Free Movement of Goods Flashcards
Commission v Italy (‘Italian Art’)
- Goods defined as ‘products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions’
Objective of Free Movement of Goods
- Achievement of internal market
- Achievement of a customs union which is an essential step for integration of markets
Article 28(1) TFEU
Prohibits Member States placing customs duties on imports and exports and all charges having equivalent effect
Article 30 TFEU
- Prohibits customs duties and charges having equivalent effect.
- Prohibits charges levied because goods have crossed a border
- Has direct effect
- A charge which falls under Article 30 will simply be unlawful, irrespective of whether it is discriminatory or protectionist.
Article 110 TFEU
- No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.
- Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.
- Has direct effect - Lutticke [1966]
Commision v Italy (Statistical Levy) [1969]
CEE defined as “any pecuniary charge which is imposed unilaterally on domestic or foreign goods because they cross a frontier which is not a customs duty in the strict sense”.
Chougol Diamond Co [1969]
Prohibition on customs duties and CEEs is absolute and does not permit any exceptions
Charges that do not constitute a customs duty or CEE and fall outside of Art 30
- Internal taxes as governed by Art 110
-
Payment for service rendered not as a result of good crossing border
- Bresciani - inspections for purposes of public health - CEE
- Customs Warehouses - storage charges in customs warehouses a CEE as customs clearance operations compulsory
-
Charges for inspections required by EU law
- Animal Inspections - veterinary inspections on imported live animals
-
Charges for inspections required by international treaties
- Commission v Netherlands
Bresciani [1976]
- Levying a charge for compulsory veterinary inspections on animal products entering Italy was imposed for the purpose of public health and so was not a service to the importer.
- Charges on domestic products were also subject to inspections but were not applied according to the same criteria and at the same stage of production so were part of a different system of taxation.
- Therefore, not governed by Art 110 and a CEE
- Compare with Dansk Denkavit
Commission v Belgium (Customs Warehouses) [1983]
- Storage charges on goods deposited in customs warehouses were not a service to the importer because the customs clearance operations were compulsory.
- Therefore, a CEE.
Commission v Germany (‘Animal Inspections’)
- Costs of veterinary inspections on imported live animals were required under a Directive regulating protection of live animals during international transport
- Established 4 requirements that need to be fulfilled to not constitute a CEE:
- Charge must not exceed actual costs of inspections
- Inspections must be obligatory and uniform for all relevant products in Union
- Must be prescribed by EU law
- Must promote free movement of goods by neutralising obstacles arising from inspection measures
Dansk Denkavit
Scope of Article 30
- Article 30 TFEU covers ‘any charge levied on the occasion or by reason of importation specifically affecting an imported product to the exclusion of a similar domestic product.’
- A charge which falls under Article 30 will simply be unlawful, irrespective of whether it is discriminatory or protectionist.
Lutticke [1966]
- A charge can’t be governed by 2 articles. Must be mutually exclusive.
- Art 110 has direct effect
Commission v France (Reprographic Machinery)
Scope of Article 110
- Tax regulated by Article 110 relates to a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products.
- An internal tax governed by Article 110 will be permissible as long as
- it does not discriminate against imports – Article 110(1)
- is not protectionist – Article 110(2)
Dansk Denkavit [1988]
- A charge levied to fund the cost of checking samples of imported foodstuffs was not a CEE but part of a system of internal dues covered by Article 110 as the levy was also imposed on domestic products using the same criteria.
- Compare with Bresciani
Reprographic Machinery [1981]
- A charge which is applied systematically to categories of products irrespective of the origin of the products will be governed by Article 110 TFEU even where domestic production of the goods is, in practice, negligible or non-existent.
Article 110(1) TFEU
- Prohibits discriminatory taxation in regard to the imported goods and similar domestic goods
- Obliges Member States to tax similar imported and domestic goods in the same way.
- A Member State that has infringed Article 110(1) must equalise the tax regime between the similar and domestic products
Rewe-Zentrale [1976]
Goods are considered similar where:
- at same stage of production or marketing, products had similar characteristics
- the meet the same needs from the point of view of consumers
Commission v France (Spirits)
- Similarity of goods determined based on similar and comparable use.
- Don’t have to be identical
John Walker [1986]
- Whisky and fruit liquer wine were not similar because:
- Different manufacturing process – fermentation v distillation
- Different ingredients - Fruit v cereal
- Different alcohol content - 40% v 20% - so different needs
- Needs are determined from the point of view of consumers on an objective basis
- Compare with Commission v Denmark
Commission v Denmark [1988]
- Wine made from grapes and wine made from fruit were considered the same because:
- Same manufacturing process – fermentation
- Both made from fruit
- Similar taste and alcohol content
- Met the same needs from point of view of consumers
- Compare with John Walker
Direct Discrimination under Art 110
Tax system that overtly treats imported goods less favourably than similar domestic goods.
Indirect Discrimination under Art 110
Tax system that has the effect of discriminating against imported goods by placing them in a less favourable position compared to domestic goods in practice.
Commission v Denmark (Indirect Discrimination)
- Denmark imposed a higher tax on grape wine than fruit wine; irrespective of origin of wine.
- However, Denmark produced no grape wine and only wine made from fruit.
- Therefore, only imported wine subject to higher tax rate – breach of Article 110.
Humblot [1985]
Much higher tax on cars with engine size over 16CV (not produced in France) encouraged consumers who would have bought larger engine cars, all of which were imported, to consider buying smaller engine French cars instead – breach of Article 110.
Commission v Greece [1989]
- Incrementally higher tax on cars over 1800cc did not discriminate against imported cars as no Greek cars were manufactured with engine sizes above 1600cc. Therefore, higher taxation didn’t encourage consumers to buy Greek cars – not breach of Article 110.
Chemial Farmaceutici [1981]
Justifications for Indirectly Discrininatory Taxation
- Taxation measures which appear to discriminate indirectly against imported goods may be capable of being legitimately justified on an objective non-discriminatory basis.
- Higher level of taxation on synthetic alcohol produced abroad was justified because it pursued a legitimate industrial policy of promoting distillation of agricultural products as against the manufacture of alcohol from petroleum derivatives.
