibitions on imports, exports or goods in transit which are justified on any of the following four sets of grounds: a) Public morality, public policy or public security; b) The protection of health and life of humans, animals or pants; c) The protection of national treasures possessing artistic, historic or archaeological value; or d) The protection of industrial and commercial property Therefore, Article 36 TFEU allows Member States to enact measures which can impede the free movement of goods, but this does not take account of the Court of Justice’s restrictive interpretation or the fact that the application of these exceptions is subject to the limitation, set out in the second sentence of Article 36 TFEU, that they may not be used as a means of arbitrary discrimination, a disguised restriction on trade between Member States. The ECJ has refused many attempts to widen the scope of Article 36 TFEU or to allow the Member States to define the scope of it for themselves. Very few cases have thus survived the strict application of the second sentence of Article 36 TFEU to justify measures taken by Member States. Examples are, amongst others, Commission v Ireland, Campus Oil and the Prantl case. In the Prantl case, the attempt by the Member State to classify any criminal restriction as coming within the scope of public policy under now Article 36 failed. The argument based on public security in the Campus Oil case however succeeded, by which Irish laws insisting that 35 % of petrol supplies be purchased from the State refinery were held to be acceptable. Another successful use of Article 36 TFEU was in the case of Rv Henn and Derby in which a ban on the import of pornographic materials was upheld. It was however to be necessary that similar domestic products were also prohibited. The case of Cassis de Dijon has added to the grounds on which Member States may restrict the free movement but only on an equal footing with domestic products. In the case, the Court of Justice stated that, in the absence of harmonising Community rules, obstacles to the free movement of goods, which are indistinctly applicable in that they apply or appear to apply to both domestic and imported goods, may be allowed only as far as these mandatory provisions are justified by an objective of public interest taking precedence over the free movement of goods. 4 Mandatory requirements of the Member State could be imposed to relate in particular to: The effectiveness if fiscal supervision; The protection of public health; or The fairness of commercial transactions; and The defence of the consumer. The case of Cassis de Dijon had stated to cause the ECJ problems because it was seized on both by Member States to justify restrictions and traders to attack virtually any nationally imposed restriction on trade practises or commercial freedom, particularly where rules were not just aimed directly at imports. The Court of Justice has therefore redefined its position in the Keck case. The Court considered that certain equally applicable nondiscriminatory provisions restricting selling arrangements are not to be considered a hindrance on trade according to the Dassonville case provided that they affect all traders and all domestic products and imports in the national territory, in the same manner and do not impose additional requirements ( Vereinigte Familiapress). In other words the national provisions impose an equal burden in law and in fact and therefore such rules fall outside Article 34 TFEU because they do not prevent imports. Thus, if measures which are adopted by Member States satisfy either the provisions of Article 36 TFEU or the requirements laid down in the case of Cassis de Dijon for mandatory requirements, the Member State will be able, lawfully, to restrict the free movement of goods and thus there is not absolute freedom to import or export goods. Question 2 ‘However wide the field of application of Article 34 TFEU may be, it nevertheless does not include obstacles to trade covered by other provisions of the Treaty. Thus, obstacles which are of a fiscal nature or have equivalent effect and are covered by Articles 28—30 and no TFEU do not falL within the prohibition of Article 34TFEU.’ Discuss. 5 Answer plan • Outline Art 34 TFEU and illustrative case law • Outline Directive 70/50 and relevant case law • Outline Arts 28—30 TFEU and illustrative case law • Outline Art 110 TFEU and illustrative case law • Compare scope of three sets of articles Answer Article 34 TFEU provides a general prohibition on quantitative restrictions and measures having equivalent effect. Its scope has been determined both by legislation and case law. In Geddo v Ente Nationale Risi (2/73), the Court of Justice held that a prohibition on quantitative restrictions covers measures which amount to a total or partial restraint of imports, exports or goods in transit. The most obvious examples of quantitative restrictions on imports and exports are complete bans or quotas restricting the import or export of a given product by amount or by value. These are clearly in contravention of Art 34 TFEU and prohibited. The cases of Commission v France (Import of Lamb) (232/78) and Conj,njss0 v UK (Import of Potatoes) (23 1/78) are straightforward examples of unlawful import bans. The concept of measures having equivalent effect was defined by Directive 70/50, Art 2, which provides ‘measures having equivalent effect’ to include those which ‘make imports, or the disposal at any marketing stage of imported products, subject to a condition, other than a formality, which is required in respect of imported products only’. They also include any measures which subject imported products or their disposal to a condition which differs from that required for domestic products and which is more difficult to satisfy. In Procureur du Roi v Dassonvjlle (8/74) the term ‘measures having equivalent effect’ was held to include ‘all trading rules enacted by a Member State which are capable of hindering, directly or indirectly, actually or potentially, intra-community trade’. Basically, therefore, any measure which makes import or export unnecessarily difficult, and thus discriminates between the two, would clearly fall within the definition. Article 34 TFEU has been held to apply widely to a number of indirect measures including: a government sponsored advertising campaign in Commission v Ireland (Buy Irish Campaign) (249/81); national marketing rules in the Commission v Belgium (Packaging of Margarine) (314/82 and 189/83); import bans on health grounds on food additives have been held to be in breach of Art 34 TFEU in two cases against Germany, Commission v Germany (Beer Purity) (178/84) and Commission v Germany (Sausage Purity) (274/87); in R v pharmaceutical Society of Great Britain (267/87) the rule of the 6 Pharmaceutical Society prohibiting dispensing pharmacists from substituting for the product named on a doctor’s prescription, any other with identical therapeutic effect except under certain exceptional conditions, was also held to be capable of coming within the operation of Art 34 TFEU. Moreover, the scope of Art 34 TFEU applies not just to measures which are directly discriminatory but also to measures affecting both imports and domestic goods termed equally or indistinctly applicable measures. Directive 70/50, Art 3 provides that measures which are equally applicable to domestic and imported goods will breach Art 34 TFEU where the restrictive effect on the free movement of goods exceeds the effects necessary for the trade rules, ie: they would be disproportionate to the aim and would thus tend to protect domestic products at the expense of the imports. See, for example, cases concerned with health checks and spot checks, Commission v UK (UHT Milk) (124/8 1) and Commission v France (Italian Table Wines) (42/82).