Free Movement of Goods I: Fiscal Barriers

Question 1

What are the two key themes to remember in relation to fiscal barriers?

Answer 1

Incrementalism
Establishment of the Union is an ongoing process.
Art 26 - ensuring functioning of internal market
Art 28 - applies to dom products and to imported products

Pragmatism
Art 114
Remove physical and other controls to ensure the functioning of the internal market.

Question 2

What are the two key articles for fiscal barriers? Case?

Answer 2

Art 30 - for when crossing a border

Art 110 - for when product has already crossed a border.

Capolongo is the authority on this difference.

Question 3

What is the effect of Art 30?

Sentence? 2 cases.

Answer 3

Prohibits customs duties and prohibits charges having equivalent effect to customs duties

Art 30 is directly effective (Van Gend) and has a broad scope. There are no exceptions (Art treasures). Court looks at the effect of a charge, not its purpose, in order to det whether it is a fiscal barrier or not (Art treasures)

Question 4

What is a charge of equivalent effect?

Answer 4

Any pecuniary charge imposed by reason of the fact that the goods cross a FRONTIER and which is not a customs duty in the strict sense. (Statistical Data Levy)
So can rely on art 30 in an uncompromising manner, doesn’t matter what you call the measure, or what it is for.

A CEE will be illegal regardless of whether it is:
Exacted in the state’s benefit
Non-dicrim or non-protective in effect (Diamantarbeides)
Whether the product in question competes with any dom product or not

Question 5

Give two examples of a CEE

Answer 5

A fee to fund complication of statistics (Statistical Data Levy)
Warehouse storage fees (Customs Warehouse)

Question 6

When will a charge for crossing a border NOT be a CEE?

Answer 6

When it is a charge for a service rendered (Statistical Data Levy)
Court didn’t accept the Italian gift’s argument that it was a charge for statistical data which would provide a benefit to the economy as a whole

So it is fine to charge for a service if the benefit is specific to that trader, but can’t blanket charge for a service, as this would be charging for crossing a border.

Question 7

There are three ways round art 30. What are they? I.e. When is a charge not a CEE?

Answer 7

Services and inspections

1. When it relates to a system of internal dues
   Cf. Bresciani - charged for guaranteeing the cleanliness of fruit and veg when crossed border - was a CEE since a general charge (not of specific benefit to a trader)
2. Where constitutes a payment for a service
   Has to be of direct benefit to a trader, can’t be general (Statistical Data Levy, Bresciani). Can’t be mandatory either.
3. It is connected with an inspection which is obligatory (so required by Community or International law), provided it doesn’t exceed the cost of the inspection (proportionality)
   Bauhuis v Netherlands - vet and public health inspections req by EU law
   Cadsky - public health inspection - can charge if required by EU law

Question 8

What is Art 110 about?

Answer 8

A prohibition on discriminatory taxation
It is directly effective (Alfrons Lutticke)

Basis = fiscal neutrality, the origin of a product should be irrelevant.

Question 9

A tax will not be discriminatory if it is ____? Case?

Answer 9

Genuine.
It will be genuine if it related to a system of internal dues and applies irrespective of the product’s origin
(Levy on reprographic machinery)

Reason: fiscal neutrality. If applies to all products in the same way then it is okay.

Question 10

What must you look at to see if a tax is discriminatory or not? Why do you have to look at this?

Answer 10

First distinguish between similar and non-similar products.

Art 110 doesn’t talk about discrimination so we need to use this distinction.

Test to see if similar:
Does it meet the same needs (subjective)
Does it have similar characteristics?(objective)

So look at the USE of the product, not about whether strictly identical or not (Spirits case)

Test to see if non-similar:
Are the dom products in (partial, indirect, or potential) competition with the imported goods? (Spirits case)

Question 11

Examples of similar products and art 110?

Answer 11

Com v Denmark (fruit and grape wines)
These were similar

Cf. John walker and Sons
Fruit wine and whiskey weren’t similar

Question 12

If they are similar products what do you have to determine about the taxation measure?

Answer 12

If it is discriminatory. Can be directly or indirectly discrim.

Direct - penalises product because of its origin
Bobie
German beer case. Flat rate on imported beer. Sliding scale for Dom producers (often meant they had to pay more - didn’t matter, was discrim so not allowed)

Indirect - taxing a product as a result of its effects

Question 13

When can indirectly discrim fiscal measures on similar products be justified? 3 cases.

Answer 13

Chemial
When based on objective criteria, an econ policy compliant with EU law, or the discrim has been avoided through the use of detailed rules
This case was about Italian alcohol leg. Wanted to discourage alcohol made using synthetic ingredients as wanted to discourage reliance on petroleum. Was allowed on policy grounds.

Humblot
Cars taxed on a rate det by their engines. Taxation penalised as a result of the car’s effect so was indirectly discrim, so violated art 110

Cf.
Com v Greece
Bigger car tax case, couldn’t prove indirectly discrim, so measure was allowed

Question 14

When will a fiscal measure be discriminatory for non-similar products?

Answer 14

Taxation will be discriminatory if it has ‘protective effect’
This happens when it gives dom products an advantage by lowering the potential consumption for the imported products.

It is irrelevant how much of the dom product is produced.

Spirits case
Com v UK (wine and beer case)
Low tax on beer, high tax on wine, wine almost exclusively imported. UK argued due to popularity, was rejected by the court. It was discrim and had ‘protective effect’.
NATIONAL LEGISLATION MUST NOT CRYSTALLISE CONSUMER HABITS

Question 15

What are the two approaches you have to think about in relation to tax harmonisation?

Answer 15

Country of origin approach (personal reasons why buy) vs country of destination approach.(business reasons)
EU takes a mixed approach.

Tax is about autonomy. Union may only act where it has the competence to do so. Subsidiarity = key. Art 5

Question 16

So when are exceptions allowed?

Answer 16

Public policy, e.g. Chemial exceptions - allows some indirectly discriminatory measures for similar products when policy issues in play.

Vat directive (for consumers - policy): about the abolition of fiscal frontiers. Imposed in country where purchased.

Directive 92/12 (producers - policy): about general arrangements, excise duty (imposed in country where acquired). Guidelines given for how much someone can buy before they become a producer.

Question 17

Which directive is about booze cruise limits? Which case interpreted it?

Answer 17

92/12 - limits given for consumers, if exceed them then stray into producer territory.

Joustra
Wine club, yearly order, had to pay tax in Netherlands,mad wasn’t for his personal use. His friend paid him for their cases. Argued that 92/12 was to encourage people to cross borders and buy things so a broad interpretation should be given.
Court rejected. Gave a narrow interpretation of directive 92/12. He had to pay since wasn’t for his OWN use. They thought a broader interpretation would open the door to fraud.

Court said that if a lacuna does exist then it is for the legislature to fill it (amend the provision). The proposal to extend the directive to ‘on behalf of’ private individuals doesn’t appear to have happened.