FREE MOVEMENT OF GOODS

1. Removal of existing trade barriers, in the form of custom duties +

What is a single (internal) market?
The single market is an economic
policy pursued through legal
measures. Essentially its aim is to
create a 'fully free trade area'. It can
be established through:
import quotas etc. This is referred to as 'negative integration' because
it involves removal/abolition of existing trade rules
2. ‘Harmonisation' of national rules, measures relating to technical
standards and safety requirements. Referred to as 'positive integration'
as it requires the introduction of new EU-wide rules and standards to
enable a particular product to be sold and used anywhere in the EU.

Article 28 + 30 TFEU  Custom Duties

Article 28 + 30 TFEU  Charges having equivalent effect to custom duties
Article 110 TFEU  Discriminatory internal taxation on imported goods
Article 34 + 35 TFEU  Quantitative restrictions in imports/ exports + MEQRs
Article 37 TFEU  State monopolies of a commercial character
 What constitutes as 'goods'? Comission v Italy - 'products which can be valued in money and which are
capable, as such, of forming the subject of commercial transactions.'
 The EU is a free trade area par excellence
 It was always presumed that FGM provisions only applied to inter-state trade however it has been
proven that the Article may apply to purely internal situations as well.
 In Jersey Produce Marketing - the courts held that there was a breach of Article 28 and 35 TFEU in
respect of the legal requirement imposed on exporters of Jersey potatoes from the Channel Islands to the
UK. It was unfair and a breach that they were prohibited from exporting until they had a market
agreement with the association + that they had to pay it a contribution
Customs Union_____________________________________________________________
• Article 30 TFEU - 'customs duties on imports and exports and charges having equivalent effect shall be
prohibited between member states.’
• This can be seen to give effect in the case of Van Gend en Loos. The CCT makes goods from within the
EU more competitive than from those from third countries as those have to endure a duty on them.
• Article 28 + 29 TFEU recognise the existence of a customs union, common customs tariff in relation to
third countries while once that is paid they will be free in circulation between the member states.
• Custom duties are prohibited between member states as they are 'protectionist'- they make the imported
goods more expensive and less attractive than the rival domestic good. So the EU aims to facilitate trade
b/w MS
• Article 30 does generally have direct effect even though it is not stated explicitly, in the case of Dubois v
Garoner Exploitation, the court did indirectly indicate this was the case
Charges having an Equivalent effect to a custom duty____________________________
 The abolition of customs duties does not mean that goods remain free from all other charges, there are
multiple other payments can have an equivalent effect as a customs duty. These are called CEEs.
 In Comission v Luxembourg and Belgium the court defined equivalent charges as: 'duties whatever
their description or technique…which apply specifically to a product imported by a MS but not to a
national similar product and which by altering the price, have the same effect upon the fgm of goods as
a customs duty'
 ECJ gave a fuller definition of CEE in Comission v Italy: 'Any pecuniary charge, however small or
whatever its designation and mode of application, which is imposed unilaterally on domestic/foreign
products by reason of the fact that they cross a frontier'
 It does not have to be a tax that is physically imposed at border. It can be any tax imposed solely by
virtue of a good being an import from a member state.
 This law on CEEs also applies to goods imported directly from third countries (Diamantarbeiders).
That means a common customs duty may be imposed but no separate charges can be added by MS)
 The key feature is a ‘pecuniary measure’ which means that the concept relates only to fiscal measures.
Any charge no matter how small can breach Article 30 TFEU.
 The absolute prohibition on CEEs applies even where the money is not used for a protectionist purpose,
in Diamantarbeiders, Belgian law required all importers of uncut diamond to impose pay levy on
workers’ social benefit fund. The prohibition was absolute despite the purpose.

----The Exceptions----

1. Payment of Service - here a charge may be lawful if proportionate payment for a genuine administrative
service rendered to the importer/exporter. The charge to the importer/exporter must NOT exceed the cost
of the service. It must confer a tangible/ individual benefit to the imp/exporter, if it is for the 'general
interest' of all people in that trade then it will not qualify
 It will be lawful where the benefit paid is for a service actually rendered to the importer and the cost
charged for the service is based on the actual cost of providing it. (Commission v Belgium)
 Cadsky v Instituto Nazionale -
FACTS- Here there was an inspection on a charge levied by the Italian state for quality control of
exported vegetables. Italy argued that thus improved the reputation of all Italian produce and therefore
was of benefit to all exporters
DECISION -The benefit was too remote for an individual importer therefore could not be applied
 Ford Espana v Spain- Here again as the charge was on a flat-rate basis so it could not be a specific
service to an individual importer
 Showing that such a service benefits a specific importer will always be challenging
2. Charges for inspections mandatory under EU law - the exception applies when a member state
charges a fee for an inspection where the inspection is required under an EU directive and the directive
does not specify who has to pay for it.
 4 conditions must be fulfilled - 1) should not exceed the actual costs of the inspections 2) the
inspections in question are obligatory and uniform for all products in the Union 3) they are prescribed
for the general interest of the union 4) they promote FGM by avoiding certain obstacles
 Commission v Germany - here the veterinary inspections on imported animals mandated by community
law were exempted from (now) Article 30 TFEU.
 Bauhuis v Netherlands - Here union law required veterinary + public health inspections by the
exporting member states, It was held that these inspections would not hinder trade and the charges were
legal
3. If the charge falls into 'internal taxation' -
 If a charge or levy is properly labelled 'internal taxation' it must be judged according to Article 110 and
not Article 30. The ECJ set out the standard test in Nygard : 'a charge may not be characterised as a
customs duty.. If it forms part of the general system of internal dues applying systematically to
categories of products' then it would fall under article 110.
 Member states are generally free to apply taxes to their domestic products such as tobacco/petrol so as
long as their strict equivalence in the treatment of imp/exported goods then it is lawful to impose
domestic taxes on imported goods.
 In some cases taxes may apply when there is no equivalent domestic product - Cooperativa Cofrutta -
hardly any bananas were produced in Italy but the Italian 'consumption tax' applied to imported bananas
was considered to be part of the internal taxation system.

Article 110
The Aim: intended to prevent protectionism measures being applied against goods from other member
states once inside a member state's border
 Article 110 prohibits discriminatory taxation which favours discriminatory taxation which favours
domestic production over imports from other Member States. They want to achieve 'fiscal neutrality'
b/w domestic and imported goods
 Article 110 (1) It prohibits any taxation on imported goods that is imposed on imported goods in
excess of that imposed 'directly or indirectly' on 'similar' domestic products
 Article 110(2) prohibits internal taxation that gives 'indirect protection' to domestic goods
 Article 110 has been directly effective since Alfons Luttick. The discrimination against imported
goods may take an indirect or direct form.
 Article 110(1): ‘No Member shall impose, directly or indirectly, on the products of other Member States any internal
taxation of any kind of excess of that imposed directly or indirectly on similar domestic products.’

 It targets discrimination in internal taxation of goods b/w goods based on their country of origin. It can
occur between similar products therefore Art 110(1) is the test for the similarity of goods
 The ECJ interprets 'similarity' widely while taking into account: 'objective characteristics' of the product.
The relevant characteristics could be: 1 Composition; method of manufacture 2 Taste, alcohol content
3 whether the two products are capable of meeting the same needs of consumers
Commission v UK (wine and beer) - It was held that they were not similar as different raw materials and
production methods were used in their production.
 The test of similarity determined on the basis of having a similar use rather than strict similarity
If products are NOT 'similar' then they can fall under  Article 110(2) competing products instead?
 Here the test of fulfilling the same need comes in as even if wine and beer are not similar. Due to greater
imported goods there were greater options available to people and they may want to try new things and
that should not be discouraged because of high taxes. 'Light wines' on the cheaper end were seen to be
competing products.
Commission v France - France imposed a higher tax on light tobacco cigarettes than on dark ones. The ECJ
decided that since they were made from the same raw materials  similar products
Commission v Denmark – Here the court accepted that wine made from grapes and wine made from other
fruits was ‘similar’ even though the alcohol content was achieved in different ways. They could satisfy the
same needs of consumers.
Direct or Indirect Discrimination?
 Different tax rates apply depending on the country of origin of the goods, or on whether they are home
produced or imported  Direct discrimination on basis of the origin
 Direct Discrimination involves less favourable treatment of imported products
Lutticke v Hauptzollamnt – powdered milk from Luxembourg was imported into Germany but was subject
to a tax that was not applicable on domestically produced goods.
 Direct discrimination may also exist in less obvious ways, where an imported good is taxed at a higher
rate or the method for calculating the tax for imported goods is less favourable
Commission v Ireland – importers expected to pay the charge immediately, exporters given more time.
Haahr Petroleum – The tax imposed here was only imposed on the goods loaded from the ships that were
arriving from outside of Denmark, therefore it constituted as direct discrimination on basis of origin.
 Duty levied on imported goods that did not take into consideration the age and market value of the
vehicle in comparison to levies on domestic vehicles, breached Article 110.
 Indirect Discrimination The tax appears to be neutral and makes no reference to the origin of the
goods, but the basis on what the tax is levied depends on a feature which in practice only occurs in
imported goods. In reality imposes a ‘practical and particular’ burden on imported goods
 The result of an indirect tax is that It provides protection for domestic products, it is necessary that they
have a ‘protective effect’
Humlot -
Facts: France based an internal tax system on cars based on their engine capacities, for cars over a certain
engine capacity there was flat rate of tax
Decision: Although the system did not directly discriminate, it indirectly discriminated against them since
France itself did not produce cars with that engine capacity.
Commission v Greece – here although the facts were similar to those of Humlot, the tax could be justified
in the interest of protecting the environment.
Tatu v Statul – ‘Article 110 applies whenever a fiscal charge is liable to discourage imports of goods
originating in other member states in favour of domestic goods.’
Danske – no breach of Art 110, as all the cars were imported so no Danish products to be protected
 The court does allow the defence that if there was an objective policy reason, which is acceptable to the
Union, to justify the state’s action. This was to prevent the treaty articles being too harsh in application.
What happens when Article 110 TFEU is breached?
Similar products under 110(1)  Member states are required to ensure strict equivalence in the tax applied, if there is a
sliding scale then the imports are to be placed on the lowest point of that scale (Bobie)
Competing products under 110(2)  Not necessary that the rates of tax are identical however the member state must ensure
that the rates are such that there is no ‘protective effect’ for the competing domestic products (Commission v Belgium)
  Article 110 does not apply to goods imported from a third country where the EU has no such agreement
in (Texaco v Danish Imports)

Article 34-36 TFEU – Quantitative Restrictions + MEQRs

 Article 34 TFEU prohibits quantitative restrictions on imports and all measures having equivalent effect
to quantitative restrictions. Article 35 TFEU contains the same prohibitions in relation to exports, the
scope of Article 34 TFEU was cast very wide, indeed its “potential breadth…is striking”.
 Quantitative Restrictions (QRs): ‘quotas’ or limits to the number of goods which can be imported from
one country into another. Such quotas are prohibited between member states under Art 34 since it is
directly aimed at imports therefore it is discriminatory.
Geddo: ‘measures which amount to a total or partial restraint of…imports, exports or goods in transit’
Henn v Darby saw this as being one of the most extreme type of prohibitions, even other than positive
actions, a failure to act against them by a MS can also breach Article 34 (Schmidberger)
Establissements Delhaize Frères – Spanish law set quotas on the bulk export of wine while placing no
restrictions on domestic sale. Belgian company ordered an amount, export was not permitted under Spanish
rules. The law was found to be on QR of exports and illegal under Art 35 TFEU.
 Measures having Equivalent effect to a quantitative restriction (MEQRs) – provided in the directive
70/50. Focused on ‘discriminatory measures’ or ‘distinctly applicable measures’ as these only apply to
imports and ‘make importation more difficult or costly than the disposal of domestic production’
Distinctly applicable measures (Article 2 of directive) – imports are identified specifically in them and
placed at a disadvantage
Indistinctly applicable measures (Art 3) – measures which equally cover domestic + imported goods
Article 3, the directive says that Article 34 also covers:
‘measures governing the marketing of products which deal in particular, with shape, size, weight, composition,
presentation, identification or putting up and which are equally applicable to domestic and imported products, where the
restrictive effect… exceeds the effects of intrinsic trade rules’

 These will be generally acceptable unless they are ‘out of proportion to their purpose’ and ‘the same
objective cane be achieved by other means which are less of a hindrance to trade’
 For article 34 TFEU to apply there must be a state measure, Commission v Ireland – The Irish goods
council was found to have state funding therefore the council was a public authority and it was capable
of issuing relevant state measures therefore it was subject to Article 34.
 Commission v France – COJ held that inaction by state in the face of organised and persistent
disruption by French activists could also lead to breach of Article 34.
-----MEQRs-----
 The ECJ’s broad interpretation of MEQRs has made article 34 a powerful weapon to target national rules
which restrict the free movement of goods.
 The main aim of Article 34: intended to prohibit discriminatory measures against imports, ECJ
broadened the scope to that it does not solely prohibit those measures which are discriminatory in law
but also those that have a discriminatory effect in fact.
 Discriminatory in law – apply equally to domestic products as well as imported goods
 Discriminatory effect in fact – apply equally however in effect impose extra burden on imported goods
Procureur due Roi v Dassonville defined MEQRs – ‘all trading rules enacted by member states which
are capable of hindering, directly or indirectly, actually or potentially, intra-community trade are to be
considered as MEQRs’ < COJ here did not distinguish b/w distinctly/indistinctly applicable MEQRs
 This definition more so focuses on ‘hindrance’ rather than direct ‘discrimination’
Buy Irish Campaign – a government sponsored campaign to buy Irish products on the basis that they were
locally produced was a clear breach of Article 34.
Evans Medical – Breach of Article 34 when only importers required a licence
Rewe-Zent – Hygiene inspections may also infringe Art 34 as they added delay and expense
In comparison in indistinctly applicable MEQRs the discrimination is not always obvious and can be
disguised or hidden. They can usually be targeting
 Origin marketing requirements
 Packaging requirements (Walter Rau- margarine can only be sold in cube packaging)
 Name Restrictions (Deserbais- restricted cheese name to specific fat content)
 Contents, ingredients and process restrictions
-----Derogations under Article 36 TFEU------
 The prohibition of quantitative restrictions and MEQRs in Article 34 and 35 TFEU is NOT absolute,
Article 36 permits derogations from Article 34 and 35, allowing those measures to be justified as long as
they are proportionate.
 The rationale behind Article 36 TFEU is that there are in some cases some overriding considerations that
take precedence over the freedom to move goods, in order for any of those to apply however the reason
must be 1. Proportionate 2. Necessary 3. Least restrictive option to take
The treaty provides that such measures may be justified on one of the grounds mentioned in Article 36:
1) Public Morality – Each Member state is allowed to determine what constitutes public morality for itself
this was set out in Henn v Darby, here a prima facie ban on import of pornography was justified
Conegate Ltd v HM Customs and Excise, The courts confirmed that Article 36 must not be used to
support ‘arbitrary discrimination, or disguised restrictions’
2) Public policy – in very rare cases this ground has been successful, it cannot be used for purely economic
reasons (Commsission v Italy)
R v Thompson, Johnson – Ban on export of silver coins was seen to be justified under 36 as the aim was to
prevent them from being destroyed or melted + fundamental interest of state
R v Chief Constable of Sussex – Successfully pleaded, here the HOL decided that where the animal right
protestors were blockading the port to stop the lawful export of veal calves to France, this ground could be
applied as the state’s responsibility to ensure free movement of goods had to be balanced with both rights of
residents + those of peaceful protestors.
3) Public Security – Campus Oil- Facts: Campus oil when they imported oil to Ireland had to buy 35% of
their requirement from the State Oil Refinery.
Decision: The maintenance of regular oil supplies, were a legitimate aspect of public security however the
court must look at if this req was necessary for the survival of the state refinery.
Richardt – the importation and exportation of strategic goods could affect the public security of the member
state and so the rule was justified
4) The Protection of health and life of humans, animals and plants
 The COJ will consider whether the risk to health is genuine or a disguised trade restriction
(Commission v UK)
 Any extensive inspections, even if no charge do cause delay and are a ‘hindrance’ to importation.
 Klas Rosengren – a Swedish measure prohibited the import of alcohol by private individuals, they’ll
rather have to ask the owners of retail companies to supply. The courts felt that this was not
proportionate for protecting young people from harmful effects of such consumptions
 The court will take into account the attitude of other member states + international health bodies such
as WHO when deciding whether particular pose a risk to health. In Commission v Germany
(Additives in Beer), the court was not swayed by the argument that these additives caused a greater
danger in Germany because people consumed more beer over there.
 Criminal Proceedings against Ditlev Bluhme- a ban on imported bees into Danish island to protect
native bees from more aggressive species was seen as justified + proportionate
 When there is not much scientific data available to see the health impact of certain products, then ms
can decide using a ‘precautionary principle’ (Sandoz)
  Commission v Denmark – Member states can develop their own precautionary principles where the
precise risks to health are uncertain, but they need to be  necessary + proportionate
 Commission v Netherlands – the court said proper application of precautionary measures required:
1. Identification of potentially negative consequences for health
2. Comprehensive assessment of risk for health looking at most scientific data, research
3. The likelihood of harm to materialise + pose risk for public is great
The burden of proving any of these conditions lies with the member state.

Cassis de Dijon – The approach to ‘indistinctly applicable measures’

Prior to Cassis, it was assumed that any measure falling within Dassonville formula would breach Article 34
and could only be justified under Article 36. Since Cassis, at least where there are indistinctly applicable
measures courts may apply the ‘rule of reason’ to Article 34 TFEU. The mandatory requirements given
under Cassis are wider than those derogations given under Article 36.
Facts: German liquor producer importer refused permission to import since the liquor did not contain
minimum of 25% of alcohol.
Held: Under the principles of ‘mutual recognition’ a product lawfully marketable in one member state
should be freely marketable in another.
 These measures imposed a greater burden on imported goods, imported goods have to satisfy the
standards both set in their home state as well as the importing state and this creates a ‘dual burden’
 Cassis laid down the principle of ‘mutual recognition’. The court also ruled that where there are no
harmonised EU law rules present, the member states can still have their own rules for domestic
producers.
However they can only require imported goods to comply with national rules if:
- rule in question applies equally to domestic products
- rule is necessary to protect an essential public interest (mandatory requirement)
- It is proportionate
The Cassis de Dijon ‘mandatory requirements’
 These provide an additional list on grounds which member states can justify imposing national rules
on imported goods (not exhaustive), however unlike under Article 36, these can only be used to
justify indistinctly applicable rules.
1) Consumer protection: Walter Rau – Belgian rules stated that margarine sold in Belgium must be in
cube-shaped containers in order to avoid confusion with butter. Any importers who used to package
margarine in tubs or rectangular shaped boxes suffered greater costs switching. The court held that
clear labelling would be sufficient to protect consumers, this was disproportionate.
Consumer protection claims were upheld in cases like Oosthoek and Bluet.
2) Public Health (Aragonesa) – Article 36 provides a derogation under this
3) Protection of the environment: Comission v Austria, Austria had put in place a ban on Lorries over
7.5 tonnes transporting certain goods using the A12 highway. They had declared they wanted to shift
transport of such heavy goods from road to rail. The court held this was justified under the
mandatory req however was NOT proportionate as no alternative means of transport established.
Commission v Denmark: ‘the protection of the environment is one of the Union’s essential objectives,
which may justify certain limitations of the principle of free movement of goods’ (COJ)
4) Culture – Cinétheèque – prohibition on the sale or rental of films until the film was released in
cinemas was justified, as it preserved the culture + encouragement of cinematographic work
5) Protection of national or regional socio-cultural characteristics
6) Plurality of press – Familiapress v Bauer Verlag
7) The protection of fundamental rights – Schmidberger, right to protest peacefully
 Any justification must be proportional, Commission v France (COJ) : ‘the member states must comply
with the principle of proportionality…confined to what is actually necessary to ensure safeguarding of
public health etc.’
The most fundamental difference between Article 36 and Cassis de Dijon is that the mandatory requirements
can only be invoked when the measure is indistinctly applicable. If the national rule is discriminatory then
then Article 36 should be used.
 Dassonville  very wide scope, much uncertainty and debate. This prospect that such national rules fell
so easily under Article 34 was reconsidered by the court and Keck amended the framework.

Keck: Delineating the scope of Article 34 TFEU

 The very wide definition of MEQRs in Dassonville, combined with the extension in Cassis de Dijon
proposed a number of issues. The main shift that keck caused was that the national rules now will not see
‘selling arrangements’/ way the goods are marketed as being a hindrance to intra-community trade.
 Advocate General Slynn in Cinéthèque recognised that some of these rules were not even intended to
restrict imports and did not have any negative effect on the importers. However because of the cases,
they still fell in the scope of 34 and had to be justified under 36 or mandatory requirements.
 ‘Sunday Trading Cases’ issue came forward, here the national law restricted what kind of goods could
be sold on Sunday. This placed an equal burden on local + imported goods but the ECJ still required a
justification
 Keck – Court accepted that there must be a limit placed on the type of measures that fall within the
ambit of Article 34 TFEU. The court declared that contrary to what has been decided before, Article 34
would not be applicable to ‘certain selling arrangements, provided that they apply to all relevant
traders…affect in the same way in law and in fact, the marketing of domestic products and those from
other member states’
 In Keck the court saw  increasing tendency of traders to invoke article 34 where it was not even aimed
at items from MSs. Need to ‘re-examine and clarify’ the law
 ‘product requirements’ – affect the goods themselves, still governed by existing rules of discrimination
and dual burden measures (for e.g. having to change physical appearance of good/packaging)
 ‘Selling arrangements’ – do not require a change to the product itself but rather how its marketed
 ‘product requirements’-same law applied, changes were made to law in relation to ‘selling arrangements’
Selling Arrangements
Post Keck it now clear that national rules imposing partial restrictions on advertising will not fall within the
article since they are ‘selling arrangements’. Hunermund –fulfilled the keck test
Clinque – Facts: German law prohibited the name ‘clinque’ because the consumers might get confused and
think it had medical properties. Decision: COJ felt it was disproportionate to its objective
KO v De Agostini – measures against a TV broadcasting from another MS did not fall within 34 as long as
they affected marketing of local + imported goods the same way.
Verein – promotion printed on mars was considered to be part of the product itself
Familiapress – the prizes and crossword puzzles were as being part of the magazine itself since it was part
of the contents therefore it wasn’t seen as a selling arrangement.
Leclerc-Siplec – Advocate General Jacobs recognised a few problems with the Keck formula. imported
goods + total restrictions on advertising will not be under ‘selling arrangements’. A total restriction would
not allow the importer to be known in the local market at all
The Market-Access Test
Schutzverband – Here there was discrimination in fact as here the local businesses were allowed to make
home rounds to sell their goods however this importing business was not. This ‘impeded the access to the
market’ of the member state of imported goods more than domestic products
Gourmet International Products – Facts: the importers were prevented from putting advertisements of
alcohol beverages in magazines. Put an advertisement in a magazine that contained ads for wine + whiskey.
Decision: ECJ rejected the argument that this fell within the scope of Keck, here the rule affected the
marketing of products from other MSs more than domestic goods-prohibited by Article 34 TFEU.
When they are making a justification on grounds of public health, national court must determine:
- Whether it was proportionate?
 - Whether the ‘the protection of public health against the harmful effects of alcohol can be
ensured by measures having less effect on intra-community trade’
The End of Keck?
 The application of the Keck test continues to trouble the CJEU. Commission v Italy – here the courts
found that the national measure limited the use of aforementioned trailers, preventing a demand for such
products and therefore hindering their importation’
 Mickelsson- Attorney General Kokott, here they relied on Cassis de Dijon if a restriction has a
considerable influence on the behaviour of consumers which in turn affects the access of the product to
the market in the member state then it can be a breach and it CANNOT rely on ‘keck’