Free Movement of Goods Part 1 Flashcards
Overview
The EU does not want to see protectionist measures.
The most obvious form of protectionism: customs duties
Customs duties: Any charge on the import or export of goods.
States also may seek to impose taxes which benefit domestic goods/
Issue: Make foreign goods more expensive than their domestic counterparts.
EU rule: Goods made in Ireland should be sold on the same basis in France as French goods.
Customs union
The abolition of customs duties is central to the single market and customs union.
The Customs Union is the foundation of the EU.
As a result, the CJEU has interpreted Articles 28-30&110 strictly to ensure this aim is achieved.
NB: The court will look at the effect of the measure, not its purpose.
Customs v Tax
Taxes and Customs Duties:
Taxes are even more controversial.
Customs apply when goods cross borders.
Taxes apply when the goods are in the country.
National tax policy is generally a very sensitive subject.
As a result, some taxes may be tolerated, within certain narrow parameters.
Note: The case law is very controversial because of the sensitivity of the subject.
Types of economic integration
EMU
Economic and Monetary Union
Established by the Maastricht treaty
Committed itself at the EU level to take control of the economic direction of the EU.
ECB is given a wide range of supervisory powers.
Single Market
Deals with the free movement of workers too.
Customs Union
Only about the import/export of goods.
Free Trade Area
EU, as an economic entity, enters into free trade agreements with neighbouring countries that are not necessarily in the EU.
Singke market
What does it do
State relvent article
Single Market aims to remove non-fiscal barriers to trade.
Art 26(2) TFEU:
Artilce 26(2) TFEU
The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured.
Features of the single market
Who comments and what di they say
Barnard, The Substantive Law of the EU: The Four Freedoms:
Non-Discrimination
Market Access
Limited Harmonisation
Mutual Recognition
Eu customs union what does it focus on?
relevant articles
The Customs Union tackles fiscal barriers to trade.
The Fiscal Barriers to Trade
A. Customs duties
B. Charges having equivalent effect to customs duties (CEE)
C. Taxation
Article 28 TFEU
Article 30 TFEU
Article 28 TFEU
Customs duties on imports and exports shall be prohibited between Member States.
Article 30 TFEI
Stat ecase
Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States.
Case 26/62, Van Gend en Loos[1963] ECR 1
Held: Article 30 has direct effect.
State-relevant case law on CEE
Comission v Italy
Comission v Italy statistical levy
Diamon miners
Comission v Italy
Facts: The applicant challenged an Italian export tax that they had to pay on the export of historical items arguing that this was contrary to Article 30.
Argument 1: These things were not goods for the purposes of Article 30.
Held: Yes they were, the CJEU adopted a broad definition of a good.
Considered a good because:
Economic value can be attached to the paintings/artefacts.
Economic value attaches to the transaction of these objects.
Argument 2: There was no revenue-raising purpose for the charge.
It was a charge aimed at preserving cultural heritage.
Held: That argument was irrelevant.
Article 30 is designed to remove barriers to free trade.
The courts are not concerned with the purpose of the measure, they look at the practical effect.
Test: If a charge makes it more expensive to import/export goods, it will be a CEE.
Comission v Italy statistical levy
Facts: The commission challenged an Italian rule that imposed a levy on exports to collect statistical information on exports.
Argument 1: The charge was to collect information on trade patterns.
Held: Charges like this are exactly what Article 30 seeks to prevent.
Argument 2: The levy was an extremely low rate.
Held: The low rate is irrelevant.
The relevant question is whether the charge makes it difficult to import/export goods.
This charge did and therefore it was a CEE.
Defined CEE:
Any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier constitutes a charge having an equivalent effect
Conditions:
Pecuniary charge: Obliging the economic operator to pay money.
Imposed on goods
Imposed on goods because of the fact that they have crossed a border.
NB: Even if the levy is not imposed for the benefit of the State and it is not discriminatory or protective in effect, it will still be considered a CEE.
Diamon miners
Facts: Concerned a Belgian charge on the importation of diamonds for a small percentage of their value.
The money from the charge was put into a social welfare fund for people who worked in the diamond industry.
Argument: Belgium were not trying to make a profit, they were attempting to benefit a specific group of underpaid workers.
No protectionist purpose.
Held: Article 30 prohibits any measure having the effect of a customs duty, irrespective of the purpose.
Key Factor: Whether or not there is a restrictive trade effect created by the measure.
Redefined CEE:
Any charge, however small and whatever its designation and mode of application, which is imposed unilaterally on goods by reason of the fact that they cross a frontier constitutes a charge having equivalent effect even if it is not imposed for the benefit of the State, is not discriminatory or protective in effect.
2 types of charges that may not be prohibited under article 30
Service charge
Inspection charge
Service charhe
explain and state case
Example:
Importing 100kg of goods and needing labourers to unload those goods and having difficulty getting workers.
The member state provides their port operators labourers to unload those goods.
In that circumstance, may legitimately charge an economic operator for availing of that service.
comisison v italy statistical ley
comisison v italy statistical ley
Issue: Italy argued that the trade information charge was actually a service.
Held: In certain circumstances, a specific service actually rendered can be valid under Article 30.
However, if the measure is for the country’s own benefit and not a benefit to the economic operator, it is not a service.
There has to be some sort of appreciable advantage to the economic operator.
Cost of insoection state cases
Bresciani
Bahuis v netherlands
Comission v germany
Bresciani
Facts: Concerned a domestic charge imposed on the inspection of raw cow hides.
Inspection was designed to make sure that they were of the required quality.
Argument: It was a service provided to the economic operator to ensure that it is of a specific standard.
Issue: If the quality of a good is acceptable in one member state, it should be good enough quality in another
Held: This was not a service provided to the importer.
It doesn’t matter if the inspection was for the general interest.
If it was needed for public health requirements, then the cost should be met by the general public.
The inspection was not something required by EU law.
Bahuis v netherlands
Facts: Concerned live animal export inspection charges imposed by national law and EU law.
Held: Inspections may be justifiable under Article 36 TFEU
But it also may be justified if expressly mandated by EU law, even if it imposes a charge, subject to certain conditions.
Comission v germany
Facts: Concerned Inspection charges on imports of live animals in Germany.
Held: Inspection charges can be justified when fulfilling EU law obligations.
Limits:
- The charge must not exceed the cost of the inspection.
Example: Vet’s hourly rate is 100 an hour, can only charge the company 100 an hour.
Cannot make a profit. - Must be obligatory and uniform and prescribed by union law.
Doesn’t apply to charges that the member states made up themselves.
Needs to be a measure mandated through a directive/regulation etc. - The inspection itself must be designed to promote the free movement of goods and allow for their facilitation and standardisation.
Conclusion: The criteria here were satisfied.
The charge was not a CEE.
Summary of case law 4
Service charges will sometimes be allowed.
Inspection charges are not prohibited if:
They don’t exceed the actual cost.
The inspections are obligatory and uniform.
Prescribed by Union law.
Promote free movement of goods.
Customs v taxation
Customs v Taxation:
Customs: Cross-border charges from states outside member states.
Physical charges that the EU is susceptible to because it prohibits the free movement of goods.
Taxation: EU is more lenient because it can be justified for economic purposes.
relevant article
110 TFEU
110 TFEu
Prevents internal taxation of goods that are similar to each other.
Prevents internal taxation of goods that are different from each other but in competition.
Puepose
To ensure that Articles 28/30 are not undermined by discriminatory internal taxation.
If member states could just impose any tax that they could when goods come into the country, they could undermine the purposes of Articles 28/30 on imports/exports.
Standard
state case
COmplete neutrality
Bergandi
Bergandi
Article 110 must guarantee the complete neutrality of internal taxation as regards competition between domestic products and imported product
The key purpose of the customs union rules is that goods in the union can be sold on the exact same terms in each country.
Direct discrim state scase
Comission v Ireland
Comission v Ireland
Facts: The Commission took infringement proceedings against an Irish rule that allowed domestic alcohol producers to defer payment for several weeks. Foreign producers needed to pay the tax immediately.
Held: CJEU stated that this was giving a small advantage to Irish companies on its face however, in practice, it was a big advantage and an obvious example of direct discrimination.
Conclusion: This constituted direct discrimination contrary to Article 110.
Indorect discrim state case
Humblot
Humblot
Facts: Concerned 2 rates of French engine tax.
Had to pay a higher amount of tax for engines above 16cv.
On its face, it appeared to be neutral.
However, no French cars had engines above 16cvs.
Held: Although the system embodies no formal distinction based on the origin of products, it manifestly exhibits discriminatory or protective features.
The drafters of the French legislation knew that no French car had engines above that size.
The tax measure aimed to encourage people to purchase domestically.
Indirect discri justification state cases
Comisison v Greece
Chemial
Comisison v Greece
Facts: Tax paid depending on the size of the engine of a car.
2 sharp rises for 1200/1800 cc.
Some Greek cars were affected.
Mostly the imported cars were affected by this tax.
Greek Justification:
Yes, it does affect foreign cars more than domestic cars.
However, some Greeks were also subject to that tax.
If one owns a luxury car, they probably have a higher income and thus are more able for the higher tax burden.
Do not want bigger and heavier cars on the road due to the poor road infrastructure.
The more powerful cars emit more harmful fumes into the environment.
Issue: Indirectly discriminatory?
Held: It was an acceptable progressive tax policy: Credited to the pollution reason.
EU law didn’t preclude the attainment of certain economic goals through national taxation policy.
Conclusion: No discrimination/protection was demonstrated.
The action was dismissed.
Chemial
Facts: Concerned a challenge to the higher level of tax that the Italian state imposed on synthetic alcohol than fermented alcohol.
Italy was not a synthetic producer.
Justification:
Need a petrol-based substance for the synthetic alcohol.
Want to preserve the use of petrol for other matters that mandate it, ie. Electricity.
Held: This was a legitimate choice of economic policy.
It has the same effect on domestic and foreign importers and evidence was provided that it was discouraging the use of petrol.
Criticism: Doesn’t reference how it was not contrary to Article 110 TFEU.
the 2 justifications
2 instances that may be considered:
Environmental policy
Social/economic ends.
Relationship between 110(1) and 110(2) state cases thta ecplain them
If a measure breaches Article 110(1) TFEU the offending Member State will be required to equalise the taxes on domestic and imported products.
If a measure breaches Article 110(2) TFEU the offending Member State will be required to remove the protective effect/ change the administrative application of the tax policy.
Similar (110(1)):
Case 45/75 Rewe [1976] ECR 181
Held: Have similar characteristics and meet the same needs from the point of view of consumers.
Example: Serve the same purpose, ie. Beef burgers/chicken burgers.
Competing (110(2):
Case 168/78, Commission v France [1980] ECR 347
Held: In competition, even partial, indirect or potential.
Cases that differentiate them
Comission v France
Johnnie Wlaker
Comission v Uk
Comission v Italy
Comission v France
Facts: Concerned higher French tax on cereal spirits, ie. Whiskey vs non-cereal spirits, ie. Vodka.
Commission: All spirits fall within a single market.
France: A more specific set of markets depending on the type of spirit
Held: The products have some common characteristics but some differences.
There is some partial competition between them.
This tax favours domestically produced products.
Johnnie walker
Facts: Concerned different taxation of whiskey and fruit wine.
Held: Whisky and fruit liqueur wines were not similar.
They were produced differently, had different alcoholic strengths and consumers did not view them as similar.
Test:
Consider objective characteristics of both categories of beverages, such as their origin, the method of manufacture and their organoleptic properties, in particular taste and alcohol content
Consider whether or not both categories of beverages are capable of meeting the same needs from the point of view of consumers
Conclusion: A significant proportion of domestic goods fell into both categories so it was not in breach of Article 110(1).
It was a category of goods under Article 110(2) TFEU.
Comission v UK
Facts: The Commission prosecuted the UK for taxing wine in a manner which was discriminatory to beer.
]The wine was taxed 5 times higher.
UK argued: There was no competition between the 2 goods because beer is significantly cheaper.
Italy Intervened: There were cheap /accessible wines, and all the wines were subject to the higher tax.
Held: Accept that some consumers may have taken advantage of cheaper wines if they weren’t subject to tax.
While the goods were not similar, they were subject to competition with each other.
Measure was protectionist in nature.
Comission v Italy
Held: Tax on bananas that didn’t apply to other fruits fell within Article 110(2) as bananas are very different to other fruits.
Artilce 110 or 30?
Art 30 TFEU: Automatically unlawful charge.
Art 110 TFEU: Examined for discriminatory/protective effect: will be modified.
2 types of cases
Levy imposed on importer but internal dues
The importing member state does not produce the goods but taxes them anyway.
Levy imposed on importer but internal dues
Denkavit
Denkavit
Facts: Concerned a Dutch importer of animal feed into Denmark who was charged a levy.
The levy was imposed on all Dutch importers but also applies to products within the member state.
Issue: Was this a general system of taxation or was it a CEE?
Held: Applied systematically and by the same criteria to domestic and imported products alike.
Therefore captured by Article 110 despite the cross-border element.
Criteria:
Same rate
Same marketting stage
Same purpose
Doesnt produce
, Co-frutta
Co frutta
Facts: Concerned a tax on bananas that Italy imposed.
The applicant stated that this was a customs duty captured by Article 30.
Held: This was captured by Article 110 because none of that type of good was produced in Italy.
If it were under Article 30, this meant that member states would never be able to impose a tax on goods that they didn’t produce.
