Free Movement Of Goods (non Fiscal Barriers) Flashcards
Explain the difference between QRs and MEQRs using Art 34 and case examples.
A QR is a ‘total or partial restraint…of imports, exports or goods in transit.’ (Geddo v Ente Nazionale Risi).The classic example of a QR is a ban on imports, such as was at issue in R v Henn & Derby which concerned a UK ban on the importation of pornographic material. The defendants were convicted of violating the relevant statutory offence. The CJ held that the statutory offence breached Article 34, because it banned the imports. A ban is the most extreme form of a QR. Imposed quotas on imports also constitute QRs in violation of Article 34. An example is provided by a licensing system that only allows importers to import a specific quantity of a product (cf International Fruit Co (No 2) v Produktschap voor Groenten.
An MEQR is any trading rule that is ‘capable of hindering, directly or indirectly, actually or potentially, intra-community trade.’ (Procureur du Roi v Benoit and Gustave Dassonville.) Examples of MEQRs are national rules that regulate the physical requirements that a product has to satisfy – for example, its shape or packaging – before it may be sold to the public. There are two types of MEQR which Were defined in the inoperative directive 70/50.
What is a distinctly applicable MEQR?
Distinctly applicable measures are measures that do not apply equally to domestic and imported goods. Such measures discriminate against imports because they make importation more difficult or costly relative to the domestic product. One example provided by the Directive is national rules that demand higher standards in respect of imported goods than domestic goods. So for example if a MS makes imports more costly or difficult/Imposing additional requirements on imported goods this is a DIrectly applicable MEQR.(Firma Denkavit-a requirement that imported goods should be inspected was held to breach Article 34 because of the delays in the inspection process and the increased transport costs). Promoting domestic goods would constitute a directly applicable MEQR (buy Irish case- which was campaign by the Irish Goods Council to promote Irish goods was regarded as a MEQR in violation of Article 34 because imports would be likely to be affected by the campaign).Restricting channels of distribution for imported goods The Dassonville case provides a good illustration of this distinctly applicable MEQR. The facts were that Belgian law required goods bearing a designation of origin (eg Scotch whisky) to carry a certificate of origin issued by the Member State in which the goods were manufactured. Dassonville imported Scotch whisky into Belgium from France. As it was not importing directly from the UK, the requirement that it should obtain the requisite certificate was onerous: it favoured direct importers from the UK over indirect importers and therefore hampered free trade.
What is an Indirectly applicable MEQR?
Indistinctly applicable measures appear on their face to be equally applicable to domestic and imported goods, but the effect of the measures disadvantages imported goods by requiring them to satisfy the state’s domestic set of rules for similar products. These measures cover the marketing of products in the widest sense. A good example is a national rule that imposes conditions on the packaging or composition of products.In Walter Rau Lebensmittelwerke v de Smedt PvbA (Case 261/81) [1982] ECR 3961, a Belgian statute required all margarine in Belgium to be sold in cubic packages. Although this law was addressed to all margarine producers irrespective of origin, it had the practical effect of stopping the sale of imports which were differently packaged and protecting domestic producers. The Belgian margarine market had the symptoms of a protected and isolated market: no foreign competition and high prices. The Belgian Government defended the law on the basis of the avoidance of consumer confusion. The CJ accepted this as a potentially legitimate justification of a MEQR under Article 36 (public policy), but found that it failed the requirement of proportionality (there were better ways of achieving the Belgian government’s objectives).A further illustration can be seen in public procurement contracts that may indirectly favour domestic goods. In Commission v Ireland (Re Dundalk Water Supply) Case 45/87 [1988] ECR 4929 contractors tendering for the contract to supply water to Dundalk were required by the Irish government to supply pipes which complied with ‘Irish Standard Mark 188’. This was indistinctly applicable because all pipes whether Irish or foreign were expected to reach this standard. Only one manufacturer made such pipes and it was Irish. One contractor’s bid was made on the basis of supplying pipes to an international standard but not to this particular Irish standard and was rejected for this reason alone. The CJ held that the specification constituted a barrier to imported pipes that were appropriate to the contract and was caught.
When will either be acceptable under Art 36?
Derogations from Article 34 include (1) public morality; (2) public policy; (3) public security; (4) the protection of health and life of humans, animals or plants; (5) the protection of national treasures possessing artistic, historic or archaeological value; or (6) the protection of industrial and commercial property. It is important to add that indirectly applicable MEQRs can be relied upon by member states if they satisfy the Cassis de Dijon dual principle. 1) there must be a presumption of mutual recognition. So goods lawfully in circulation in one MS are it follows presumed marketable I another MS and it is up to the MS implementing the indirectly applicable MEQR to prove otherwise. 2)
and 2) rule of reason:mandatory requirements.
What impact has Cassis de Dijon had?
This case extends the defences available to indirectly applicable MEQRs. So long as two requirements are fulfilled.
1) presumption of mutual recognition.This principle amounts to a presumption that goods lawfully produced and marketed in, say Italy, can in principle be sold in another Member State, say Portugal, without further restriction.On the facts of Cassis, the presumption means that the French cassis is entitled to be sold in Germany if it is produced and marketed lawfully in France (as it was). The only manner in which a state can rebut this presumption is by relying either on one of the derogations under Article 36 or reasonable and proportionate use of the second important principle from Cassis, the rule of reason.
2) the rule of reason: mandatory requirements. The Court made reference to mandatory requirements which went beyond Article 36 and which could in principle save an indistinctly applicable MEQR.
- mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer.This has been referred to in subsequent decisions as the ‘rule of reason’. Its ambit is limited. Only an indistinctly applicable MEQR may benefit from the rule of reason, and, again, on the proviso that the Member State has obeyed the principle of proportionality.
In Cassis, the CJ held that the arguments raised by the German government were not sufficient to satisfy the rule of reason. In particular, the argument that the MEQR was necessary to save members of the German public from becoming alcoholics was illogical as other low-alcohol content products were widely available on the German market. Secondly, the MEQR was not necessary to protect consumers: labelling requirements could ensure that consumers were aware of the alcohol-content of products and thus make an informed decision about whether to purchase the more expensive higher-content products. In other words, the CJ decided that the German government in this case could not point to a mandatory requirement of sufficient force to justify the MEQR.
How can The Cinethéque case and Walter Rau be distinguished?
Although both cases concern products that are indirectly applicable MEQRs, Walter Rau case can not utilise the second defence prescribed by Cassis. For one, the burden of proof is on the state to prove that the margarine cannot be lawfully produced and sold in other MS where it is being imported (principle of mutual recognition) which seems impossible to do, secondly there is no rule of reason to prevent other shaped margarines from coming into the country.
However in Cinetheque, the Cassis defence applies. In Cinethéque SA v Fédération Nationale des Cinémas Français (Cases 60 & 61/84) [1985] ECR 2605, a French law that banned the sale or hire of videos of films during the first year of their release was justified as being necessary to encourage the French public to go to the cinema and protect the profitability of cinematographic production. The rule applied equally to domestic and imported films (it was an indistinctly applicable MEQR) and it was a proportionate means of achieving the objective of protecting cinematographic production.the CJ has, for instance, recognised that the protection of cultural activities such as the protection of cinemas may be a mandatory requirement. The mandatory requirement list is not exhaustive.
What is a selling arrangement?
selling arrangements are those rules that concern who sells the product and when, where and how he goes about it; not the physical characteristics of the goods themselves. Selling arrangements applying equally in law and in fact fall outside the Article 34 structure because they have the same effect in practise on both domestic goods and imports.
How does the court distinguish between selling arrangements and an MEQR?
Cassis will apply to product requirements but not to selling arrangements, provided the selling arrangements: (1) apply to all affected traders operating within the national territory; and (2) affect in the same manner in law and in fact the marketing of domestic and imported products. If these two requirements are met by selling arrangements, they will not fall within the Article 34 structure because the requirements will not prevent the imported goods from accessing the market, nor impede access any more than they impede the access of domestic products. This was the position in Keck: the French law was a selling arrangement that complied with the two requirements set out above and hence was not a MEQR. Thus Article 34 did not apply at all to the arrangement.
