nEU LAW 2023/2024:

TOPIC 7:

FREE MOVEMENT OF GOODS: TARIFF AND NON-TARIFF BARRIERS TO TRADE

TUTORIAL AND SECOND FORMATIVE ASSESSMENT

Week Commencing: 12 February 2024 (odd weeks) and 19 February 2024 (even
weeks)

Aim and Learning Outcomes:

Aim: The aim of this topic is to consider the substantive rules which provide for the
creation of a single market in goods. In the tutorial, students will have the
opportunity to self-assess their understanding of the substantive rules and their
application to a hypothetical scenario.

Learning Outcomes: By the end of this topic, you should be able to complete the
following:
• Identify the different forms of fiscal barriers to trade, and distinguish
between them;

Art 28-30  charges equivalent

Art 34/5  MEQR, quantitive measures having equivalent effect

Art 110  direct/indirect discriminatory tax; internal

• Explain the need for rules prohibiting non-fiscal barriers to trade;

Non fiscal barrier = regulatory autonomy and no automatic mutual recognition

Fiscal = the TCA manages to an extent to avoid

Enables more free trade

• Explain what is meant by ‘quantitative restrictions’ and ‘measures having

equivalent effect to quantitative restrictions’ (MEQR), provide examples of
the types of national practices which may be caught by the prohibition on
MEQRs, and critically assess the scope of Article 34 TFEU as determined by
the Court of Justice;

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 - ‘Measures which amount to a total partial restraint of, according to the
circumstances, imports, exports or goods in transit goods in transit’:
Case 2/73 Geddo
- Art 34 ‘quantitative restricions on imports and all measures having equivalent
effect shall be prohibited between MS’
- Art 35 ‘Quantitative restrictions on exports, and all measures having
equivalent effect shall be prohibited between MS’

Two different arguments:

- Removing obstacles to trade, not merely those which discriminate or are
protectionist
- Can ALL obsacles be regulated?  CJEU showed uncertainty, Keck was
protectionist, Cassis less so
- Argument between distinctly applicable and indistinctly applicable

• Explain the grounds on which quantitative restrictions and MEQRs may be

deemed lawful and be allowed to stand;

Justification under art 36

• Determine, through application of legal authorities, and by analogy, whether

barriers to trade in goods are lawful or unlawful.

Essential Reading:

Legislation:

Articles 3, 26, 28-36, 110-113 TFEU

Textbooks:

Craig & de Burca, EU Law: Text, Cases and Materials, UK Version (7th edition,
2020, OUP) Chapter 19 & Chapter 20.

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Case law:

For this topic (and not just for the formative assessment), ensure you are familiar
with the significance of the cases cited in lectures ESPECIALLY:

Tariff barriers to trade

Case 24/68 Commission v. Italy (Statistical Levy) = definition of CHEE, art 30

Cases 2 and 3/69 Sociaal Fonds voor de Diamantarbeiders = CHEE never allowed,
fund for social workers

Case 87/75 Bresciani [1976] ECR 129 = art 30 exception, individual interest of
importers

Case 18/87 Commission v. Germany (Live Animals) = art 30 exception, fee for Union
law is acceptable

Case 112/84 Humblot v Directeur des Services Fiscaux [1985]

ECR 1367.

Case C-132/88 Commission v. Greece [1990] ECR I-1567 = art 110

Case 243/84, John Walker [1986] ECR 875. = art 110

Case 170/78 Commission v. UK (Beer and Wine) [1983] ECR 2265. = beer and wine
are competing and taxation should be applied evenly

Case 193/85 Cooperativa Co-frutta SRL v. Amministrazione delle Finanze dello Stato
[1987] ECR 2085.

1. Case 24/68 Commission v. Italy (Statistical Levy):

- Facts: Italian levy on goods crossing the border
- Question of law: Whether Italy's imposition of the statistical levy on imported
goods constituted a breach of its obligations under the Treaty establishing the
European Economic Community (EEC).
- Argument reasoning: CoJ defined a CEE as "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, and
which is not a customs duty in the strict sense" The case concerned the levying of a
small fee (only 10 lira) on imports and exports to fund statistical surveys. Although
the fee was small it was still found to be an impediment to the free movement of
goods and therefore a breach of Article 30 of the TFEU.

2. Cases 2 and 3/69 Sociaal Fonds voor de Diamantarbeiders:

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 - Facts: Belgium imposed a charge on diamonds imported into Belgium to
contribute to a social fund for workers in the diamond industry was found to be a
CHEE even though the state did not benefit
- Question of law: Whether Belgium's levy on imported diamonds constituted a
breach of its obligations under the EEC Treaty.
- Argument reasoning: the CoJ established a threefold test which requires that the
charge must be imposed at the time of importation or subsequently, imposed
specifically upon a product imported from another member state to the exclusion of
a similar national product, and must result in a variation in the price of the product

3. Case 87/75 Bresciani [1976] ECR 129:

- when the charge relates to acion taken by the stae with respect of specific
imported goods, the Court has been relucant to accept that it can be characterised
as consideration for a service rendered
o Court rejected first Italian argument  the fact that the charge was
proportionate to the quantity of imported goods made no difference
since art 30 TFEU prohibits any charge imposed on goods crossing a
border
o Second argument [10] the argument had plausibility  if you wish to
iimport a product tha requires health inspection, then you, the
importer should bear the cost  court’s response is unequivocal, the
pubic should bear the cst of inspections to maintain public health
- Argument reasoning: CoJ found that charges in connection with veterinary
inspections were not acceptable because they were not in the individual interest of
the importers

4. Case 18/87 Commission v. Germany (Live Animals):

- Facts: Germany imposed stricter veterinary checks on imported live animals
compared to domestic live animals.
- Question of law: Whether Germany's veterinary checks on imported live animals
constituted a breach of its obligations under the EEC Treaty.
- Argument reasoning: The CoJ found that fees charged for animal inspections
which were required by an EU Council Directive were acceptable. The case also
highlighted that fees were acceptable if they were in consideration for services
rendered and proportionate to that service.

5. Case 112/84 Humblot v Directeur des Services Fiscaux [1985] ECR 1367:
Michel Humblot sought repayment of tax levied at a single and considerably higher
rate on certain vehicles the grounds that the imposition of the special tax was
contrary to Articles 30 and 110 TFEU. In 1981, two different types of annual tax on
motor vehicles in France: (1) a differential tax to which cars rated at less than 16 CV
[fiscal horsepower] which increased progressively and uniformly with the power
rating for tax purposes and (2) a special tax on vehicles rated at more than 16 CV
(fixed rate)•Mr Humblot bought a car rated at 36 CV and had to pay the special tax
(FF 5,000). After paying that sum Mr Humblot brought a complaint before the tax
administration with a view to obtaining a refund of the difference between that sum
and the highest rate of the differential tax (FF 1,100) (para 4)•Held: While the

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Member States are at liberty to subject vehicles to a system of road tax which
increased progressively in amount depending on an objective criterion, such as the
power rating for tax purposes, the system of domestic taxation was compatible with
Article 110 TFEU only if it was free from any discriminatory or protective effect
(paras 12-13)

6. Case C-132/88 Commission v. Greece [1990] ECR I-1567:

Greece had a system of taxation consisting of consumption tax and the single
supplementary special tax payable upon the purchase or importation of a new or
second-hand car, which allegedly discriminated against private cars with a cylinder
capacity in excess of 1800 cc imported from other Member States•Held: The
progressive nature of the special consumption tax and the single supplementary
special tax … had nothing to do with the determination of the taxable amount for
imported second-hand cars (para 14)•Whether the tax had a discriminatory or
protective effect in such a way as to benefit domestically produced cars, it was
necessary to consider whether they are capable of discouraging consumers from
purchasing cars of a cylinder capacity in excess of 1800 cc, which were all
manufactured abroad (para 19)•If the Greek taxation system discouraged consumers
from purchasing cars of a cylinder capacity greater than 1800 cc, those consumers
would choose a car with cylinder capacity between 1600 and 1800 cc or a car with
cylinder capacity <1600 cc (para 20)•All the models in the 1600-1800 cc range were
of foreign manufacture. Models with < 1600 cc included cars of both foreign and
Greek manufacture -> the system of taxation did not have the effect of favouring the
sale of cars of Greek manufacture (para 20)–Compare: Fiat Punto 1242 cc / Golf GTI
1984 cc / Ferrari 412 MI 4000 cc

7. Case 243/84, John Walker [1986] ECR 875:

- Question of law: whether whiskey should be considered equivalent to fruit wine
- in order to determine whether the taxation imposed on each producer should be
the same. Although both drinks were alcoholic there were significant differences
which meant the products were not equivalent for taxation purposes.

8. Case 170/78 Commission v. UK (Beer and Wine) [1983] ECR 2265:

it was found that beer and wine should be considered to be competing products and
taxation applied to both evenly

9. Case 193/85 Cooperativa Co-frutta SRL v. Amministrazione delle Finanze dello

Stato [1987] ECR 2085:
- Facts: 1982: the Italian company Co-Frutta imported Columbian bananas, from the
Benelux countries, where they had been in free circulation, and was charged with the
excise tax - Co-Frutta claimed that the tax violated Art. 30 TFEU and brought an
action for the repayment of the tax before the District Court of Milan - The District
Court of Milan referred relevant questions of EU Law to the Court of Justice for a
preliminary ruling - The Commission also had concerns about the bananas tax -
1983: The Commission sent a letter to the Italian government, arguing that the tax
violated Art. 110 TFEU - 1984: The Commission followed up with a more detailed

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reasoned opinion on why it considered the tax to be in breach of Art. 110 TFEU - The
Italian government didn’t react to this opinion - 1985: The Commission then filed an
infringement action with the Court of Justice

Conclusion: Here we have a general system: there are 18 other consumption taxes,
which were governed by common tax rules and are charged not on the origin of the
products but in accordance with objective criteria (namely the fact that the product
falls into a specific category of goods), not a custom duty – it’s not because they are
foreign products but because Italy thinks consumption goods should be taxed
Non-tariff barriers to trade

Case 2/73 Geddo [1973] ECR 865.

Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837. = MEQR, certificate of
origins

Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (‘Cassis

de Dijon’) [1979] ECR 649. = art 34 applies to indistinct measures

Cases C-267/91 and 268/91, Criminal Proceedings against Keck and Mithouard
[1993] ECR I-6097. = dual burden and MEQR

Cases C-34-36/95 De Agostini [1997] ECR I-3843.

Case C-405/98 Gourmet International [2001] ECR I-1795.

Case C-110/05, Commission v Italy (Trailers), [2009] ECR I-519.

C-265/95 Commission v. France (Spanish Strawberries/French farmers case)

C-112/00 Schmidberger [2003] ECR I-5659.

1. Case 2/73 Geddo [1973] ECR 865:

Definition of quantitative restriction
‘any measures, which amount to a total or partial restraint on imports or exports or
goods in transit.’ These include palpable restrictions such as the amount or value of
imports permissible such measures are altogether unlawful unless justified by an
express Treaty derogation under Article 30 EC. In addition the more extensive
authority and scope of the definition of ‘a measure having equivalent effect to a
quantitative restriction.’

2. Case 8/74 Procureur du Roi v Dassonville [1974] ECR 837:

defined a measure having an effect equivalent to a quantitative restriction as: “all
trading rules enacted by Member State which are capable of hindering directly or
indirectly, actually or potentially, intra-Community trade” also known as the
“Dassonville” formula the decisive component is demonstrating an effect of

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restricting the movement of goods immaterial as to whether a discriminatory intent
exists the measures are distinguished into distinctly or indistinctly applicable
measures the presence of a Finnish law making blood pressure monitors
merchandisable only in pharmacies indicates that the law applies to both domestic
and imported products without distinction as a result it would be categorized as a
indistinctly applicable measure defined in Article 3 of Directive 70/50 which is no
longer applicable but provided guidance so would a measure which did not
differentiate between domestic or imported be illegal

3. Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein

('Cassis de Dijon') [1979] ECR 649:
the court held that there are no valid reasons why a product that is lawfully
produced and marketed in one member state should not be introduced in another
member state

4. Cases C-267/91 and 268/91, Criminal Proceedings against Keck and Mithouard
[1993] ECR I-6097:
drew a distinction between obstacles to the free movement of goods arising from
intrinsic characteristics of the goods and selling arrangements of the goods which is
significant to this scenario the ECJ stated that selling arrangements are not
considered to hinder directly or indirectly trade but are not considered to be a
derogation to article 28 but are infact outside its scope altogether.

5. Cases C-34-36/95 De Agostini [1997] ECR I-3843:

- Facts: Sweden banned TV ads directed at children under age 12, and banned
misleading commercials for skin care products and detergents. The Swedish
Consumer Ombudsman prosecuted one trader for a magazine called Everything You
Need to Know about Dinosaurs, for children under 12. It prosecuted another for
marketing a soap called "Body De Lite", in breach of the misleading ad rule.
- Argument reasoning: The Court of Justice held that these were certain selling
arrangements. While under Keck the measure applied universally to all traders in a
territory, it did not necessarily affect all traders the same in law and fact. If the
national court found an unequal burden in law or fact, it would be caught, and would
then have to be justified under art 36 or a mandatory requirement.

6. Case C-405/98 Gourmet International [2001] ECR I-1795:

- Facts: Sweden banned advertisements for alcohol on the radio, TV and in
magazines totally (with a few limited exceptions for magazines aimed solely at
alcohol suppliers and traders). Sweden argued the measure was lawful because
there had been a constant increase in wine sales, mostly imports, and additionally
that the ban applied to all alcohol, whether Swedish or not, and so the ban did not
have a disproportionate impact on importers.
- Argument reasoning: The Court of Justice held the law infringed art 34 but it
could be justified on public health grounds if it was proportionate. The ban having an
effect on cross-border supply of advertising space breached TFEU art 56 on free
movement of services, but this could again potentially be justified on grounds of
public health. The court held that it was therefore the role of national courts to

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decide on a case-by-case basis whether the prohibition in question was
proportionate

7. Case C-110/05, Commission v Italy (Trailers), [2009] ECR I-519:

- Facts: Italian law prohibited motorcycles and mopeds from pulling trailers (that is,
it regulated the use of a product). It applied without regard to the origin of the
trailers, but it only affected imported goods in fact. Italian manufacturers did not
make such trailers to be towed by motorcycles. The Commission challenged the
Italian law as being contrary to TFEU article 34.
- Argument reasoning: Court of Justice held that a measure hindering market access
would be considered a measure equivalent to a quantitative restriction on trade, but
that it could be justified on the facts.

8. C-265/95 Commission v. France (Spanish Strawberries/French farmers case):

- Facts: French farmers sabotaged imported agricultural produce, such as Spanish
strawberries and Belgian tomatoes, and French authorities turned a blind eye. The
Commission brought enforcement proceedings under TFEU article 258 for ‘failing to
take all necessary and proportionate measures’ to prevent the obstructions to trade
by the farmers. It argued the failure contravened TFEU article 34 in conjunction with
TEU article 4(3) on the duty of cooperation (ex article 10 TEC).
- Question of law: Whether France's ban on Spanish strawberries violated the
principle of free movement of goods within the EU.
- Argument reasoning: The Court held that France's ban on Spanish strawberries
constituted a non-tariff barrier to trade and violated the principle of free movement
of goods within the EU.

9. C-112/00 Schmidberger [2003] ECR I-5659:

- Facts: Environment protesters blocked a highway in Austria that the applicant’s
trucks used to transport goods between Germany and Italy; the protesters had
sought prior authorisation from Austria authorities who decided not to ban it; the
applicant argued that the decision of Austria authorities no to ban the protests
amounted to a restriction on trade incompatible with Articles 34 and 35 of the TFEU
- Question of law: Whether Austria's lack of restrictions on demonstrations violated
the principle of free movement of goods within the EU.
- Argument reasoning:

Fundamental rights
According to settled case-law, fundamental rights form an integral part of the
general principles of law the observance of which the Court ensures: [71]
‘… the protection of those rights is a legitimate interest which, in principle, justifies a
restriction of the obligations imposed by Community law, even under a fundamental
freedom guaranteed by the Treaty such as the free movement of goods’: [74]
The exercise of the fundamental rights of freedom of expression and freedom of
assembly are not unqualified: [80]

Proportionality
The competing interests must be weighed such that a fair balance is struck: [81]

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While national authorities enjoy a wide margin of discretion in that regard, but it is
for the Court to determine whether the restrictions are proportionate: [82]
In the present case, the decision was proportionate, considering a range of
circumstances including:
the protest was limited to a single lane and a single occasion thus limiting the impact
on trade: [85] citizens were expressing an opinion which they considered to be of
importance to society and the purpose of that public demonstration was not to
restrict trade in goods of a particular type or from a particular source: [86]
government measures were taken to limit as far as possible the disruption to road
traffic: [87] denial of authorisation could have lead to unauthorised protests: [92]

Preparatory Questions:

To answer the problem question successfully, it is important to be able to define the

following distinctions, supported by appropriate legal authorities:

 custom duties vs. charges having an equivalent effect to custom duties vs.
discriminatory internal taxation.

Custom duties = a charge applied when an item crosses a border

CEE = art 28-30 a charge when crossing a boarder not may not explicitly be customs
duties but have a similar effec
Discriminatory internal taxation = internal taxation caught under art 110

 direct vs. indirect discriminatory internal taxation.

Direct through income tax, and indirect for sales

 quantitative restrictions vs. measures having equivalent effect to quantitative

restrictions.

Quantitative restriction = ‘Measures which amount to a total or partial restraint of,

according to the circumstances, imports, exports or goods in transit’: Case 2/73
Geddo v. Ente Nationale Risi [1973] ECR 865.
MEQR = having same effect but not explicit

 distinctly applicable rules vs. indistinctly applicable rules.

Distinction made in Keck

Distinguish  distinctly apply to imports, this is direct discrimination
Apply ostensibly without reference to natioinal origin  ‘indistinclty appliacable’
may be indirect discrimination against imports

 single burden vs. dual burden rules v. equal burden rules.

 Weatherill and Beaumont note a distinction can be made between termed

dual burden rules and equal burden rules

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 o Cassis concerned dual burden
 Equal burden  should fall under art 34 subject to justification/controverseil
o Keck shows the controversy  does not relae to the characeristics of
the goods

Single burden rules  these are regulations or taxes that impose a burden on eiher
domestic or imported goods, but not both
Dual burden rules  regulaions or axes that impose a burden on both domestic and
imported goods, burden may be differen for each
Equal burden rules  regulations or taxes impose the same burden on both
domestic and imported goods

 product requirements, selling arrangements and product-use requirements.

 Product requirements: These are standards or specifications that products

must meet to be sold in a particular market.
 Selling arrangements: These are rules or practices related to how products
are marketed, distributed, or sold within a market.
 Product-use requirements: These are regulations or standards governing how
products can be used or consumed within a market.mandatory requirements
vs. derogations.

 Mandatory requirements vs. derogations:

Mandatory requirements: These are regulations or standards that must be met for a
product to be sold or used within a market.

Derogations: These are exceptions or exemptions from certain regulations or

standards, often granted under specific circumstances or for specific purposes.

Question/Formative Assessment:

1. For this tutorial, you are required to write up an answer for the problem
question. We recommend you write up to 1000 words as this will mirror what
you are required to do in the summative assessment. You should think about
the Treaty provisions and case law you will refer to in your answer.
2. In the session, you will first discuss your answer in small groups. The tutor
will go through the topic and problem question with you clarifying any areas
of difficulty. You may be asked to present elements of your answer to the
class for feedback.
3. You will then be asked to self-assess your answer awarding a grade or band
classification and identifying three ways in which you can improve your
answer. You may find the following materials useful when conducting the
self-assessment:

 The feedback given to you in the tutorial from your tutor and peers.
 The standard LLB marking criteria for written assessments.

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 4. Bring your answer and self-assessment with you to lectures in week 5 where
we will give generic feedback on how the problem question could be
answered. We will also discuss some sample answers from each grade band.
You will have the opportunity in this session to ask further questions using
Mentimeter.

This exercise will constitute your second formative assessment.

Students are advised to follow the IRAC method for each section of the problem
question. This question is taken from the 2021-2022 Spring Summative Assessment.

PROBLEM QUESTION

a.

A. Issue = service charge

Can Sweden impose a 5 euro charge for the regular checks for bacteria?

Articles 28 and 30 prohibit charges on products which cross a border

Commission v Germany (Live Animals)

However, this charge can be valid if it constitutes payment for a service rendered o
the economic operator/a charge for inspections carried or to fulfil obligations under
union law/relates to a system of internal dues applied systematically and in
accordance with the same criteria to domestic products and imported products alike

Commission v Netherlands  if its to meet international law + charge is

proportionate

It is nott stated whether these inspections are to fulfil obligations imposed by union
law  Commission v Germany (Live Animals) inspection to meet directive

If it was internal than art 110 would apply but because it is on entry it is likely that
art 30 would apply

- If art 110 would apply then art 36 could apply for public health, Commission
v UK

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To be aaccepted national cheese must aalso be inspected for the strain  Lutticke v
HZA Saarlouis

Not enough info given to conclude whether it is in breach.

If it is for union law it is allowed, if not the it must apply to national goods too,
otherwise it would be in breach of art 30.

B. Imported cheese at premium cheese tax rate

Can all imported cheese be luxury?

Need to distinguish if it is because It is crossing a border?

- Border crossed = art 30

- No because of border = art 110

He fact all imported cheese is in the bracket indicates it could be art 30, and
therefore is prohibvited

However, it could be internal taxation under art 110  (1) , they’re similar products

John Walker  need to look at objecive characteristics of the product, method of

manufacture, consumer perception

Looks like it would be 110(1) but need to know more

Burden = tax must be equalised

c. Can they justify well being?

This is non-tariff barrier as it is not a tax but a quaantitive restriction

So question of art 34 applies

Déserbais  can’t rely on mandatory requirements, reasonable trade rules

Facts are similar so likely that Deserbais applies

Cassis de Dijon also applies  mutual recognition, where it applies in one state it
should be allowed in the other

Gheddo  quantitive

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d. MEQR

Time problem?

Tankstation
Static/dynamic selling arrangement
= static, shops can sell is a static
Generally remains out of art 34
Rebuttable presumption

Can art 36 apply?  health

Advertisments?

= dynamic, under 34, Gourment inernational, Cases C-34-36/95 De Agostini [1997]

ECR I-3843

Cassis = mandatory requirements OR art 36

Art 36  Public health

Allowed

E Protests

9. C-112/00 Schmidberger [2003] ECR I-5659:

Commission v France  French destroying spanish strawberries

- Only has vertical direct effect

Introduction

Commission v Italy (Italian Art)  is it a good, merchandise, valued in money

and can form commercial transacions

- Cheese = good

Vertical direct effect is effective, Van Gend En Loos, for EU law to apply to Oscar

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 - Only if articles have direct effect that we can rely on them

Issue  whether a statae action/inaction constitute fiscal/non fiscal barriers to trade

which breach art 30/34/110 which can be challenged by Oscar.

If there is a breach can there be a justification?

Sweden

- Art 30, crosses a frontier

- CHEE  charge having an equivalent effect (Commission v Italy (statistical
levy)), some charges may be lawful (service rendered to the provider; a
charge for inspecions carried out to fulfil obligations imposed by Union (or
international) law; related to a system of internal dues)
- Uncertainty whether its required under EU/International law
o Bahuis v Netherlands 1976  states the criteria

Justifiable

- Commission v Germany (Live Animals)  it is not stated whether these

inspections are to fulfil obligations imposed by union law
- No treaty justification, exceptions are always treated narrowly

Greece

- Art 110, internal charge

o Luttick v HZA Saarlouis
- Are products similar or in competition?
o (1) John Walker & Rewe look at characteristics  unclear whether
they are similar, consumer perception is a category, may be similar
but can’t say for certain
o (2) Beer & Wine  definitely in competition because they are all
cheeses

Is it direct or indirect?

= uncertain, don’t know the measure

- If all imported cheese = direct  can never be justified

o Burden must be equalized
- If just in practice it applies to imported cheese = indirect

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 o Humblot v Directeur des Services Fiscaux  can justify
o Commission v Greece
o remove the protective effect, bu may not entail equalisation of the tax
burdens on the goods

Denmark

Art 34  MEQR, Dassonville

Indistinctly or distincttly ?

= indistinctly, indirect discrimination

Cassis  mutual recognition

Assumed breach  art 36, public health, wants to increase wellbeing of the
populating through reducing fat consomption

- is it proportionate  could put labelling instead

- there’s an alternative that wouldn’t be as restricive therefore it is ot
proportionate

Poland

Time problem?

MEQR apply Keck  selling arrangement presumed outside unless presummption

can be rebutted

Tankstation
Static/dynamic selling arrangement
= static, shops can sell is a static  remains outside the scope of art 34

Generally remains out of art 34

Rebuttable presumption

= No breach

Advertisments?

= dynamic, under 34

Keck = if applies to everyone then not discrimination

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Gourment inernational  look at on a case-by-case basis

Cases C-34-36/95 De Agostini [1997] ECR I-3843

Cassis = mandatory requirements

Art 36 – public health, not proportionate

Allowed

Finland

Dealing with a state inaction  failed to ensure free movementt and

that they wouldn’t be destroyed

Breach of art 34

No grounds under art 36 (exhaustive), maybe mandatory

requirements under freedom of speech/expression (wider)

- destroying goods and restricting trade so not proportional

Commission v France  destruction of goods

Schmidberger [2003] ECR I-5659  doesn’t say if it is preauthorised by

state

Likely breach

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SELF-ASSESSMENT

90-100 80-89 70-79 60-69 50-59 40-49 30-39 20-29 10-19 0-9
Overall Mark

Having re-read
your answer,
what mark
would you give
your essay?
Why?

List 3 things 1.
that you could
do differently
either in
preparation or 2.
in the
assessment
itself to
improve your 3.
performance.

The EU Teaching Team

February 2024

17
Reading

Chapter 19

Articles 28-30: Duties and Charges

Duties and charges: Effect not purpose

 Court made it clear that the application of art 30 TFEU depends on the effect
of he duty or charge, not its purpose
 Commission v Italy [1968]  when art 30 catches a tax as a duty or charge,
then it is per se unlawful; any attempt to defend through art 36 were
rejected by the Court
 ECJ emphasized on effect rather than purpose in Diamantarbeiders  Court
considreed the legality of a Belgian law on diamonds; it was sufficient that
tthe charge was imposed on goods because they crossed a border

Charge having an equivalent effect: general principles

 Art 30 FEU prohibits charges having an equivalent effect

 It is stricto sensu
 Commission v Italy [1969]  no charges, they are prohibited
 Test repealed in Diamantarbeiders  made it clear that charges are bad

Charges having an equivalent effect: inspections and the ‘ex-change exception’

 Common defence = imported goods charge is merely payment for a service
the state has rendered to the importer, therefore it is not a CEE
 Commission v Italy  argued that it was not a CEE, Court unconvinced and
held that the statisical information was beneficil to the whole economy and
to the administrative authorities
 Bresciani  when the charge relates to acion taken by the stae with respect
of specific imported goods, the Court has been relucant to accept that it can
be characterised as consideration for a service rendered
o Court rejected first Italian argument  the fact that the charge was
proportionate to the quantity of imported goods made no difference
since art 30 TFEU prohibits any charge imposed on goods crossing a
border
o Second argument [10] the argument had plausibility  if you wish to
iimport a product tha requires health inspection, then you, the
importer should bear the cost  court’s response is unequivocal, the
pubic should bear the cst of inspections to maintain public health

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Charges having an equivalent effect: inspections and fulfilment of mandatory legal
requirements
 Where EU legislation permits the state to undertake an inspection, the
national authorities cannot recover any fees charged from the traders
 The Court has accepted that a charge imposed by a state will escape art 28-
30 TFEU when it is levied to cover the cost of a mandatory inspection
required by EU law
 Commission v Germany [1988]

Recovery of unlawful charges

 General principle is that MS must repay charges that have been unlawfully
levied
 The procedural conditions for such repayment may be less favourable than
those applying in actions between private individuals
 Exceptioni = the trader has passed on the loss to customers, since
reimibursement could lead to the trader being unjustly enriched
o May be qualified where the trader can show that it has suffered loss
o Burden of proof cannot be placed on the taxpayer

The customs union: the broader perspective

 There is significant importance on removing charges
 Only having one customs barrier for goods to enter the EU has implications
for the battle against organised crime and terrorism  these objectives
reflected in the modernised customs code of 2016

Articles 110-113: Discriminatory Tax Provision

Purpose of art 110
 Prevent the objectives of art 28-30 being undermined by discriminatory
internal taxation
 Treaty outlaws measures for when a product crosses a frontier

Art 110(1): Direct discrimination

 Does not stipulate that a MS must adopt any particular regime of internal
taxation
 Requires only that whatever system is chosen should be applied without
discrimination to similar imported products
 Commission v Italy  Italian Government charged lower taxes on
regenerated oil than ordinary oil for ecological reasons; argued that imported
oil could not be definied as regenerated so had a higher tax
 Court rejected this argument  held that it was for the importers to show
that their oil came within the category
 Hansen  ECJ insisted that a German rule making tax relief available to
spirits made from fruit must be equally applicable to spirits in the same
category coming from elsewhere in the EU

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  Commission v Ireland  if the procedure is applied unequally baased on MS
it is discriminatory

Art 110(1): Indirect Discrimination

 Tax that place a great er burden on commodities from another MS
 ECJ emphasised that a taxsystem will be compatible with art 110 only if it
exclude ‘any possibility’ of imported products being taxed more heavily than
similar domestic goods
 Humblot v Directeur des Services Fiscaux  French law imposed car tax based
on power rating, shows need to catch indirect discrimination
o French authoirities revised the rules but it was still in breach and
condemned in Feldain

Article 110: National autonomy and fiscal choices

 The MS can argue that there was some objective policy reason, which is
acceptable to the, to justify its action
 The Chemial case shows this approach  Court predicates its acceptance of
the Italian policy on the absence of discrimination, whether direct or indirect
 Shows willingness to accept objective justifications where the national policy
is acceptable from the EU’s perspective, even if this benefits dmoestic traders
 Commission v France  alleged that a French rule that taxed sweet wines
produced in a traditional manner at a lower rate than liqueur wines was
contrary to Art 110 TFEU, Court disagreed
o Found no direct discrimination
o Court willing to accept that incentive for production was an objective
justification
 Outokumpu Oy  ECJ held it was legitimaate for a MS to tax hte same or
similar product differentially, if this was done on the basis of objective criteria
 Can have differential tax rates on cars  Commission v Greece there was a
national fiscal measure that imposed a progressively higher tax based on the
cylinger capacity of the car; ECJ held this would only breach art 110 if it
discourage customers from buying highly taxed and impoted cars and
encourage them to buy domestic cars instead
o EU law did not prohibit the use of tax policy to attain social ends, if
the tax was based on an objective criterion, was no discriminatory,
and did not have a protective effect

The relationship between art 110(1) and (2)

 Art 110(1) TFEU prohibits the imposition of internal taxes on products from
other MS in excess of those levied on similar domestic products
 Art 110(2) catches national tax provisions that apply unequal tax ratings to
goods that may not be strictly similar, but which may nonetheless be in
competition with each other
 Commission v France [1980]  higher tax rate for spirits based on grain

Article 110(1) and (2): the determination of similarity

 First step is to determine whether the products are similar

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  If yes art 110(1) applies, if no then art 110(2) may apply
 Early ECJ judgment held that products would be regarded as similar if they
came within the same tax classification
 In some cases ECJ condemned the tax without too detailed an analysis of
whether this was under art 110(1) or (2)  this aproach is evident in the
early ‘spirits cases’ where tthe commission alleged that national tax rules on
spirits infringed art 110 (Commission v France [1980])
o Court not overly concerned with whether it was art 110(1) or (2), if
the nature of the products rendered the classiciation difficult
o This approach = problematic  consequence of ‘globalising’ art
110(1) and (2) obsurces the appropriate response of the infringing
state
o Art 110(1) breach = MS has to equlaise the taxes on domesic and
imported goods
o Art 110(2) breach = remove hte protective effect, bu may not enail
equalisation of the tax burdens on the goods
 John Walker case, courts were more careful to make a distinction  issue
whether liqueur fruit wine was similar to whisky for purpose of art 110(1)
o Court deemed they are not the same so art 110(2) applies
 Same approach taken in Commission v Italy  consumption tax on fruit was
discriminatory, decided whether banas and other fruit were similar for art
110(1)
o Found they were not, taking account of the objective characteristics
of the products
o Applied art 110(2)

Art 110(2): the Determination of protective effect

 Commission v UK [1983]  discriminatroy taxaiot of wine with respect to
beer, more difficult than the other ‘spirits’ cases since there was a greater
difference
 First stage = ECJ established htat there is some competitive relationship
between the two products so art 110(2) is applicable [8-12]
 ECJ accepted that meaningful comparison was between beer and cheaper
wine
 Prudct substitutability is central, but consumer preferences are not
immutable
 Second stage: Courtt considered whether the tax system was protective of
beer  applied varying criteria to decide whether there was a protective
effect
 Difficult to deny that the UK tax was discriminatory, however if less clear then
it will take a very significan tax differenial to have any protective impact
 Minimum harmonisation does not preclude the application of art 110 
Socridis, community legislation required only that MS imposed a minimum
duty on beer, did not preclude art 110 to determine whether a state was
being protectionist

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  With macimum harmondation, national measures must be judged in light of
harmonising directive, if the meaning of the directive is consistent with art
110

Taxation: the broader legal perspective

 Taxation can be direct or indirect  direct through income tax, and indirect
for sales
 EU does not exercise control over direc taxation (national sovereignty)
 EU prevents cross-border discrimination and has greater impact through art
113 TFEU
 VAT first ax to be harmonised in 1977: ‘indirect taxes may create an
immediate obstacle to the free movement of goods and the free supply of
services within an Internal Market’

Arts 28-30 and 110-113: The Boundary

 General principle = the two sets of articles are mutually exclusive
 Both concern the imposition of fiscal charges by the state
 Art 28-30 apply to duties or charges levied as a result of crossing a borer
 Art 110-3 catch fiscal policy that is internal to the state, protects
discrimination once they’ve entered the state
 Important to determine which article it falls under

Levies imposed on importers

 Art 30 would normally apply since levy = CEE
 It would be unlawful unless the state could show the levy was consideration
for a service/it was imposed pursuant to mandatory requirements of EU law
 Argument that it should be under art 110 bc domestic producers have to pay
is unsuccessful, Bresciani
 Exceptional circumstances court may decide that although levy has been
taken due to crossing a border, it is not a CEE but a tax under art 110
o Denkavit  needed authorisation from the ministry of agriculture,
and charged an annual levy to meet he costs of checking samples of
the goods; court held that authorisaion fell within art 34 but could be
justified under art 36
o Levy was imposed on all those engaged in the feeding-stuff trade,
whether importers or domestic producers  ECJ held tha it related to
aa general system of internal dues applied systematically and in
accordance with the same criteria to domestic products and imported
products alike so came within art 110
 Michailidis  charge levied at the border will be regarded as an internal tax,
not a CEE, only where the comparable charge levied on national products is
applied a the same rate, at the same marketing staage and on the basis of an
identical chargeable event

Imports taxed but not made by the state of import

 When the importing state does not make the imported product, but imposes
a tax on it

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  Co-Frutta  tax on bananas and other fruit
o If any charge imposed by a state on a product that it did not make or
only in negligible quantities, were to be a CEE under art 30 then it
would be automatically unlawful
o Consequence = importing state could not tax goods it did not produce
itself
o Found to breach art 110(2) for same reason as Commission v Italy

Selective tax refund

 When state chooses to make a selective refund of tax/uses money to benefit
a particular group
 If benefits a particular industry it could be state aid under arts 107-9 TFEU
 Art 30/110 issues arise when the money refunded caan be linked to what hs
been levied pursuant to a specific tax
 Dependant on whether the refund or other benefit to the national producers
wholly or partially offsets the tax
o If wholly = art 30: it is in effect a charge levied only on the
imported/exported product
o Partially = art 110: the partial refund in effect means that there could
be a discriminatory tax
 Three conditions for consideration under 30 over 110:
o Charge must be destined exclusively for financing activites which very
largely benefit the taxed domestic produc
o There mus exist identity between the taxed product and the domestic
product benefiting from the charge
o The charges imposed on the domestic product must be completely
compensated
 This approach exemplified by Scharbatke -. Challenge to mandatory
contributions levied in Germany when slaughtered animals were inspected
o Contribution was applied under the same conditions to national and
imported product, the money was assigned to a marketing fund for
agricultural, foresy, and food products
o ECJ held that the mandatory contribution constituted a parafiscal
charge
o Resulting revenue benefited solely national products, so the
advantage accruing wholly offset the charge imposed on the products
so = art 30

Chapter 20
Foundations: Directive 70/50 and Dassonville
 Art 34 catches quantitative restrictions and all measures that have an
equivalent effect, MEQR
 Notion of MEQR was broadly defined in Geddo to mean ‘measures which
amount to a total or partial restraint of, according to the circumstances,
imports, exports or goods in transit’

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  Commission’s view is in Directive 70/50, this directive was only applicable
during the Community’s transitional period
 List of matters which = MEQR are specified in art 2 and include: minimum or
maximum prices for imported products; less favourable prices; lowering
value; regarding its intrinsic value/increasing cost; payment conditions which
differ from domestic products; conditions for packaging; giving preference;
limiting publicity; prescribing stocking requirements; making it mandatory for
importers to have an agent in the territory of the importing state
 Dassonville = crucial element in proving an MEQR is its effect, discriminatory
intent is not required
 ECJ takes a broad view of measures that hinder he free flow of goods,
discrimination between domestic and imported goods is no necessary
 Cassis de Dijon confirmed that art 34 could apply to rules that were not
discriminatory

Discrimination: barriers to trade

Import and export restrictions
 ECJ harsh on discriminatory import/export restrictions
 Art 34 catches import or export licences and provisions subject to imported
goods and not domesic producs
 Commission v Italy  ECJ held that procedures and data requirements for
the regisration of imported cars, making their registration longer, more
complex and more expensive than domestic vehicules were prohibited by art
34

Promotion or favouring domestic products

 Prohibits action by state that promotes or favours domestic products to the
detriment of competing imports
 Most obvious = stae engages in a campaign to promote the purchase of
domestic good  Commission v Ireland [1982]
o ECJ looks to substance, not form, even though campaign failed, it’s
still under art 34
 State has rules on he origin making of certain goods  Commission v UK
[1985]
o Legislation that contains rules on origin-marking will normally be
acceptable only if thte origin implies a certain qualiy in the goods, that
they were made from certain materials or by a particular form of
manufacturing or where the origin is indicative of a special place in
the folklore or tradition of the region in question
 Public procurement cannot be structured to favour domestic producers 
Commission v Ireland [1988]
 Discrimination in favour of domestic goods is evident in administrtative
practice  Commission v France, French law discriminated agiainst imported
postal franking machines, adminstrative discrimination could be caugh by ar
34

Price fixing

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  State cannot treat imported goods less favourably in law or fact than
domestic products htrough price-fixing regulations
 LIBRO Handelsgesellschaft [2009]  Austrian law provided that an importer
of books could not fix a price below the rettail price fixed or recommended by
the publisher for hte state of publication

National measures v private action

 General principle is that art 34 applies to state measures, not private parties
 Art 101 and 102 apply to private action that restricts competition
 Three qualifications to his principle:
o Issue to what consistues a state entity  ‘Buy Irish’ case, ECJ rejected
the argument that the Irish Goods Council was a private body and
ttherefore immune from art 34
 Apple and Pear Development Council case  existence of a
statutory obligaation on fruit growers tto pay certtain levies to
thte Council sufficed to render the body public for these
purposes
 Instituttions concerned with trade regulation may come within
the definition of state even if they are nominally private
o Fra.bo  art 34 is applicable to standardisation and certification
activities of a private law body, where the national legislation
considers he products certified by that body
o Applies against the state even thouggh private parties have taken the
main role in restricting the free movement of goods  Commission v
France

Indistinctly applicable rules: Cassis de Dijon

Foundations
 Directive 70/50.30, covered discriminatory and indistinctly applicable
measures  highlights importance in addressing barriers to single market
integration
 Evolved from Dassonville to Cassis de Dijon,
 Cassis de Dijon  affirmed [5] Dassonville (about not being discriminatory)
and created mutual recognition [14]
o Built on Dassonville [6]  in the absence of harmonisation,
reasonable measures could be taken by a stae o preven unfair trade
practices

Application: post Cassis jurisprudence

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  Déserbais  importer of Edam cheese from Germany to France was
procesuted for unlaawful use of a traade name; Germany produced cheese
with fat content of only 34.3%, in France resttriced to 40%
o Importer relied on art 34 by way of defence
o ECJ held in accord with Cassis and French rule was incompatible nd
could not be saved by the mandatory requirements
 Gilli and Andres  importers of apple vinegar from Germany to Italy,
prosecuted for fraude because thtey had slold vinegar thata was not made
from fermentation of wine
o In breach
 Rau  concerned national rules on packaging
o Belgian law required all margarine to be markeed in cube shaped
packgaes  difficult for non Belgian manufacurers to comply without
incurring cos increases
o ECJ held art 34 was applicbale and that the Beligian rule could not be
justified by consumer protection, clear labelling would suffice

Indistinctly applicable rules: the limits of art 34

 Cassis signalled the ECJ’s willingness to extend art 34 to catch indistinctly
applicable rules
 All trade rules affect the free movement of goods
 Weatherill and Beaumont note a distinction can be made between termed
dual burden rules and equal burden rules
o Cassis concerned dual burden
 Equal burden  should fall under art 34 subject to justification/controverseil
o Keck shows the controversy  does not relae to the characeristics of
the goods
 Oebel  rule prohibited the delivery of baked producs to consumer and
retailers, but not wholesalers, not caught as it applied the same way o all
producers wherever they were established
 Cinethèque  ECJ held that French law banning the sale or hire of videos of
films during the first year in which the film waas released to get people to go
to the cinema was breaching art 34
o Same approach in Sunday Trading cases
 Tofaen = identical to Cinetheque bu could escape prohibitions if there was
some objective justification and effecs were proportionate

Indistinctly and distinctly applicable rules: Keck and selling arrangements

Selling arrangements
 Decision based on distinction between dual-burden rules and equal burden
rules
 ECJ desire to exclude selling arrangements from art 34 is seen in Tankstation

26
Static and dynamic selling arrangements
 Ambiguity surrounding ‘selling arrangements’  could be static or dynamic
 Keck shows that some selling arrangements are outside of art 34 scope
 Hunermund and Leclerc-Siplec  limited ban on adverising was characterised
aas a method of sales promotion outisde of art 34

Two qualifications
 Rules concerning sales characterised as relating to the product 
Familiapress ECJ characterises rules that affect selling as par of the product
itself
 Differential impact in law or fact  Keck is subject to second qualification:
national regulation is categorsed as being selling, it will be caught art 34

Indistinctly and distinctly applicable rules: product use

 Distinction between selling arrangments and product characteristics
generated further quesitonns as to how cases concerned with the ‘use’ of
products should be regards
 Commission v Italy [2009]  held that Italian rule fell within art 34, but
concluded that it could be justified on public safety
 Percy Micklesson [2009] the national rule could be justified for the
proctection of the environment

Current law

Defences: Art 36

Public morality  Henn and Darby & Conegate

Public policy  Centre Leclerc

Public security  Compus Oil Ltd v Minister for Industry and Energy

Protection of health and life of humans, animals, or plants

 Health protection as real purpose or disguised trade restriction 
Commission v UK
 Determination of Public Health claims  Sandoz
 Health checks and double checks  Denkavit

Further grounds for validating

Defences to indistinctly applicable rules: mandatory requirements

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The rationale for the mandatory requirements
 The ‘list’ of mandatory requirements in Cassis si sometimes referred to as the
rule of reason, drawing upon Dassonville to the effect that in the absence of
EU measures, reasonable trade rules would be accepted in certain
circumstances

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