4. Free Movement of Goods I: Fiscal Barriers

Question 1

Fiscal Barriers to the Free Movement of Goods

Answer 1

Fiscal Barriers to the free movement of goods are prohibited by Art 30 and 110 TFEU.

Good defined widely (Comm v Italy (Italian Art):
- “products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions”.

Question 2

Article 30 TFEU

Answer 2

Prohibits CUSTOMS DUTIES and CHARGES HAVING EQUIVALENT EFFECT (CEE).

• is DEff (VGenL), Art 30 actually replaced Art 12 EEC.
• court looks at the effect of a charge, not its purpose (Comm v Italy (Italian Art)).

Question 3

Article 30 TFEU: Customs Duties

Answer 3

CUSTOMS DUTIES: a tax or tariff levied on imported goods.

Question 4

Article 30 TFEU: CEEs

Answer 4

CHARGES HAVING EQUIVALENT EFFECT: “any pecuniary charge imposed by reason of the fact that the goods cross a frontier and which is not a customs duty in the strict sense” (Comm v Italy (Statistical Levy)). NB, charge need not be levied AT the border, just for the reason of crossing it.

ILLEGAL REGARDLESS of whether (Italy (Statistical Levy)):

• it is enacted for the state’s benefit,
• it is non-discriminatory/protective in effect,
• the product competes with domestic product.
• of the charge’s size.
• or the label attached to the charge.

ABSOLUTE PROHIBITION. Very strict, see (Chougal Diamond Co.), purpose was to provided added social security for diamond workers as Belgium didn’t produce them. CEE despite good faith.

EXAMPLES of CEEs:

• Fee to fund compilation of statistics (Italy (Statistical Levy)).
• Warehouse storage fees (Comm v Belgium (Customs Warehouses)).

Question 5

Article 30 TFEU: CEEs - Exceptions

Answer 5

A charge is NOT A CEE if it (Comm v Germany):
1. Relates to a general system of internal dues and so governed by Art 110. (Lutticke), two different systems. (Dansk Denkavit) and (Bresciani).

2. Constitutes a payment for a service:
   - must be in consideration for service rendered at trader’s request, (Belgium (Customs Warehouses)) found CEE. AND
   - the trader must benefit from the service (Italy (Stat. Levy)), (Bresciani), both found CEEs. AND
   - must be commensurate to the benefit of the service (Italy (Stat. Levy)) possible benefit was too general and hard to assess.
3. Connected with inspections required by EU law to promote the FMofG (Comm v Germany (Animal Inspections)). Ct. (Bresciani), state-imposed inspection = CEE.
   - — So long as cost doesn’t exceed inspection cost, is obligatory and uniform for all relevant products, inspection required for general interest of EU and it promotes the FMofGoods.
   - OR by international treaty designed to promote FMofGoods (Comm v Netherlands).

Question 6

Article 110 TFEU

Answer 6

Prohibits DISCRIMINATORY TAXATION.
- Is DEff (Lutticke).

“No MS shall impose, directly or indirectly, on the products of other MS any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products. Furthermore, no MS shall impose on the products of other MS any internal taxation of such a nature as to AFFORD INDIRECT PROTECTION TO OTHER PRODUCTS.”.

Question 7

Article 110 TFEU: Taxes Covered

Answer 7

Taxes covered by Art 110 TFEU: “a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products.” (Comm v France (Reprographic Machinery)).

(Dansk Denkavit) was internal system of dues as levy was imposed on domestic products also. (Reprographic Machinery), didn’t matter whether MS production of a good was negligible.

Whether a tax is DISCRIMINATORY depends on whether the products are SIMILAR or NON-SIMILAR.

Question 8

Article 110 TFEU: Similar Products

Answer 8

Art 110(1) TFEU!

The TEST FOR SIMILAR PRODUCTS (Rewe-Zentrale).
The products must:
1. meet the same needs of consumers, AND
2. have similar characteristics.

The similarity is assessed regarding whether the use of the products is similar, not whether they are identical (Comm v France (Spirits)).

Characteristics determined objectively, needs determined from POV of customers (see two below cases).

EXAMPLE:
- Fruit wines and grape wines were similar (Comm v Denmark (Fruit and Grape Wines)), whiskey and fruit wines were not (John Walker & Sons (Fruit Liquors and Spirits)).

Question 9

Article 110 TFEU: Similar Product Discrimination

Answer 9

ONLY POSSIBLE IF PRODUCTS SIMILAR.

Direct Disc: tax penalises because of origin.
- NEVER JUSTIFIABLE, always breach of Art 110(1) TFEU (Comm v Italy (Regenerated Oil)).

Indirect Disc: tax penalises as result of the product’s effects (Nadasdi).
- JUSTIFIABLE IF tax distinguishes on objective criteria, economic policy compliant with EU law and the tax rules don’t discriminate (Chemical Farmaceutici).

EXAMPLES:

• Indirect Disc against foreign cars (Humblot v Directeur).
• (Comm v Denmark (Fruit & Grape Wines)).
• No InD.Disc (Comm v Greece), was justified.

Question 10

Article 110 TFEU: Non-Similar Products

Answer 10

Art 110(2) TFEU!

TEST FOR NON-SIMILAR PRODUCTS (Comm v France (Spirits)).
- the products must be in competition either partially, indirectly or even potentially. Think substitutability.

Discriminatory if tax has a PROTECTIVE EFFECT.

• if it gives domestic products an advantage by lowering potential consumption of imported product (Comm v Belgium). Also, must consider EFFECT of the tax.
• irrelevant how much of domestic product is produced (Cooperativa Co-Frutta).

EXAMPLES:

• a tax only on cereal-based spirits was disc, not imposed on fruit or wine-based spirits, so matter of competition (France (Spirits)).
• Smaller tax on beer than wine was disc (Comm v UK (Wine and Beer)), not case in (Comm v Belgium) as tax gap far smaller.