Week 2

Question 1

What is Negative integration?

Answer 1

• MS cannot maintain barriers.
  Case 15/81: the aim of the provisions of the Treaties is to eliminate ‘all obstacles to intra Community trade in order to merge the national markets into a single market.
• Prohibition to trade: tariffs and non tariffs.

Question 2

What are “Goods”?
2 characteristics

Answer 2

• Case 7/68 Commission v Italy: o Goods:
  “products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions”
• Products and goods are the same

Question 3

¿What is irrelevant for the free movement of goods?

Answer 3

• Nationality trader or purchaser.
• Residence of legal and natural persons involved.
• Its important where the product from.

Question 4

¿What does the Art. 30 TFEU prohibit?

Answer 4

Customs duties and charges of equivalent effect

Question 5

¿What is a Customs duty and Charges of Equivalent Effect ?

Answer 5

Customs Duty: Charges levied on goods by reason of the fact they cross a frontier between a MS.

Charges of Equivalent Effect:
Case 24/68, Commission v. Italy (Statistical levy): “any 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”.

Question 6

¿What are the characteristics of a EEC?

Answer 6

1. Any charge.
2. By reason of the fact the goods are crossing the border.
3. Even if its minimal.
4. Whatever its designation or mode.
5. Not confined to charges imposed for the benefit of the state.
6. Even if is imposed on a necessary activity.

Question 7

Is there a derogation clause for Customs duties or charges of equivalent effect?

Answer 7

There is no derogation from Art. 30 TFEU.
However, there are permissible charges as they will not quality as CEE.

Question 8

¿What are permissible charges that don’t qualify as CEE?

Answer 8

1. Payment for a genuine services rendered.
   - Must confer a specific advantage on the importer.
   - Charge have to be proportionate
2. Inspections required by EU law
   - Not exceed the cost of the inspection, obligatory and uniform, required by the EU law and facilitate the free movement.
3. Charges falling with the scope of internal taxation.
   In Commission v France (Reprographic Machines), the Court says that taxes are not CEE:

• Apply equally to domestic and imported goods (non-discrimination principle).
• Are based on objective criteria unrelated to the crossing of borders.
• Do not provide indirect protection to domestic goods (Article 110(2) TFEU).

Question 9

Relating Art. 110 TFEU, what does it mean that Art. 110 and 30 are mutually exclusive?

Answer 9

This means that a charge cannot be simultaneously evaluated under both Article 30 and Article 110. If the charge is linked to crossing a border, Article 30 applies; if it’s a domestic tax system issue, Article 110 applies.

Question 10

Taxes under the scope of Art. 110 are prohibited?

Answer 10

1. Direct discrimination: Taxes that explicitly favor domestic goods over imports are prohibited.
2. Indirect discrimination: Differentiation based on objective criteria (e.g., alcohol content, packaging) is permitted if:

• It is not related to the origin of the product.
• It serves a legitimate EU-recognized objective (e.g., health, environment).
• It is proportionate (no more restrictive than necessary)

Question 11

How is the protection under Art. 110 TFEU?

Answer 11

1. Similar products: Prohibits MS from imposing higher taxes on imported goods compared to similar domestic goods. Both, direct and indirect discrimination is prohibited.
2. Different products: For goods that are not directly comparable, Article 110(2) prevents MS from imposing taxes designed to protect domestic products indirectly. Only
3. For goods in competition: not “similar” but compete in the same market, the taxation should not favor domestic goods. Both, direct and indirect discrimination is prohibited.

Question 12

How is the basis for comparison?

Answer 12

1. Similar Goods: The comparison is based on characteristics and purpose.
2. Goods in Competition: The comparison is based on substitutability and consumer choice.
3. Different Goods: No basis for comparison exists because the goods are unrelated.

Question 13

How does Art. 110 (2) apply to “goods in competititon”?

Answer 13

3. For goods in competition: not “similar” but compete in the same market, the taxation should not favor domestic goods.

substitutability test helps determine whether two products are in competition by analyzing whether consumers would substitute one for the other based on price or availability

Protective Effect Creates a Breach: A protective effect occurs when the tax system encourages consumers to favor domestic products, even if unintentionally. This distorts competition in the internal market and breaches Article 110(2).

Question 14

Art. 34 TFEU: What are quantitive restrictions?

Answer 14

“Measures which amount to a total or partial restraint of imports, exports, or goods in transit.”
- Total restraint: Total prohibition on imports and exports
- Partial restraint: A system of quotas (p.e more than 10x per year).

Question 15

What are Measures of Equivalent Effect?

Answer 15

Defined in the Dassonville case:

“All trading rules enacted by Member States that are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade.”

MEQRs are broader than QRs and include any national rule or practice that affects the free movement of goods between Member States, even if it does not explicitly restrict imports or exports.

Question 16

What is the Scope of Article 34 TFEU?

Answer 16

1. Article 34 applies to measures affecting trade between Member States. It does not apply to wholly internal situations (where no cross-border element exists).
2. Reverse Discrimination:
   When a Member State’s own citizens are disadvantaged by a domestic law compared to citizens of other Member States, this is not addressed by EU law (e.g., wholly internal situations).
3. Potential Effect on Trade: Even measures with only a potential hindrance to trade can breach Article 34. The Court examines not just the actual impact but also the possibility that trade could be affected.
4. A prohibition on the use of a product in the territory of a Member State has a considerable influence on consumer behavior, which in turn affects the access of that product to the market

Question 17

What does Art. 34 includes?

Answer 17

1.Quantitative Restrictions: QRs are explicit bans or quotas on goods.
2. Measures Equivalent to Quantitative Restrictions: Include all rules hindering trade, directly or indirectly.
3. Measures that restrict a product’s ability to enter a Member State’s. A prohibition to use, such the prohibition to use motorcycles to pull trailers.

Question 18

Do the selling arrangements are measures of equivalent effect?

Answer 18

No.

Selling Arrangements: Keck (Cases C-267 & C-268/91) Keck Doctrine:

1. Product Requirements: Rules about the product’s composition, form, or labeling that directly hinder trade. These are MEQRs and breach Article 34 unless justified.

Justification:
2. Selling Arrangements: Rules about how, where, or when a product is sold. These do not breach Article 34 if they apply equally to domestic and imported goods and do not affect market access disproportionately.

Examples of Selling Arrangements:

Restrictions on opening hours for shops.
Bans on advertising specific products.

Selling arrangements are not derogations. They are subject to the rules of Article 34 and the Keck Doctrine to determine if they hinder trade.

Question 19

What are the justifications for Art. 34?

Answer 19

• Are exceptions allowed under Article 36 TFEU, which justify restrictions on the free movement of goods for specific reasons (e.g., public morality, health, or security).
• Allow Member States to restrict trade even if the restriction violates Article 34 TFEU, provided the measures are:

(1) proportionate (meaning there are no less restrictive alternatives to achieve the same result) and

(2) necessary (to achieve the stated objective).

Question 20

If the measure does not fall under Article 36, could it be justified based on mandatory requirements (overriding reasons of public interest)?

Answer 20

Examples:
- Consumer protection.
- Fair competition.
- Environmental - protection.
- Public health (expanded from Article 36).

1. Principle of Mutual Recognition (Cassis De Dijon):
   MS must respect the trade rules of other State and not seek to impose their own rules.

Any product imported from another MS must in principle be admitted to the territory of the importing MS if it has been lawfully produced and traditionally accepted in the exporting country and is marketed in the territory of the latter.

2. The measure must still satisfy the proportionality test.

Question 21

What are Distinctly Applicable Measures ?

Answer 21

Distinctly Applicable Measures
These are measures that explicitly and directly discriminate against imports or exports based on their origin.

They apply only to imported products, treating them less favorably than domestic products.

Case: Commission v Ireland (Buy Irish)—Ireland ran a campaign encouraging consumers to buy Irish goods, which was distinctly discriminatory because it directly targeted imports.

Outcome: Such measures breach Article 34 and are prohibited, unless justified under Article 36 TFEU.

Question 22

What are the Justifications for Distinctly Applicable Measures?

Answer 22

3. Absence of Harmonization:
   The justification is only valid if there are no EU harmonization rules governing the issue.
4. These measures can only be justified under Article 36 TFEU, which provides a closed list of grounds, such as:

Listed Grounds:
- Public morality.
- Public policy or security.
- Protection of health and life of humans, animals, or plants.
- Protection of national treasures.
- Protection of industrial or commercial property.
- Proportionality:

2. The measure must be suitable for achieving its objective and necessary (no less restrictive alternative).

Question 23

What are Indistinctly Applicable Measures?

Answer 23

These are measures that apply equally to domestic and imported products but, in practice, may impose an additional burden on imports.

They are neutral on their face but can indirectly hinder trade because they disproportionately affect imported goods.

Cassis de Dijon (C-120/78)—Germany required specific alcohol content for liqueurs, which disproportionately excluded French cassis. This was an indistinctly applicable measure because it applied to all liqueurs but hindered imports more than domestic goods.

May be justified under certain conditions:

1. Serve a legitimate public interest (e.g., health, environment).
2. Are necessary and proportionate.

Question 24

What are the justifications?

Answer 24

Can be justified by the rule of reason (established in the Cassis de Dijon case), which allows for non-economic justifications:

1. Absence of Harmonization:
   As with Article 36, the justification is only valid if the EU has not harmonized the specific area (e.g., through a directive or regulation
2. Non-Economic Grounds:
   Examples include consumer protection, fair competition, environmental protection, or public health (broader than the Article 36 grounds).
3. Proportionality:
   The measure must be proportionate—suitable, necessary, and the least restrictive means to achieve the objective.

Question 25

Practical Example
Scenario: A Member State bans the import of energy drinks.

Answer 25

A. Is there harmonization?
If the EU has harmonized the issue, the Member State’s measure is likely unlawfu

Step 1: Does it affect intra-EU trade? Yes, because the ban applies to imported energy drinks.

Step 2: Is it an MEQR under Article 34? Yes, a ban hinders imports directly.

Step 3: Is it distinctly or indistinctly applicable?
If the ban explicitly targets imports, it’s distinctly applicable.
If the rule applies equally to domestic products but creates an extra burden for imports (e.g., requiring specific packaging), it’s indistinctly applicable.

Step 4: Can it be justified?
- Distinctly applicable: Check Article 36 (e.g., public health).
- Indistinctly applicable: Consider non-economic grounds like consumer protection under the rule of reason.

Step 5: Is it proportionate?
Could less restrictive measures achieve the same goal (e.g., labeling instead of a ban)?

Question 26

Steps to identify Customs duty and Charges of Equivalent Effect and Quantitive Restrictions or Measures of Equivalent Effect

Answer 26

1. Is there harmonization?
2. Is there a good?
3. Is there a cross border element?
4. Is there a restriction?
5. Is it distinctable or indistinctable?
6. Is a question of money? if its is a financial restriction could be a CD, CEE or QRM
7. Is not a question of money? Could be CEE or MEE
8. How does the proportionality test apply?

Question 27

How does the notification of drafts are related to the monitoring of trade?

Answer 27

MS need to inform the European Commission about draft technical regulations before they are adopted.

must happen before the regulation is adopted.

Direct Effect”: Consequences for Non-Notification If a Member State fails to notify the draft regulation to the Commission, the regulation becomes unenforceable. Private parties can invoke the invalidity of non-notified rules in contractual disputes.

Question 28

What is a technical specification?

Answer 28

refers to rules defining product characteristics, such as requirements for quality, performance, packaging, labeling, or production methods.

Question 29

What is a technical regulation?

Answer 29

is a legal requirement that sets out how a product must comply with specific technical specifications to be sold in the Member State.