Chapter 2 Flashcards
What is Article 26(2)
‘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’.
What are ‘goods’?
Commission v Italy
‘products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions’.
What is a customs union?
> A ‘free trade area’ where goods pass between countries without the imposition of restrictions such as customs duties [internal]
A system for the charging of a ‘common customs tariff’ on goods coming into the free trade area from other countries [external]
What is Article 28(1)?
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.
What are the provisions of the treaty?
Article 30 - Prohibits customs duties and charges having equivalent effect
Article 110 - prohibits discriminatory taxation
What are charges having equivalent effect?
Commission v Italy (Statistical Levy)
> ‘Any pecuniary charge … which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier and which is not a customs duty in the strict sense …’
What is IRRELEVANT to identify a CEE ?
Size of charge
Designation
Mode of application
That the charge is not imposed for the benefit of the State.
That the charge is not discriminatory
That the charge is not protective in effect
That the product on which the charge is imposed is not in competition with any domestic product
What happened in Commission v Italy (Statistical Levy)
Levy imposed by italy on imports for the purpose of collecting accurate statistical material relating to trade patterns
What happened in Sociaal Fonds?
Charge on diamonds imported into Belgium was a CEE even though not protectionist
What about charges that do not constitute a customs duty of a CEE?
3 Ways 1. Related to a system of internal dues 2. Payment for a service rendered 3. Attaches to inspections imposed by EU law Commission v Germany
Explain Internal Dues
Charges will not fall within Article 30 but Article 110
Mutually exclusive - Afrons Lutticke
Explain Payment for a Service Rendered
Payment for a specific service actually rendered to the importer and in proportion to that service from being lawful
Commission v Italy
Statistical Levy case
Importer must benefit
Bresciani
- was a CEE
- inspection was for general public not service to the importer
Commission v Belgium
Must be done at the request of the importer
Explain Bresciani
Levy to cover the cost of compulsory veterinary inspections on animal products in Italy
Imposed in general interest of the public so NOT service to the importer
So it was a CEE
The cost of the inspections should have been met by the general public as it was the public as a whole who benefitted from the inspections, not the importer.
Explain Commission v Belgium (customs warehouses)
Must be done at the request of the importer
charges on goods deposited in customs warehouses situated in the interior of Belgium.
The Court held that a charge for the temporary storage of goods in the warehouses at the request of the importer was not a CEE as this was a charge for a service.
the levying of the storage charge on goods presented by the importer at the warehouses solely for the purpose of undergoing compulsory customs clearance operations there, even when the goods were exempt from storage and the importer had not requested that they be placed in storage, was a CEE as it was not a charge for a service
Explain inspections
Must be inspection required by EU law
Bresciani
Commission v Germany (Animal Inspectors)
- was required under a Directive
4 Requirements
- must not exceed actual costs
- must be obligatory and uniform for relevant products
- must be prescribed by EU law
- Must promote the free movement of goods
Explain Commission v Germany (Animal Inspectors)
a fee to cover the costs of veterinary inspections on imported live animals
Required under a Directive
Explain Commissions v Netherlands
About inspections
> where the obligation to inspect had been imposed on all Member States by an international treaty which was designed to encourage the free movement of goods
What is Article 110?
Prevents discriminatory internal taxation
1) 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
2) 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
Which taxes are regulated by Article 110?
‘a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products’
Commission v France - Reprographic Machinery
What happened in Dansk Denkavit ? What case can you contrast this with ?
Gave a definition of the type of taxes which are covered by Article 110A
Part of an internal system of dues as the levy was also imposed on domestic products using the same criteria
– charge levied to fund the cost of checking samples of imported foodstuffs containing additives was not a CEE
Contrast with Bresciani
- inspections on animal products
- this was a CEE
- charges were not applied according to the same criteria and at the same stage of production
What happened in Reprographic Machinery ?
Defined CEE
> a charge which is applied systematically to categories of products irrespective of the origin of the products will be governed by Article 110
> levy on machinery such as photocopiers
> only 1% of equipment into the market was produced in France - 99% was imported
>
A (good tax) is a general system of internal dues applied systematically to categories of products irrespective of origin
- Art 110 taxes:
- general system of internal dues
- applied systematically in accordance with same criteria
- to domestic and imported products alike
What are the requirements for Article 110(1)?
Goods must be similar
Must be discrimination (direct or indirect)
Similar Goods Test
Article 101(1) Whether, at the same stage of production or marketing, the products had similar characteristics and met the same needs from the point of view of consumers
Rewe-Zentrale
Commission v Denmark
John Walker
Cases in Similar Goods Test
Commission v Denmark
- grapewine v fruitwine
- similar as produced the same / met the same needs from consumers
John Walker
- whisky v fruit liquor
- production different
organoleptic properties different
Explain Discrimination
Article 101(1)
Direct &
Indirect
1 Direct
Overtly treats the imported goods less favourably than the similar domestic goods
Commission v Italy (regenerated Oil)
- Indirect
Has the effect of discriminating against imported goods by placing them into a less favourable position
Commission v Denmark
What happened in Commission v Italy (regenerated Oil)
direct tax discrimination
> charged lower tax on regenerated oil than normal oil
only available to domestic oil producers
direct discrim
breach of article 110(1)
What happened in Commission v Denmark
- grapewine v fruitwine
- grapewine taxed at higher rate
- grapewine imported
- similar as produced the same / met the same needs from consumers
- breach of article 110(1)
What happened in Humblot
French
taxation of cars
H paid large tax on mercedes with engine size of 36 CV
in france, any engine over 16CV subject to a special rax at a rate of 5000 francs
french manufacturers only produced engine sizes up tp 16CV
What happened with Commission v Greece
- tiered tax system
- taxes rose by 50% between 1,800cc and 1801cc
- not discrim
- can choose from range of cars between 1800cc and 1600 cc which were all imported
What are the justifications for indirect taxation?
Chemical Farmaceutici SpA
- Taxed synthetic alcohol at 12k lire per hectolitre
Not produced in itay, so only fell on importers
The difference in the level of taxation - industrial policy of promoting the distillation of agricultural products as against the manufacture of alcohol from petroleum derivatives.
Commission v Greece
- justified on social policy
Explain Article 110(2)
Regulates the taxation of products which are not similar
Commission v France 'Spirits' > tax on spirits obtained from cereals > not imposed on spirits made from fruit > cereal imported > sufficient characteristics in common
Com v UK
- higher tax on wine than beer
Com v Belgium
- higher vat rate
What happened in Commission v UK Wine and Beer
higher rate of tax on wine than on beer
- relative increase in duty on wine of 102% compared to a relative increase for beer had been 59% - the tax burden on wine judged by volume had become approximately five times that of beer.
- CoJ initially agreed that w and b were in competition
- Follow up judgement
- the decisive competitive relationship was between beer and the lightest and cheapest varieties of wine
- it was clear that the tax burden on the cheaper types of wine was considerably higher than that on beer. This did have the effect of stamping wine with the hallmarks of a luxury product which could scarcely constitute a genuine alternative to beer in the eyes of the consumer.
Solution
the United Kingdom lowered the tax on wine and increased the tax on beer but did not apply the same regime to both. This was approved by the Commission.
What happened in Commission v Belgium
> wine in Belgium was subject to a VAT rate of 25% whilst beer was subject to a rate of 19%.
The Court of Justice concluded that, as the retail price of a litre of wine in Belgium was four times that of beer, the Commission had failed to prove that the difference of only 6% between the VAT rates applied to the two products was capable of influencing consumer behaviour and therefore of having a protective effect in favour of beer.
Cases in Article 110(2)
Commission v France - spirits
Commission v UK - Wine & Beer
Commission v Belgium
Cases in indirect discrimination
Commission v Denmark
Humblot
Commission v Greece
Chemical Farmaceutici
Case in direct discrimination
Commission v Italy - regenerate oil
Cases in similar goods
Commission v Denmark
John Walker
