Free Movement of Goods - Fiscal Barriers

Question 1

Definition of goods

Answer 1

Commission v Italy (Italian Art)

• products which can be valued in money
• products which are capable of forming the subject of a commercial transaction

Question 2

List the type of charges a state may apply

Answer 2

• Custom Duties

- Charges having equivalent effect (CEE)

Question 3

What is a Custom Duty?

Answer 3

A custom duty is a charge determined on the basis of a tariff, specifying the duty to be paid by the importer of the host state, i.e. a levy on imports (Van Gend En Loos)

Question 4

list reasoning and facts about:

Commission v Italy (Italian Art)

Answer 4

Reasoning:

Facts:

Question 5

What does Art 30 TFEU prohibit?

Answer 5

• Custom Duties; and

- Charges having equivalent effect (CEE)

Question 6

What is a charge having equivalent effect?

Answer 6

Material Requirements:

• any pecuniary charge
• imposed unilaterally on domestic or foreign goods
• by reason of crossing a frontier - Includes a regional frontier (Legros)
• and which is not a customs duty in the strict sense

Question 7

To evaluate if a charge is a CEE, what factors should not be considered?

Answer 7

Irrelevant considerations:

• the size of the charge - Commission v Italy (‘Statistical Levy’)
• its designation and mode of application

Even if it:

• is not imposed for the benefit of the state
• is not discriminatory or protective in effect; or
• the product on which the charge is imposed is not in competition with any domestic product - Sociaal Fonds voor de Diamantarbeiders

Question 8

What charges are allowed under Art30 TFEU?

Answer 8

UNDER Commission v Germany:

• A tax (internal dues) - Dansk Denkavit
• Charges for a service to the importer - Commission v Belgium (Warehouses)
• Charges for inspections carried out to fulfill obligations under EU law
• Commission v Germany

UNDER Commission v Netherlands:

• Charges for obligatory inspections imposed on
  all member states by international treaties

Question 9

What cases failed to establish the charges constituted a payment for a service rendered of direct benefit to the importer or exporter?

Answer 9

• Commission v Belgium (customs warehouses case)
• Bresciani
• Commission v Italy (statistical levy)

Question 10

In Commission v Germany, what conditions need to be established for a charge for an inspection to fulfill obligations under EU law to be valid?

Answer 10

Commission v Germany (the ‘Animal Inspections’ case) - Provided the following 4 conditions need to be met:

** they do not exceed the actual costs of the inspections

** the inspections are obligatory and uniform for all the products concerned in the EC

** they are prescribed by EC law in the general interest of the EC; and

** they promote the free movement of goods

Question 11

What is the definition of tax?

Answer 11

Commission v France (‘Levy on Reprographic Machinery’)

• Charge that 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.”

Question 12

What happens when taxes are applied in situations where domestic production is negligible or non-existent?

Answer 12

• Where domestic production is negligible or non-existent - Commission v France (‘Levy on Reprographic Machinery’) – it will be considered a CCE

Question 13

What does the case of Lutticke tell us?

Answer 13

Lutticke

• Art 110 directly effective
• Cannot be applied jointly with Art 30

Question 14

Article 110 TFEU prohibits discriminatory taxation on….

Answer 14

Similar products; and

Non Similar products

Question 15

What is a similar product?

Answer 15

Requirements:

• The imported and domestic products are similar.
• If so… No direct or indirect discrimination against the imports by higher tax.

Question 16

What tests may be used to determin if a product is a similar product?

Answer 16

Rewe-Zentrale v Hauptzollamt - TEST:

• Similar characteristics (objectives important – John Walker Ltd)
• Meet the same needs (point of view of customers important)

Commission v France (‘Spirits’) - TEST:

• Assess similar and comparable use
• not whether products are strictly identical

Question 17

Why is Rewe-Zentrale v Hauptzollamt important?

Answer 17

Because it lays out the test to ascertain if products are similar

Question 18

If products are similar, what is the next step?

Answer 18

Acertain if the imported goods were discriminated against:

Direct Discrimination

(less favourable treatment of imported product on the grounds of its origin)

• Will not be justified – Commission v Italy (Regenerated Oil)

Indirect Discrimination

(when, on its face (in law), makes no reference to origin, but in reality (in fact), burdens imported goods)

• Nádasdi - Németh – both cases ‘as a result of its effect’

Question 19

What is the step to ascertain if a tax is valid?

Answer 19

1) Under Art 110 - ascertain if products are similar
2) If a product is similar, ascertain if the imported goods have been discriminated against (directly / indirectly)
3) If products are not similar, apply the competition treshold under Commission v France (Spirits) and ascertain if the tax has a protective effect

Question 20

What is direct discrimination of similar products?

Answer 20

Direct Discrimination

(less favourable treatment of imported product on the grounds of its origin)

• Will not be justified – Commission v Italy (Regenerated Oil)

Question 21

What is indirect discrimination of similar products?

Answer 21

Indirect Discrimination

(when, on its face (in law), makes no reference to origin, but in reality (in fact), burdens imported goods)

• Nádasdi - Németh – both cases ‘as a result of its effect’

Question 22

Can a tax be invalid if products are not similar?

Answer 22

If the goods are in competition with the products of the importing country (even partial, indirect or potential - and there is a very low threshold) AND ther tax has a protective effect, then the tax cannot be valid