Free Movement of Goods

Question 1

Relevant Articles

Answer 1

Arts 26, 34-36 (Prohibition of quantitative restrictions between MS), 114 TFEU

Article 26

• The Union has to adopt measures with the aim of establishing the internal market

Art 34 –

• Likely to apply if the national goods favour domestic goods over imports. It can also apply to a national measure preventing import from to another part of a MS.
• The most obvious way where a state promotes or favours domestic products to the detriment of competing imports, is where a state engages in a campaign to promote the purchase of domestic as opposed to imported goods. Commission v Ireland.
• Has vertical direct effect

Article 35

Article 36

• Discriminatory barriers to trade – burden of proof rests with MS that is trying to rely on this provision
• Prohibitions under Articles 34 and 35 will not make impossible or will not restrict prohibitions on imports or exports that are justified on grounds of: public morality, public policy, public security, the protection of health and life of humans, animals or plants, the protection of national treasures possessing artistic, historical or archaeological value, or the protection of industrial and commercial property. A PROHIBITION CAN BE JUSTIFIED UNDER ANY OF THESE CIRCUMSTANCES.

Question 2

*Case 120/78 Cassis de Dijon ECLI:EU:C:1979:42

Answer 2

• The applicant intended to import the liquer ‘Cassis de Dijon’ into Germany from France. The authorities refused to allow the importation because the French drink was not of sufficient alcoholic strength to be marketed into Germany. Under German law liqueurs had to have an alcohol content of 25%, whereas French drink had an alcohol content of between 15 to 20%. The applicant argued that the German rule was an MEQR.
• Reasoning:
• The Court developed the Dassonville judgment in this case.
• 1. The Court affirmed paragraph 5 of Dassonville: what is now Article 34 could apply to national rules that did not discriminate against imported products. The assumption was that when goods had been lawfully marketed in one MS they should be admitted into any other MS without restriction. Thus, using the principle of mutual recognition.
• 2. The case also built in paragraph 6 of Dassonville in which the ECJ introduced the ‘rule of reason’: in the absence of harmonization, reasonable measures could be taken by a state to prevent unfair trade practices. This rule and the core of the case is found in paragraph 8.
• Judgement
• 14(4) ‘There is therefore no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State; the sale of such products may not be subject to a legal prohibition on the marketing of beverages with an alcoholic content lower than the limits set by the national rules.’
• Important case as it is authority for various things:
• 1. For mutual recognition / rule of reason
• 2. What constitutes an indistinctively applicable measure
• 3. Introduced the concept of mandatory requirements
• 4. Authority about rules of products characteristics are automatically indistinctively applicable measures.

Question 3

Cases 267 & 268/91 Keck and Mithouard ECLI:EU:C:1993:90

Answer 3

• Keck and Mithouard (K and M) were prosecuted in France for selling goods at a price which was lower than their actual purchase price (resale at a loss), contrary to French law. The law did not ban sales at a loss by the manufacturer. K and M claimed that the French law was contrary to Community law concerning free movement of goods.
• The case tried to clarified the scope of Article 34.
• The main question was whether the prohibition on reselling products at a loss was within Article 34 of the TFEU.
• Judgment
• For an MEQR to apply, it must be capable of hindering ‘intra-Community trade directly, indirectly, actually or potentially.’
• The Court of Justice said at Para 16 that ‘national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgment, [so long as those provision]…
- Apply to all affected traders operating within the national territory and
- Provided that they affect in the same manner in law and fact, the marketing of domestic products and of those from other Member States.’
• To sum up, the prohibition on resale at a loss fulfils these conditions and does not impede the access of imported products more heavily than domestic products. Therefore, the prohibition under Article 34 of TFEU does not apply measures of a Member State imposing a general prohibition on resale at a loss.
• Para 16. The first part quotes Dassoville – So the paragraph described the criteria 1. Does it apply to all trade in all MS 2. Does the measure apply to all MS? So is it the same in law 3. And is it the same in fact.

Question 4

Case C-405/98 Gourmet International Products ECLI:EU:C:2001:135

Answer 4

• The Swedish Consumer Ombudsman sought an injunction restraining GIP from placing advertisements for alcohol in magazines. Swedish law prohibited advertising of alcohol on radio and television, and prohibited advertising of spirits, wines and strong beer in periodicals (form of advertisement) other than those distributed at the point of sale.
• The prohibition on advertisement did not apply to periodicals aimed at traders such as restaurants. GIP published a magazine containing advertisement for alcohol. 90% of the subscribers were traders and 10% were private individuals.
• GIP argued that the advertisement ban was contrary to Article 30. It contended that the advertising ban had a greater effect on imported goods than on those produced in Sweden.
• 21. ‘…the Court is able to conclude that, in the case of products such as alcohol beverages, the consumption of which is linked to traditional social practices and to local habits and customs, a prohibition of all advertisements in the press, on the radio and on television, the direct mailing of unsolicited material or the placing of posters on the public highway is liable to impede access to the market by products from other Member States more than it impedes access by domestic products, with which consumers are instantly more familiar.’
• Hence the prohibition on advertisement constituted an obstacle to trade between Member States caught by Article 30 of the Treaty.

Question 5

Joined Cases C-204 to 208/12 Essent, ECLI:EU:C:2014:2192

Answer 5

• Issues rising from the case: If an energy regulator only accepts green electricity certificates for electricity produced from renewable sources within a region and it refuses to accept certificates produced in: i) another region of the same state; ii) another Member State; and iii) and EEA State (Norway).
• Is the regulator in breach of EU law? And is the energy regulator in breach of the principle of equal treatment and the prohibition of discrimination?
• The distinctively applicable measure was justified on the basis of a public interest other than those listed in Article 36 TFEU.
• Findings of the Court
- 131. It would be possible for the relevant supplier to obtain certificates under fair terms.

Question 6

Notes

Answer 6

Policy Document

Digital Single Market Strategy COM(2015) 192 final

• P2.The internet and digital technologies have and continue to transform our everyday lives. There have been increasing changes in innovation, growth and jobs. However, they also have challenging policy issues for public authorities which requires coordinates EU action. Therefore, the European Commission created a Digital Single Market.
• ‘A Digital Single Market is one in which the free movement of goods, persons, services and capital and where individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence.’ Thus, helping EU companies to grow.
• P19 ‘The strategy for a Digital Single Market is about transforming European Society and ensuring that it can face the future with confidence. The Commission invites the European Parliament and the Council to endorse this strategy to complete the Digital Single Market as soon as possible an to actively engage in its implementation, in close cooperation with all relevant stakeholders.’

All MS are having problems with an element of subsidiarity and says that it will be better achieved at the level of EU – SO BE prepared what it is and why the EU wants to stablish it
Questions for discussion

1. “Where an obstacle to market access is found to exist, there is no need to undertake a comparative examination between the situation of the domestic products and that of the imported products in order to establish the existence of a difference in treatment between them”. Discuss.
   • Case law states that to establish whether a certain discriminatory measure exists, you must first, compare the situation of the domestic products with the imported products to establish whether there is a difference between them and any relevant discriminatory measures.
   • Two points to look at: Is it discrimination case or about market access – and thus assumes that both discrimination and market access are different. So does the case law treats them differently? Or does the case law treat them the same way.
   • So you must talk about what type of obstacles have been identified under Article 34, such as Article 34.
   - So quantitative restriction cases on one hand
   - And MEQR cases on the other hand – and within these identify the three different types of MEQRS (so are they predicated on market access or market)
   • We know that looking at these, they will be clearly discriminatory

The first thing to look at is the starting position of MEQR
• Dassonville Para 5. You could argue that this definition is very open. And this seems to suggest market access – as anything that impedes intra-community trade.
♣ Talk about indistinctively applicable measures – Cassis de Dijon – so it appears that indistinctively applicable rules are predicated on differential treatment between imports. So whether imports and domestic goods are treated differently.
♣ Having done indistinctively applicable we now need to test Keck and know para 16 and 17 –
• 17. Provided that the conditions of the Keck test are met then the state measure will not impede market access or impede the market access on imports of goods – this means… Keck leaves it open as to whether it is market or discrimination based. So we want to know the cases post-keck to see if they have gone down the discrimination OR the market access. You can argue that you can argue both ways
• Post-Keck – Gourmet international – starts off by saying that it is about market discrimination but then the judgment looks at the effect from consumers’ eyes – and says that local consumers are likely to favour national products because foreign ones cannot advertise – and reaches the discrimination line of reasoning by looking at the prospective of the consumer.
• Another post-Keck cases in terms of whether they followed market access or discrimination route. De Agostine + Leccler-Siplec.
• Post-keck seems to follow the discrimination and not the market access route.

2. What are the implications of the Court’s judgment in Essent with regard to availability of mandatory requirements?
   • The implications of the case are that a distinctively applicable measures showing direct discrimination can be justified on the basis of the public interests, other than those stated in Article 36.
   • In fact, the Court states that it is possible to obtain the certificates under fair terms.
   • The energy company had to collect energy certificates
   • Essent is a green electricity provider – the Belgian rules said that any trader wanting to sell electricity would want to produce electricity certificates and a certain quota had to come from Belgian green resources.
   • Essentially we did not have just a quota but forced you to purchase a certain amount.
   • This is a preliminary reference – this is a quota obligation/ hence a quantitative restriction.
   • It would appear for a measure that was a quantitative restriction
   - How did the court arrive at its reasoning?
   - And what are the implications of that?
   • The court talks about the quota implication and categorise the measure as an MEQR. So the question is whether the Court has done the right classification between market access and/or discrimination = the courts describes the quota as discriminatory as stated in Dassonville.
   • The court says that it is useful for the protection of the environment – but the measure goes beyond – such as humans, plants and animals. Whilst the Court acknowledges the availability of the environment, it does not mean that it stands on its own, but it is a link of a protection between human, plants, and animals.
   • Now ask what are the implications of Article 34? What is no longer clear? So distinctively applicable and indistinctively applicable are no longer distinguishable.
   ♦ Ask if the court if the environment is available that is available OR if mandatory requirements available. THESE ARE BOTH SEPARATE CONCEPTS BUT ENVIRONMENT DDOES NOT FALL IN THE CATEGORY OF ARTICLE 36.
   • WE DO NOT know yet if mandatory requirements have been moved over or if it has been moved over completely and the pros and cons of that hypothetically.
3. Following an increasing number of accidents involving in-line skaters (roller-bladers) the UK Government has introduced a number of measures intended to promote the health and safety of the UK population:

It has introduced a requirement that advice detailing the availability of local training and classes must be provided at the point of sale.
It has prohibited the advertising of in-line skates in magazines directed at the public, including specialist skating publications.
It has imposed a restriction prohibiting the use of in-line skates by under-16s other than in designated skate parks under the supervision of qualified instructors. It has also prohibited the use of in-line skates by anyone on public highways, pavements, pedestrian footpaths and public parks (other than designated skate park areas).
In addition to this, the Association of High Street Retailers, worried about their potential liability for injury suffered by incompetent skaters, have decided to only sell skates with a rear heel brake on at least one boot.

in-lines.co.uk (in-lines) is an on-line retailer, selling a wide range of skates from all the leading and many specialist manufacturers. in-lines does not have access to local information regarding training and classes, but already provides a training DVD and MP3 file, as well as a printed user manual providing instructions for safe use, with every pair of skates sold. It is concerned about the impact the requirement of provision of local training advice will have upon its business.

Doces, one of the market leaders, is a French based manufacturer of in-line skates. It produces a number of lines (for the more experienced skater) which do not include rear heel brakes. It is concerned that it will no longer be able to sell these lines in the UK.

Storm is a Polish based manufacturer, now seeking to establish its brand in the UK, which is concerned about the impact of the advertising ban.

in-lines, Doces and Storm are also all worried that the restriction on use of in-line skates will seriously impact upon market demand.

Advise

Doces
• Doces, the French based manufacturer should not be concerned about no longer being able to sell in-line skates. The case of Cassis de Dijon we can be certain that foreign goods will not be treated differently from national goods without amounting to a quantitative restriction, thus a discrimination.
• As long as the measure is designed to promote market needs, thus improving the EU market, an advertisement will not ban their businesses, unless it proves to be inappropriate or in some way not beneficial for the MS.
• The problem would be that UK law also treats its home manufacturers the same way, and has placed the same restrictions on them.
• Therefore, there would not be direct discrimination against the French manufacturer.

Storm
• See above.

Treat clients that similar needs together and the ones with nothing in common separately.

INLINE (You have an internal situation BECAUSE THIS IS AN UK based retailer challenging UK based law – HENCE ARTICLE 34, does not apply)

• A. Do not stop there, say that because they are an online retailer then they could import goods from other countries.
• PESTRE CASE – Refers to the whole internal situation rule – When you look at an internal situation, you look at the measure itself. So imports come from Germany.
• B. The next issue to prove is whether we have state measure? INLINE IS specifically challenging a requirement about local training. This measure has been introduced by the UK government and it is clear a state measure.
• C. MEQR
• D. Selling arrangements – however, we need to apply the Keck arrangement – the first element is to state the three criteria of Keck: i) – so it appears that the Keck provisions are not met so it will be treated as an indistinctively applicable because it (does it apply to all? Is it the same in fact? And is it the same in law?)
• E. Justification – because the protection/ mandatory requirements are broad and if it is justified under mandatory requirements, the next question is whether it is proportional?
• F. Proportional – does it go beyond what is necessary?
• = The measure lacks proportionality hence it will not be in line with the case.

DOCES

• A. French – so the whole internal situation does not apply to him
• B. State measure – so prima facie it does not appear to be a state measure – so you can say … we need more facts because if it is a private measure Doces cannot challenge it. USE Commission v France – French fruit private organisation put in a strike, the Spanish said that the state should have intervened - … back to the case you could have said that the State should have stopped this situation.
• C. MEQR
• D. because this is about the characteristics of the product/ skates, then you will be using the principle of mutual recognition in Cassis de Dijon. So accepting lawfully products from another country.
• E. Is the measure justified?
• F. Is the measure Proportional? (two more questions…

4. What is the digital single market? Why does the EU Commission think that new legislative proposals are needed? (See the Digital Single Market Strategy).

• P2.The internet and digital technologies have and continue to transform our everyday lives. There have been increasing changes in innovation, growth and jobs. However, they also have challenging policy issues for public authorities which requires coordinates EU action. Therefore, the European Commission created a Digital Single Market.
• ‘A Digital Single Market is one in which the free movement of goods, persons, services and capital and where individuals and businesses can seamlessly access and exercise online activities under conditions of fair competition, and a high level of consumer and personal data protection, irrespective of their nationality or place of residence.’ Thus, helping EU companies to grow.
• P19 ‘The strategy for a Digital Single Market is about transforming European Society and ensuring that it can face the future with confidence. The Commission invites the European Parliament and the Council to endorse this strategy to complete the Digital Single Market as soon as possible an to actively engage in its implementation, in close cooperation with all relevant stakeholders.’

Highlights of the tutorial

Topics that are inter related

• Relevance of the whole internal situation
• When looking at problem questions you need to show who you will be advising. To do a free movement of Goods you need to prove that your case is a mixed subject matter of the theme
• Look at whether your thing is about discrimination, or non-discrimination – and when we look at workers we will look at whether they are similar
• Defences available to the MS with restrictions on the restrictions on free movement of goods
• A key question if something can be justified is: Is it proportional?

All free movement of goods are predicated on a factor of movement and production.

Article 34

Things that are important

• MS autonomy
• For Article 34 to apply you must show some form that the product in question is moving across borders and that it is effective.
- So the Free movement of goods only applies when you have some form of cross border situations
• Article 34 only applies to state measures – so vertical direct effect.
• Two broad measures that can be called under Article 34: Quantitative Restriction and MEQR.
- Quantities restrictions authority: Geddo.
- The Geddo – a measure that constitute a total or partial prohibition on imports is a quantitative restriction. This could be by percentage or numbers.
- A particular example would be a quota.
- Second – Dassonville 5. All trading rules that hinder directly or indirectly, actually or potentially, intra-community trade. Key definition to remember for the exam.
- Under the Dassonville judgment we have been taken to three varieties of MEQRs – 1. Distinctively applicable, 2. Indistinctively applicable, 3. Selling Arrangement (SA)
- For number one could also be described as something that is described as directly discriminatory. And for the second, would the the opposite.
• We know that something is dintinctively applicable treats imports different in law – so does the legal measure treat imports different in law, then it will most likely be distinctively applicable
• Indistinctively applicable – Cassis de Dillion – Two elements: 1. It is the same in law, but different in the facts but when you apply it factually it will have a different effect. So for example the German law treats every apparently the same, but the effect would be different. So when you apply the law it will have a negative impact.
♣ Anything about product characteristics in the exam is an indistinctively applicable measure as well as anything about product use.
• A selling arrangement is the same in law and in fact.

Anything to do with advertising (Selling arrangements)

• Start with Keck – and we know that it is prima facie because of Gorme international.
• Advertising, premises, opening hours, marketing fall in the category of selling arrangements.
• This is how you distinguish between indistinctively applicable and distinctively applicable with the selling arrangements
• You must apply three rules of Keck: Traders, … All three elements are cumulative, and if one of them is missing you treat it like an indistinctively applicable measure – Gourmete banned alcohol – did the rule apply to all? What was the effect in fact? All three rules were given in this case – if one of the conditions fails then you will treat it as an indistinctively applicable measure.
- The court has created the exception of having to look at market access.
- The market access test is in the Heimdienst case. Ask is market access prevented?
- Even if you had a selling arrangement justifying the action you will need to look at whether it impedes selling arrangement.

Article 36 has specific derogations for direct discrimination. So if you have a quantitative restriction of and MEQR + distinctively applicable measure then Article 36 will apply in essence. This has changed we’ll see.

If you have an indistinctively applicable measure it can be justified by Article 36 or by mandatory requirements (but this is an opened list – because it is everything that it is not covered by Article 36) and when we talk about proportionality we have to apply the two tests of proportionality. There’s two basic elements of proportionality:

1. Does the measure meet the objective?
2. Does it do what it is necessary to achieve the objective? – if it does more then it will not be proportional.