FMG II - Justifying Discriminatory Measures

Question 1

Two Justifications to Art.34/35 TFEU

Answer 1

1. Article 36 TFEU - sets out a list of derogations which can apply to ANY kind of restriction: QR, distinctly applicable and indistinctly applicable MEQRs.
2. Mandatory requirements - these are a non-exhaustive list of justifications which ONLY apply to indistinctly applicable MEQRs.

Question 2

Article 36 TFEU

Answer 2

This sets out justifications for ANY discriminatory measures under Art.34 TFEU. The main 4 justifications under Art.36 are:

1) Public morality
2) Public policy
3) Public security
4) Protection of health and life of humans, animals and plants

Note that Article 36 derogations (and mandatory requirements) also have to be justified under proportionality test!

Question 3

R v Henn and Darby

Answer 3

CJEU accepted UK’s ban on pornography imports on grounds of public morality despite the fact that there was not an absolute prohibition under domestic law. This was because there was no lawful porn trade in the UK and the purpose of restricting the ban was legitimate under public morality.

Importantly the CJEU held that it is up to each MS to decide what constitutes public morality in their own territory - so no objective standard imposed by the CJEU.

Question 4

Conegate v Commissioners of Customs and Excise

Answer 4

However, in this case the CJEU rejected the UK’s attempt to justify a restriction on imported sex dolls under Art.36 public morality grounds because there was no such similar domestic law.

If the measure is discriminatory against imported goods (does not apply to domestic goods) then the public morality derogation under Art.36 fails!

Question 5

Commission v Ireland

Answer 5

CJEU has interpreted the derogation of public policy quite strictly and narrowly - it cannot be extended to objectives not mentioned within the Treaty as its purpose is to allow a derogation from a fundamental Treaty provision (Art.34).

So public policy justifications cannot be used as a separate ground of defence - can only be used strictly under Art.36 TFEU.

Question 6

Cullet v Centre Leclerc

Answer 6

CJEU rejected the justification of a French rule imposing minimum retail prices for fuel based on French refinery costs, under public policy with the aim to prevent disturbances of law and order that would resulted from consumers reacting to unrestricted competition.

CEJU rejected this justification on grounds that the impact on law and order would NOT be so bad that the govt. could not deal with it using its resources. So accepted the principle, but rejected the defence on the facts.

But note that AG Van Theemat rejected the defence on principle - he said that civil disturbance is not sufficient to justify discriminatory measures under Art.34

Question 7

Campus Oil v Minister for Industry and Energy

Answer 7

CJEU accepted the justification under Art.36 on grounds of public security because it accepted that it was vital for Iceland to maintain its own oil-refining capacity in order to ensure energy independence which is fundamental for the existence of modern economies and the very existence of a country.

So maintaining energy independence through restrictive measures = justified under Art.36 TFEU on grounds of public security. But while the CJEU did accept the energy independence argument, it stated that the other cases in which this case will apply is LIMITED.

Question 8

Commission v UK (French Poultry)

Answer 8

CJEU held that the UK’s ban on imported poultry was actually motivated more by commercial reasons to block French poultry than to protect public health, therefore the justification on grounds of protection of human life was not accepted.

If the measure is actually more concerned with protecting domestic producers, rather than being mainly about protection human life, then Art.36 does NOT apply.

Question 9

Sandoz BV

Answer 9

If there is uncertainty about the medical implications of some substance then it will, in the absence of harmonisation, be for the MS to decide the appropriate degree of protection - subject to proportionality.

So where there is scientific uncertainty about the effects of a substance, an MS can justify a restriction under Art.36 on grounds of protection of human life provided it is proportionate and there is no relevant harmonisation measure.

In assessing proportionality here, the MS must produce evidence to substantiate claims that the substance might endanger human life.

Question 10

Commission v Germany

Answer 10

But the CJEU will accept, subject to proportionality, that MS legitimately differ in the degree of protection that they give to human life/public health.

So provided the MS acts proportionately and produces evidence regarding the uncertain effects of a substance, then they can justify a restriction under Art.36 on grounds of protection of human life according to their own standards.

Question 11

Cassis de Dijon

Answer 11

The case introduced the concept of mandatory requirements - this is a wider list of non-exhaustive justifications to FMG restrictions than Art.36 TFEU. CJEU accepted that obstacles to free movement of goods within the EU must be accepted to satisfy mandatory requirements.

In particular the CJEU set out the mandatory requirements of protection of public health, defence to consumer etc.

Note that mandatory requirements are much weaker than derogations under Art.36 - they ONLY apply to indistinctly applicable MEQRs.

Question 12

Preussen Elektra

Answer 12

AG Jacobs argued that there should be a relaxation between the distinction of Art.36 derogations and the MR - i.e. he suggested that some MR should be put on the same footing as Art.36 derogations and be able to justify ANY restriction under Art.34.

Question 13

Essent Belgium

Answer 13

CJEU failed to clarify whether MRs can justify distinctly applicable MEQRs - CJEU did not address in this case whether the measure was distinctly/indistinctly applicable - it just said that it could be justified under the MR.

So for PQ, state that the law is currently unclear on this - suggestions have been made by AG General and left ambiguous in Essent Belgium, but generally MRs only apply to indistinctly applicable measures.

Question 14

Oebel

Answer 14

Protection of the working environment is a mandatory requirement

Question 15

Commission v Denmark

Answer 15

Protection of the ENVIRONMENT is a mandatory requirement

Question 16

Protection of fundamental rights is a mandatory requirement

Answer 16

Schmidberger v Austria

Question 17

Commission v Germany

Answer 17

Both derogations under Art.36 AND mandatory requirements must be proportionate in order to be a valid justification to a restriction under Art.34 TFEU.

So in PQ, if the MS is attempting to justify the measure under Art.36/mandatory requirements, you need to consider whether the restriction is also proportionate!

Question 18

Commission v Denmark

Answer 18

Least restrictive trade means proportionality test provides that the measure is NOT proportionate if there is a less restrictive trade means available to the MS that would achieve the objective of the restriction.

Question 19

Commission v Germany

Answer 19

If requiring that goods be labelled in a particular way would achieve the objective of the MS in making the restriction, then the more restrictive trade measure adopted by the MS will not be validly justified as it fails the proportionality test.

State that the least restrictive trade means test is the most commonly used one by the CJEU - so focus should be on this, but also then consider the good governance approach.

Question 20

Commission v Austria (Heavy Lorries)

Answer 20

Another approach that the CJEU has taken is the proceduralisation of proportionality approach - here, the CJEU looks at whether the MS, when introducing the restrictive trade measure, CONSIDERED any less trade restrictive means of assessing that objective itself, rather than the CJEU making this assessment.

Court found that there was not proportionality here because the Austrian govt. failed to fulfil its procedural duty to examine carefully less trade restrictive solutions to achieve their objective.

Question 21

Art.191 TFEU

Answer 21

Art.191 TFEU sets out the precautionary principle, which provides that the protection of the environment (which the CJEU has interpreted as including the protection of public health) shall be based on a precautionary principle.

The precautionary principle grants MS discretion to adopt restrictive trade measures when there is scientific uncertainty about the risk of a potentially harmful substance.

Question 22

Commission v Netherlands

Answer 22

Netherlands wanted to restrict the quantity of vitamins permissible as food supplements as there was some scientific evidence that high levels can damage human health.

CJEU accepted that the restriction could be justified under the precautionary principle on grounds of protection of public health, but the Dutch measure was not valid because it was not proportionate as the risk was based on insufficient scientific evidence.

So there needs to be sufficient scientific evidence suggesting that there is a real risk to public health/the environment for an MS to justify a trade restrictive measure under the precautionary principle per Art.191 TFEU