CHAPTER 10 / LECTURE 13– FREE MOVEMENT OF GOODS
Introduction
- The concept of a common market was at the centre of the Treaty of Rome 1957, which
established the European Economic Community.
Free Trade Area
- A free trade area involves MS agreeing to remove all custom duties and quotas between
themselves.
o And, therefore, goods can move freely between MS without limitations on quantity
and without being subjected to further pecuniary charges which may make non-
national goods uncompetitive.
- However, each MS may impose their own quotas and custom duties as regards countries
outside the free trade area.
Custom Union
- Tariffs and quotas are removed internally and agreed levels of tariffs are imposed on goods
from outside the area.
- A custom union introduces an agreement between the MS to impose a common level of
duty on goods from non-member countries.
o This common level of duty is known as the Common Customs Tariff.
- Article 28 TFEU: The union shall comprise a customs union which shall cover all trade in
goods and... the adoption of a common customs tariff in their relations with third countries.
o Which shall involve the prohibition between Member States of custom duties on
imports and exports and of all charges having equivalent effect (CEEs/CHEEs)
- Article 31 TFEU: Common Custom Tariff duties shall be fixed by the Council on a proposal
from the Commission.
Internal Market
- Free movement of the factors of production alongside the customs union (goods, persons,
services and capital)
- An internal market introduces a further agreement between the MS to remove restrictions
on the factors of production
o This is referred to as the free movement of goods, persons, services, and capital.
A common market also introduces a competition policy.
- The phrases ‘common market’ and ‘single market’ are used almost synonymously, but do
have some slight differences of meaning link to the development of the EU.
o However, the Treaty of Lisbon only refers to an ‘internal market’.
Economic and Monetary Union
- Adopts a common policy in financial matters – a single currency and common policies on
interest rates.
- The principle of non-discrimination was enshrined in Article 18 TFEU:
, o Within the scope of application of the Treaties, and without prejudice to any special
provisions contained therein, any discrimination on grounds of nationality shall be
prohibited.
o The European Parliament and the Council, acting in accordance with the ordinary
legislative procedure, may adopt rules designed to prohibit such discrimination.
Technical definitions:
- Custom duty
o A tax levied on imports/exports
Are used to raise state revenue, and/or to protect domestic industries from
more efficient or predatory competitors from abroad.
- Internal market
o TFEU defines it as ‘an area without internal frontiers in which the free movement of
goods, persons, services, and capital is ensured in accordance with the provision of
the Treaty’
- CHEE
o Charges Having Equivalent Effect
Legislative provisions
Treaty Article Covers
Article 26-28 TFEU Definitions
Article 30 TFEU Custom duties and charges having equivalent
effect (CEEs)
Article 34-35 TFEU Quantitative Restrictions and Measure having
equivalent effects (MEEs) on imports/exports
Article 36 TFEU Derogations to Art. 34 and 35 TFEU
Article 110 TFEU Prohibition on discriminatory national taxation
Meaning of ‘Goods’
, - Commision v Italy (Case 7/68) [1968] ECR 423 – explained the term ‘goods’
o Facts: The Italian Government subjected exports of an artistic, historical,
archaeological, or ethnographic nature to a tax. Italy claimed that an export tax on
art treasures was to protect the artistic heritage of Italy.
o Held: ‘Goods’ are ‘products which can be valued in money which are capable, as
such, of forming the subject of commercial transactions’. Therefore, they rejected
Italy’s argument.
Also held that quantitative restrictions (but not these charges) would be
justified where the object of those restrictions was to prevent art treasures
from being exported from a MS.
- Commission v Belgium (Case C-2/90) - extended the definition of goods to include even
those of no commercial value (waste)
o Facts: Wallonia (a region to Belgium) prohibited the storage, tipping, dumping of
waste from other MS. The measure aimed to protect Wallonia from becoming the
target for waste from areas with tighter regulatory regimes.
o Held: that waste, whether or not recyclable, must be regarded as a product, the free
movement (art.30 TFEU) should not be in principle restricted.
However, it was dangerous to the environment (the restriction was justified
by mandatory requirements to the protection of the environment)
- Additional cases:
o Jagerskiold v Gustafsson (Case C-97/98): fishing rights are services rather than
goods
o Commission v Ireland (Re Dundalk Water Supply) (Case 45/87): the definition of
goods includes goods within a contract for the provision of services (water supply)
o R v Thompson (Case 7/78): relates to public policy ‘the need to protect the mint
coinage... involves the fundamental interests of the state’.
Obligation on Member States to ensure free movement
- Commission v France (C-265/95)
o France failed to adopt the necessary and proportionate measures in order to
prevent the free movement of fruit and vegetables to be obstructed by private
individuals
- R v Chief Constable of Sussex ex parte International Trader’s Ferry Ltd [1999] 1 All ER 129
o Protesters sought to prevent the appellant’s lawful trade exporting live animals. The
police restricted it. The actions of the police did not amount to a restraint on
exports.
- Eugen Schmidberger, Internationale Transporte und Plansuge v Republik Osterreich (C-
120/00)
o Schmidberger, (trucking company) claimed damages for loss caused by a protest
group that had prevented it taking goods to Austria.
o The Court: Austria’s failure to ban the demonstration BUT it was justified by the
freedom of expression and assembly of demonstrators (no breach)
Introduction
- The concept of a common market was at the centre of the Treaty of Rome 1957, which
established the European Economic Community.
Free Trade Area
- A free trade area involves MS agreeing to remove all custom duties and quotas between
themselves.
o And, therefore, goods can move freely between MS without limitations on quantity
and without being subjected to further pecuniary charges which may make non-
national goods uncompetitive.
- However, each MS may impose their own quotas and custom duties as regards countries
outside the free trade area.
Custom Union
- Tariffs and quotas are removed internally and agreed levels of tariffs are imposed on goods
from outside the area.
- A custom union introduces an agreement between the MS to impose a common level of
duty on goods from non-member countries.
o This common level of duty is known as the Common Customs Tariff.
- Article 28 TFEU: The union shall comprise a customs union which shall cover all trade in
goods and... the adoption of a common customs tariff in their relations with third countries.
o Which shall involve the prohibition between Member States of custom duties on
imports and exports and of all charges having equivalent effect (CEEs/CHEEs)
- Article 31 TFEU: Common Custom Tariff duties shall be fixed by the Council on a proposal
from the Commission.
Internal Market
- Free movement of the factors of production alongside the customs union (goods, persons,
services and capital)
- An internal market introduces a further agreement between the MS to remove restrictions
on the factors of production
o This is referred to as the free movement of goods, persons, services, and capital.
A common market also introduces a competition policy.
- The phrases ‘common market’ and ‘single market’ are used almost synonymously, but do
have some slight differences of meaning link to the development of the EU.
o However, the Treaty of Lisbon only refers to an ‘internal market’.
Economic and Monetary Union
- Adopts a common policy in financial matters – a single currency and common policies on
interest rates.
- The principle of non-discrimination was enshrined in Article 18 TFEU:
, o Within the scope of application of the Treaties, and without prejudice to any special
provisions contained therein, any discrimination on grounds of nationality shall be
prohibited.
o The European Parliament and the Council, acting in accordance with the ordinary
legislative procedure, may adopt rules designed to prohibit such discrimination.
Technical definitions:
- Custom duty
o A tax levied on imports/exports
Are used to raise state revenue, and/or to protect domestic industries from
more efficient or predatory competitors from abroad.
- Internal market
o TFEU defines it as ‘an area without internal frontiers in which the free movement of
goods, persons, services, and capital is ensured in accordance with the provision of
the Treaty’
- CHEE
o Charges Having Equivalent Effect
Legislative provisions
Treaty Article Covers
Article 26-28 TFEU Definitions
Article 30 TFEU Custom duties and charges having equivalent
effect (CEEs)
Article 34-35 TFEU Quantitative Restrictions and Measure having
equivalent effects (MEEs) on imports/exports
Article 36 TFEU Derogations to Art. 34 and 35 TFEU
Article 110 TFEU Prohibition on discriminatory national taxation
Meaning of ‘Goods’
, - Commision v Italy (Case 7/68) [1968] ECR 423 – explained the term ‘goods’
o Facts: The Italian Government subjected exports of an artistic, historical,
archaeological, or ethnographic nature to a tax. Italy claimed that an export tax on
art treasures was to protect the artistic heritage of Italy.
o Held: ‘Goods’ are ‘products which can be valued in money which are capable, as
such, of forming the subject of commercial transactions’. Therefore, they rejected
Italy’s argument.
Also held that quantitative restrictions (but not these charges) would be
justified where the object of those restrictions was to prevent art treasures
from being exported from a MS.
- Commission v Belgium (Case C-2/90) - extended the definition of goods to include even
those of no commercial value (waste)
o Facts: Wallonia (a region to Belgium) prohibited the storage, tipping, dumping of
waste from other MS. The measure aimed to protect Wallonia from becoming the
target for waste from areas with tighter regulatory regimes.
o Held: that waste, whether or not recyclable, must be regarded as a product, the free
movement (art.30 TFEU) should not be in principle restricted.
However, it was dangerous to the environment (the restriction was justified
by mandatory requirements to the protection of the environment)
- Additional cases:
o Jagerskiold v Gustafsson (Case C-97/98): fishing rights are services rather than
goods
o Commission v Ireland (Re Dundalk Water Supply) (Case 45/87): the definition of
goods includes goods within a contract for the provision of services (water supply)
o R v Thompson (Case 7/78): relates to public policy ‘the need to protect the mint
coinage... involves the fundamental interests of the state’.
Obligation on Member States to ensure free movement
- Commission v France (C-265/95)
o France failed to adopt the necessary and proportionate measures in order to
prevent the free movement of fruit and vegetables to be obstructed by private
individuals
- R v Chief Constable of Sussex ex parte International Trader’s Ferry Ltd [1999] 1 All ER 129
o Protesters sought to prevent the appellant’s lawful trade exporting live animals. The
police restricted it. The actions of the police did not amount to a restraint on
exports.
- Eugen Schmidberger, Internationale Transporte und Plansuge v Republik Osterreich (C-
120/00)
o Schmidberger, (trucking company) claimed damages for loss caused by a protest
group that had prevented it taking goods to Austria.
o The Court: Austria’s failure to ban the demonstration BUT it was justified by the
freedom of expression and assembly of demonstrators (no breach)
