FREE MOVEMENT OF GOODS QUESTIONS AND ANSWERS ALREADY PASSED
INTRODUCTION TO THE INTERNAL MARKET AND TO THE FREE MOVEMENT OF GOODS
FISCAL IMPEDIMENTS TO TRADE - Answers THE INTERNAL MARKET
KEY LEGISLATION: ARTICLE 3 TEU - Answers The Union shall establish an internal market. It shall work for
the sustainable development of Europe based on balanced economic growth and price stability, a highly
competitive social market economy, aiming at full employment and social progress, and a high level of
protection and improvement of the quality of the environment. It shall promote scientific and
technological advance.
It shall combat social exclusion and discrimination, and shall promote social justice and protection,
equality between women and men, solidarity between generations and protection of the rights of the
child.
It shall promote economic, social and territorial cohesion, and solidarity among Member States.
It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is
safeguarded and enhanced.
KEY LEGISLATION: ARTICLE 26 TFEU - Answers The Union shall adopt measures with the aim of
establishing or ensuring the functioning of the internal market, in accordance with the relevant
provisions of the Treaties.
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 Council, on a proposal from the Commission, shall determine the guidelines and conditions
necessary to ensure balanced progress in all the sectors concerned.
REALISATION OF THE INTERNAL MARKET
Techniques employed: - Answers general prohibitions against impediments to the free moment of
goods, persons, services & capital resulting from actions of MS, which are subject to certain justifiable
derogations;
,the conferral of legislative competence enabling EU institutions to adopt measures necessary to
establish conditions corresponding to those of a genuinely integrated market, through the process
referred to in Treaties as harmonisation or approximation of the MS laws, regulations and administrative
process.
APPROXIMATION - Answers Maintenance of any internal frontier controls will perpetuate the costs and
disadvantages of a divided market.
KEY LEGISLATION: ARTICLE 114 TFEU (ex Article 95 TEC) - Answers Save where otherwise provided in the
Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26.
The European Parliament and the Council shall, acting in accordance with the ordinary legislative
procedure and after consulting the Economic and Social Committee, adopt the measures for the
approximation of the provisions laid down by law, regulation or administrative action in Member States
which have as their object the establishment and functioning of the internal market.
Paragraph 1 shall not apply to fiscal provisions, to those relating to the free movement of persons nor to
those relating to the rights and interests of employed persons.
THE FREE MOVEMENT OF GOODS
Defining 'goods'... - Answers products which can be valued in money and which are capable, as such, of
forming the subject of commercial transactions.
Fiscal (tax) and non-fiscal impediments to free movement... different kinds of national measure that may
constitute a barrier to the free movement of goods: - Answers those that result from aspects of a MS's
tax regime (tax barriers).
those that result from other aspects of national legislation (quantitative restrictions and measures
having equivalent effect).
FISCAL IMPEDIMENTS
TWO KINDS OF FISCAL IMPEDIMENT - Answers — complimentary but mutually exclusive provisions.
By imposing charges directly and exclusively on goods entering or leaving the MS in question. - Answers
Such charges are known as custom duties or charges having equivalent effect. They are absolutely
prohibited, by ARTICLE 30 TFEU.
, By organising a system of internal taxation, applicable to domestic products as well as to imports, in a
way that favours the former. - Answers MS are free to maintain their respective internal taxation
systems, provided that these are neither discriminatory not protective in their effects.
Discriminatory or protective internal taxation is prohibited, by ARTICLE 110 TFEU. - Answers
CUSTOMS DUTIES & CHARGES HAVING EQUIVALENT EFFECT - Answers Relevant Treaty provisions...
KEY LEGISLATION: ARTICLE 28 TFEU - Answers The Union shall comprise a customs union which shall
cover all trade in goods and which shall involve the prohibition between Member States of customs
duties on imports and exports and of all charges having equivalent effect, and the adoption of a
common customs tariff in their relations with third countries.
The provisions of Article 30 and of Chapter 2 of this Title shall apply to products originating in Member
States and to products coming from third countries which are in free circulation in Member States.
KEY LEGISLATION: ARTICLE 29 (ex Article 24 EC) - Answers Products coming from a third country shall be
considered to be in free circulation in a Member State if the import formalities have been complied with
and any customs duties or charges having equivalent effect which are payable have been levied in that
Member State, and if they have not benefited from a total or partial drawback of such duties or charges.
Case 41/76, Donckerwolcke [1976] - Answers — "as regards free circulation of goods within the
Community, products entitled to 'free circulation' are definitively and wholly assimilated to products
originating in Member States".
KEY LEGISLATION: ARTICLE 30 (ex Article 25 EC) - Answers Customs duties on imports and exports and
charges having equivalent effect shall be prohibited between Member States. This prohibition shall also
apply to customs duties of a fiscal nature.
CUSTOMS DUTIES
Defining customs duties... - Answers charge determined on the basis of a tariff specifying the rates of
duty applicable in respect of different categories of product, which is levied by the authorities of a state
in respect of a given product by reason of its importation into, or its exportation from, that State.
KEY CASE: Van Gend en Loos v Nederlandse Adminstratie der Belastingen [1963] - Answers Facts: Firm of
importers required to pay customs duty on glue imported from Germany into the Netherlands under a
law adopted after the creation of the EEC. Importers challenged the payment in the Dutch courts on the
basis that the extra duty infringed Article 30 TFEU prohibiting the introduction of new customs duties.
Key principle: - Answers MS are required under Article 28 TFEU to form a customs union. Customs duties
on imports and measures having equivalent effect are prohibited.
INTRODUCTION TO THE INTERNAL MARKET AND TO THE FREE MOVEMENT OF GOODS
FISCAL IMPEDIMENTS TO TRADE - Answers THE INTERNAL MARKET
KEY LEGISLATION: ARTICLE 3 TEU - Answers The Union shall establish an internal market. It shall work for
the sustainable development of Europe based on balanced economic growth and price stability, a highly
competitive social market economy, aiming at full employment and social progress, and a high level of
protection and improvement of the quality of the environment. It shall promote scientific and
technological advance.
It shall combat social exclusion and discrimination, and shall promote social justice and protection,
equality between women and men, solidarity between generations and protection of the rights of the
child.
It shall promote economic, social and territorial cohesion, and solidarity among Member States.
It shall respect its rich cultural and linguistic diversity, and shall ensure that Europe's cultural heritage is
safeguarded and enhanced.
KEY LEGISLATION: ARTICLE 26 TFEU - Answers The Union shall adopt measures with the aim of
establishing or ensuring the functioning of the internal market, in accordance with the relevant
provisions of the Treaties.
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 Council, on a proposal from the Commission, shall determine the guidelines and conditions
necessary to ensure balanced progress in all the sectors concerned.
REALISATION OF THE INTERNAL MARKET
Techniques employed: - Answers general prohibitions against impediments to the free moment of
goods, persons, services & capital resulting from actions of MS, which are subject to certain justifiable
derogations;
,the conferral of legislative competence enabling EU institutions to adopt measures necessary to
establish conditions corresponding to those of a genuinely integrated market, through the process
referred to in Treaties as harmonisation or approximation of the MS laws, regulations and administrative
process.
APPROXIMATION - Answers Maintenance of any internal frontier controls will perpetuate the costs and
disadvantages of a divided market.
KEY LEGISLATION: ARTICLE 114 TFEU (ex Article 95 TEC) - Answers Save where otherwise provided in the
Treaties, the following provisions shall apply for the achievement of the objectives set out in Article 26.
The European Parliament and the Council shall, acting in accordance with the ordinary legislative
procedure and after consulting the Economic and Social Committee, adopt the measures for the
approximation of the provisions laid down by law, regulation or administrative action in Member States
which have as their object the establishment and functioning of the internal market.
Paragraph 1 shall not apply to fiscal provisions, to those relating to the free movement of persons nor to
those relating to the rights and interests of employed persons.
THE FREE MOVEMENT OF GOODS
Defining 'goods'... - Answers products which can be valued in money and which are capable, as such, of
forming the subject of commercial transactions.
Fiscal (tax) and non-fiscal impediments to free movement... different kinds of national measure that may
constitute a barrier to the free movement of goods: - Answers those that result from aspects of a MS's
tax regime (tax barriers).
those that result from other aspects of national legislation (quantitative restrictions and measures
having equivalent effect).
FISCAL IMPEDIMENTS
TWO KINDS OF FISCAL IMPEDIMENT - Answers — complimentary but mutually exclusive provisions.
By imposing charges directly and exclusively on goods entering or leaving the MS in question. - Answers
Such charges are known as custom duties or charges having equivalent effect. They are absolutely
prohibited, by ARTICLE 30 TFEU.
, By organising a system of internal taxation, applicable to domestic products as well as to imports, in a
way that favours the former. - Answers MS are free to maintain their respective internal taxation
systems, provided that these are neither discriminatory not protective in their effects.
Discriminatory or protective internal taxation is prohibited, by ARTICLE 110 TFEU. - Answers
CUSTOMS DUTIES & CHARGES HAVING EQUIVALENT EFFECT - Answers Relevant Treaty provisions...
KEY LEGISLATION: ARTICLE 28 TFEU - Answers The Union shall comprise a customs union which shall
cover all trade in goods and which shall involve the prohibition between Member States of customs
duties on imports and exports and of all charges having equivalent effect, and the adoption of a
common customs tariff in their relations with third countries.
The provisions of Article 30 and of Chapter 2 of this Title shall apply to products originating in Member
States and to products coming from third countries which are in free circulation in Member States.
KEY LEGISLATION: ARTICLE 29 (ex Article 24 EC) - Answers Products coming from a third country shall be
considered to be in free circulation in a Member State if the import formalities have been complied with
and any customs duties or charges having equivalent effect which are payable have been levied in that
Member State, and if they have not benefited from a total or partial drawback of such duties or charges.
Case 41/76, Donckerwolcke [1976] - Answers — "as regards free circulation of goods within the
Community, products entitled to 'free circulation' are definitively and wholly assimilated to products
originating in Member States".
KEY LEGISLATION: ARTICLE 30 (ex Article 25 EC) - Answers Customs duties on imports and exports and
charges having equivalent effect shall be prohibited between Member States. This prohibition shall also
apply to customs duties of a fiscal nature.
CUSTOMS DUTIES
Defining customs duties... - Answers charge determined on the basis of a tariff specifying the rates of
duty applicable in respect of different categories of product, which is levied by the authorities of a state
in respect of a given product by reason of its importation into, or its exportation from, that State.
KEY CASE: Van Gend en Loos v Nederlandse Adminstratie der Belastingen [1963] - Answers Facts: Firm of
importers required to pay customs duty on glue imported from Germany into the Netherlands under a
law adopted after the creation of the EEC. Importers challenged the payment in the Dutch courts on the
basis that the extra duty infringed Article 30 TFEU prohibiting the introduction of new customs duties.
Key principle: - Answers MS are required under Article 28 TFEU to form a customs union. Customs duties
on imports and measures having equivalent effect are prohibited.
