FOUR FREEDOMS OF THE SINGLE

MARKET
Intro
Art. 26 - TFEU

[...]

2. The internal market shall comprise an area without

internal frontiers in which the free movement of goods,
persons, services and capital is ensured in accordance
with the provisions of the Treaties.

[...]
Free movement of Goods
 Definition of EU Goods
• CJEU, case 7/68, Commissionv Italy: „by goods, within the meaning of th e
(…) Treaty, there must be understood products which can be valued in
money and which are capable, as such, of forming the subject of comme
rcial transactions“.
• EU goods according to Art. 28 (2) Treaty on the Fuctioning of the European
Union (TFEU) are “products originating in Member States and
… products coming from third countries which are in free circulation in
M ember States.”
 Definition of EU Goods
• Article 5 (23) of the Union Customs Code
(23) "Union goods" means goods which fall into any of the followi
ng categories:
– (a) goods wholly obtained in the customs territory of the Union and no t
incorporating goods imported from countries or territories outside t he
customs territory of the Union;
– (b) goods brought into the customs territory of the Union from countri
es or territories outside that territory and released for free circulatio n;
– (c) goods obtained or produced in the customs territory of the Union,
either solely from goods referred to in point (b) or from goods referre d
to in points (a) and (b);
 CE Marking

• “CE Marking is a European standard that states that the organization product
and its packaging are as per the set European legislation” which is sold within
European Economic Area.
• CE mark on product indicates that a product has meets the EU health, safety,
and environmental requirements, which also ensures consumer safety
 CE MARKING Its a trade passport for the European marketplace.
I t allows the manufacturer to freely circulate their
pr
oduct throughout the 30 countries of the
European The products which needs CE marking include are
Economic Area.
Toy safety
Promotes public health and safety Medical
devices
Enhances product credibility Machinery
Leads to improved sales and greater customer satis
Electrical equipments, faction
Radio and Telecom terminal equipment Ensures product compliance with the essential requ
Electronic Equipments Pressure irements of the relevant European health, safety
Equipments, and environmental protection legislation
Gas appliances Permits the withdrawal of the non conforming prod
ucts by enforcement authorities
Personal protective equipments etc
Reduce liability claims, timescale and costs.
 Restrictions prohibited by the treaty
TFEU prohibits restrictions between MS

1. Tariff barriers to trade– are restrictions involving direct payments of money. They compr
ise customs duties and charges having equivalent effect to customs duties (CEEs). 🡪 Art.
30 TFEU/ cannot be justified
• fiscal measure; money duties on market access

2. Discriminatory Internal Taxation Art. 110 TFEU/ objective justification in relation to indir
ect discrimination
• fiscal; taxation of goods which have entered the market of a MS

3. Non-tariff barriers to trade

• Art. 34 TFEU/
• non-fiscal; regulation of goods in regard to both market access and national market re
gulation
 Commission v.Italy(C-7/68)
• Italy imposed tax on the export of artistic, historical and archaeological items.

• Commission brought an action alleging that this was in breach of Article 30 TFEU, prohi
biting duties and charges on exports.

• Italy argued that the items should not be regarded as goods for the purpose of the rules
on the customs union and that the purpose of the tax in question was not to raise reven
ue, but to protect the artistic, etc., heritage of the country.

• The Court rejected the arguments:

• 3.ANYCHARGEWHICH,BYALTERINGTHEPRICEOFANARTICLEEXPORTED,HASTHE
SAMERESTRICTIVEEFFECTONTHEFREECIRCULATIONOFTHATARTICLEASACUSTO
MSDUTYISDEEMEDTOBEACHARGEHAVINGANEFFECTEQUIVALENTTOACUSTOMS
DUTYWITHINTHEMEANINGOFARTICLE16(now 30 TFEU) OFTHEEECTREATY.
 Discriminatory taxation
• Arts. 28-30 TFEU are applicable where a duty is imposed on a product as a result of its cros
sing the state border.
• Arts. 110-113 TFEU are applicable where a discriminatory fee is imposed inside the another
MS's territory, not in connection with the crossing.
• Arts. 28-30 TFEU are generally prohibitive.
Arts. 110-113 TFEU are generally permissive.
•

• Direct discrimination – where imports and domestic products are deliberately treated differ
ently and is thus automatically unlawful. Cannot be justified.
• Indirect discrimination – where the legislation in question seems neutral, but nonetheless pl
aces greater burden on commodities coming from another MS. May objectively be justified
Prohibition of any form hidden protectionism for the goods market (Art. 110 (2) TFEU):
•
– Unequal tax level is prohibited even when the goods are not strictly similar, but are in co
mpetition anyway.
 Prohibition of quantitative restrictions
Art. 34 TFEU:
• Quantitativerestrictionsonimportsandallmeasureshavingequivalenteffects
hallbeprohibitedbetweenMemberStates.
• Quantitative restrictions – measures which amount to a total or partial restraint of
imports, exports or goods in transit (Geddo,2/73), e.g. open or hidden quota
systems based on statutory provisions or as administrative practice.
• All non-tariff (non-pecuniary) limitations of the quantity of goods coming into o
r leaving a state.
• application of Article 34 TFEU is limited by the Keck jurisprudence, which states
that certain selling arrangements fall outside the scope of that article, provided
that they are non-discriminatory (i.e. they apply to all relevant traders operatin
g within the national territory, and affect in the same manner, in law and in fac t,
the marketing of domestic products and products from other Member States)
(Joined Cases C-267/91 and C-268/91 of 24 November 1993).
Prohibition of measures having effect
equivalent to quantitative restrictions
Art. 35 TFEU:
• Quantitative restrictions on exports, and all measures
having equivalent effect, shall be prohibited between
Member States.
• Definition by CJEU, case 8/74, Dassonville: “Alltradingrul
esenactedbyMSwhich are capable of hindering, directly or
indirectly, actually or potentially, intra-Community trade
are to be considered as measures having an effect equivalent
to quantitative restrictions” (Dassonville formula).
 Types of restricting measures: distinctly
applicable
• A-k-a discriminatory measures => imported goods are treated less
favourably than the domestic ones = they have different burden in law
and in fact
• Imposition of additional requirements on imported goods (different
requirements to the alcohol content in vermouth for domestic and
imported products - Weinvertrieb, 59/82)
• Limitation of channels of distribution (different requirements to products
imported directly and parallely imported, Dassonville,8/74)
• National rules giving preference to domestic products (cases BuyIrish,
Irish Souvenirs):
• Exception:where the attention is only drawn to specific qualities of
products manufactured domestically and the campaign intents to
promote those qualities
 justification of restrictions
Art. 36 TFEU:
• The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports
or goods in transit justified on grounds of public morality, public policy or public security; the
protection of health and life of humans, animals or plants; the protection of national treasures
possessing artistic, historic or archaeological value; or the protection of industrial and
commercial property. Such prohibitions or restrictions shall not, however, constitute a means of
arbitrary discrimination or a disguised restriction on trade between Member States.
• Measures of Art. 36 TFEU – defences to all kinds of restrictions.
• Additional defences to indistinctly applicable restrictions were developed in Cassiscase and are
called mandatory/ imperative requirements:
– They include protection of consumers and fairness of commercial transactions.
– The list is non-exhaustive and has been further developed by the CJEU (protection of environment, cultural polic y,
maintenance of media diversity, maintenance of financial balance of the national social security system, prote ction
of children, prevention of fraud etc).
The burden of proof of all justifying grounds lies on the MS.
• All defences shall be interpreted restrictively.
 CassisdeDijon,case 120/78
ECR [1979] 649
• An important EU Court case providing for mutual
recognition of standards in different EU countries.
• EC Court verdict from 1979 stating that, as a rule, product s
in one EU country are also legal in other EU countries.
• The verdict forced the member states to agree on common
standards which they would otherwise not have agreed.
• Cassis is a French liqueur with an alcohol level of 16%.
Germany would not allow it to be sold as “liqueur” under
German law, which states that the minimum percentage of
alcohol should be 25%.
 Cassis de Dijon,case 120/78
Implications:
• Application of Art. 34 TFEU to non-discriminatory/indistinctly
applicable measures.
• Introduction of the principle of mutual recognition: once
the goods at issue were lawfully marketed in one MS, they
should be admitted in any other MS without restriction.
• Introduction of rule of reason: in the absence of EU
harmonisation, reasonable measures could be taken by the
MS to prevent unfair trade practices.
• Introduction of additional justification grounds for
restrictions
Free movement of Persons
 Who can benefit from this freedom?
●Job-seekers, i.e. EU nationals who move to another EU country to
Free movement look for a job, under certain conditions
of persons ●EU nationals working in another EU country
●EU nationals who return to their country of origin after having
worked abroad.
●Family members of the above.
 ● look for a job in another EU country
● work there without needing a work permit
● reside there for that purpose
● stay there even after employment has finished
What does it ● enjoy equal treatment with nationals in access to employment,
entitle? working conditions and all other social and tax advantages
● Enter another EU country, as may their family members -
whether EU citizens or not - without requiring an exit or entry
visa.
● Live in another EU country for up to 3 months without any
conditions or formalities.
 Treaty Basis
● Article 45(1) TFEU Free movement of workers
● Article 49 TFEU – freedom of establishment (self-
employed persons)
Legal Basis ● Article 56 TFEU – freedom to provide and receive
services
● Articles 20-21 – Union Citizenship
● Article 18 – general principle of non-discrimination

Secondary Law
● Regulation (EU) No 492/2011 on the right of EU workers to move within
the EU
 ● Prohibition of discrimination of migrants - equal treatment with
own nationals.
● Prohibition of both:
➢ Direct discrimination: where different treatment of workers is
dependent on their nationality,
Prohibition of
Indirect discrimination: where, though applicable irrespective of
Discrimination ➢

nationality, their exclusive or principal aim or effect is to keep

nationals of other MS away from the employment offered
 The right to work
● Family members:
● Do not need a work permit to work, even if they are non-EU
nationals.
● Have the right to equal treatment, including access to all social
and tax advantages.
Rights of worker's
The right to education
family members
● Children of EU nationals working abroad in another EU country:
● Have the right to education in the host country, whatever their
nationality, on the same terms as nationals of that country
● Must also be given the same access to study grants.

22
Schengen
 ● Key milestone in establishing an internal market with free movement of
persons was the conclusion of the two Schengen agreements (1985 and
1995)
● The free movement of persons is a fundamental right guaranteed by
the EU to its citizens.
● Entitles every EU citizen to travel, work and live in any EU country
Schengen without special formalities.
● Schengen cooperation enhances this freedom by enabling citizens to
cross internal borders without being subjected to border checks.
● The border-free Schengen Area guarantees free movement to more
than 400 million EU citizens, as well as to many non-EU nationals,
businessmen, tourists or other persons legally present on the EU
territory.
 ● Now that the EU has been facing the migration crisis: (Under the
Schengen rules, countries can temporarily reintroduce borders in cases
of threat to public policy or internal security)
Schengen ● Can be done in the event that a serious threat to public policy or internal
security
● must remain an exception and must respect the principle of
proportionality
 FREEDOM OF
ESTABLISHMENT
 FREEDOM TO PROVIDE SERVICES

LEGAL BASIS Articles 26 (internal market), 49 to 55 (establishment) and 56

to 62 (services) of the Treaty on the Functioning of the European Union
(TFEU)
FREEDOM TO PROVIDE SERVICES

Self-employed persons and professionals or legal persons within the meaning of

Article 54 TFEU who are legally operating in one Member State may:

• (i) carry on an economic activity in a stable and continuous way in another Member State
(freedom of establishment: Article 49 TFEU);
• (ii) offer and provide their services in other Member States on a temporary basis while
remaining in their country of origin (freedom to provide services: Article 56 TFEU).
FREEDOM OF ESTABLISHMENT
• Right of establishment (1): Art. 49-55 TFEU
• Article 49 TFEU:
• Within the framework of the provisions set out below, restrictions on the freedom of
establishment of nationals of a Member State in the territory of another Member State shall
be prohibited. Such prohibition shall also apply to restrictions on the setting-up of
agencies, branches or subsidiaries by nationals of any Member State established in the
territory of any Member State.
• Freedom of establishment shall include the right to take up and pursue activities as self-
employed persons and to set up and manage undertakings, in particular companies or firms
within the meaning of the second paragraph of Article 54, under the conditions laid down for
its own nationals by the law of the country where such establishment is effected, subject to
the provisions of the Chapter relating to capital.
RECOGNITION OF PROFESSIONAL
QUALIFICATIONS
Article 53 TFEU
In order to make it easier for persons to take up and pursue activities as self-employed
persons, the European Parliament and the Council shall, acting in accordance with the ordinary
legislative procedure, issue directives for the mutual recognition of diplomas, certificates and
other evidence of formal qualifications and for the coordination of the provisions laid down by
law, regulation or administrative action in Member States concerning the taking-up and pursuit
of activities as self-employed persons.
ESTABLISHING A COMPANY IN A
MEMBER STATE
• A company must be formed in accordance with the law of a Member State
• Must have a registered Office in the Member State
• Must have principal place of business somewhere in the EU
– established in the first Member State within the meaning of the Treaty
• A company has right for secondary establishment only if it already has its principal place of
business or central registered Office within the EU
CJEU CASE LAW ON FOE (1): DAILY MAIL
C-81/87
- CJEU: Freedom of Establishment not applicable, given the current state of harmonisation:
○ Companies are constructs of MS legal orders.
○ MS govern their “life and death” completely.
○ The issue in question (both company and tax law) is not sufficiently harmonised; the discrepancies
should be addressed by the legislator.
FREE MOVEMENT OF
SERVICES
04.04
FREE MOVEMENT OF SERVICES

Freedom to provide services applies to all of

those services normally provided for
remuneration, insofar as they are not
governed by the provisions relating to the
freedom of movement of goods, capital and
Articles 56-62 TFEU persons. The person providing a ‘service’
may, in order to do so, temporarily pursue
her or his activity in the Member State where
the service is provided, under the same
conditions as are imposed by that Member
State on its own nationals.
WHAT IS A SERVICE? COMMERCIAL
CHARACTER OF THE ACTIVITY
• Normally provided for compensation: services provided for free or out of social duty and
without any desire for payment are not covered.
• Normally provided for compensation: occasional provision for free does not count.
• Does not matter by whom they are provided (non-profit organisation etc.)
• Morality of services (e.g. abortion) does not matter.
JUSTIFICATION OF RESTRICTIONS

• Activities connected with the exercise of official authority are excluded from freedom of
establishment and provision of services (Article 51 TFEU).
• This exclusion is limited by a restrictive interpretation:
– exclusions can cover only those specific activities and functions which imply the exercise of
authority;
– and a whole profession can be excluded only if its entire activity is dedicated to the exercise of
official authority, or if the part that is dedicated to the exercise of public authority is inseparable
from the rest.
JUSTIFICATION OF RESTRICTIONS

• Discriminatory measures => grounds of Art. 52 (in conjunction with Art. 62) TFEU: public
policy, public security and public health.
• Non-discriminatory measures => justifications grounds developed by the CJEU (similar to
Cassis):
– Pursue of a legitimate public interest (aka “imperative requirements of the general interest”) which
is compatible with Union aims (but not of purely economic nature and not discriminatory)
• Examples: consumer protection, protection of workers, regulation of profession or activity in public
interest.
– Restriction must be proportionate to the need to observe the legitimate aim
COLLABORATIVE ECONOMY

• The collaborative economy, sometimes called the sharing economy, covers a great variety of
sectors and is rapidly emerging across Europe
• Many people in the EU have already used, or are aware of collaborative economy services,
which range from sharing houses and car journeys, to domestic services
• The collaborative economy provides new opportunities for citizens and innovative
entrepreneurs
CASE C-434/15

• ECJ: Uber is a transport services company

• Lawyers for Barcelona’s Asociación Profesional Elite Taxi argued that Uber was directly
involved in carrying passengers. EU rules on the freedom to provide services expressly
exclude transport.
• In its ruling, the ECJ said an “intermediation service”, “the purpose of which is to connect, by
means of a smartphone application and for compensation, non-professional drivers using their
own vehicle with persons who wish to make urban journeys, must be regarded as being
inherently linked to a transport service and, accordingly, must be classified as ‘a service in the
field of transport’ within the meaning of EU law”.
Free movement of Capital
General overview
• all restrictions on the movement of capital and payments
between Member States and between Member States and
third countries shall be prohibited.
• also means elimination of unequal treatment on grounds of
nationality
• it became a directly applicable by the Maastricht Treaty
(1993). it is the only freedom going beyond the boundaries
of the Internal Market, as it also covers the movement of
capital between Member States and third countries.
Why do EU need liberalism in market?
• For Europe's citizens, the freedom means the ability to
conduct many operations abroad, (from opening bank
accounts to buying shares in non-domestic companies,
investing where the best return is, and buying real estate)
• For Europe's companies, it means being able to invest in
their own or other European companies and take an active
part in their management
• For Europe's governments, it means lower borrowing rates
than previously, making it easier to finance spending on
schools, hospitals and other forms of public spending.
 Definition
• According to CJEU, capital can be
divided into money capital and real
capital, distinguishing from freedom
of services

• According to nomenclature, Capital

movements mean any one of the
following when carried out on a cross-
border basis.
The free movement of capital and third
countries
• Art. 63 of TFEU
• “all restrictions on the movement of capital between Member
States and between Member States and third countries shall
be prohibited.”
• The EU promotes these principles through
• international forum and multilateral agreements
• bilateral investment dialogues and trade agreements
• negotiations with EU candidate countries
The free movement of capital and third
countries
Enforcement and Monitoring
European Commission

To enforce the free movement of

capital by :

monitoring capital flows

ensuring EU countries properly apply
rules of the Treaty.

Eliminating any barrier which is

incompatible with the Treaty.

The EFTA Surveillance Authority

INTERESTING
Free movement of capital – cash in airports
• although you are obliged to declare large amounts of cash (or
equivalent, such as travellers' cheques, promissory notes, monetary
orders) to customs.
EU law still allows individual EU countries to have national cash control
measures, provided they're not excessive, including obligatory
declaration.
One of the main reasons is the public interest, especially public
security – to combat money laundering and the financing of terrorism.
Remember also that when leaving or entering the EU, you must
declare all cash (or equivalent) worth €10 000 or more.
Transactions
• For transactions in euros, banks may not charge you more for
transactions to another eurozone country than they do for transactions
within your home country – see EU rules on cross-border
payments/transfers.
For transactions in other currencies, there is no EU law. So banks may
charge what they like.
Digital Single Market
Defining the Internal Market for
Electronic Communications
● One of the most prominent current projects
of the EU and the European legislator, in
particular the European Commission
("Commission").
● For European consumers, the DSM is
great news: "In a Digital Single Market,
there are fewer barriers, and more
opportunities: it is a seamless area where
people and business can trade, innovate
and interact legally, safely, securely, and at
an affordable cost, making their lives
easier."
 CONSUMER
● Digital Consumer is a natural person who
use technology to buy products and
services.
The phases of buying goods online

1.Digital platform
2.Shopping cart
3.Online agreement
4.Payment
procedure
 Online contracts
Browse-wrap is a contract or license
•

agreement covering access to or use of

materials on a web site or downloadable
product. (passive consent)
•Click-wrap agreement is an online contract
that confirms a user's consent to a company's
terms and conditions. (active consent)
 Consent under the GDPR - Article 4 (11)
‘consent’ of the data subject means any freely given, specific,
informed and unambiguous indication of the data subject's
wishes by which he or she, by a statement or by a clear
affirmative action, signifies agreement to the processing of
personal data relating to him or her;
 Online contracts
Browse-wrap is a contract or license
•

agreement covering access to or use of

materials on a web site or downloadable
product. (passive consent)
•Click-wrap agreement is an online contract
that confirms a user's consent to a company's
terms and conditions. (active consent)
 Payment
procedure
VIRTUAL CURRENCY:

- Emoney is an electronic component of currency systems, and still trades in

familiar units such as dollars, euros, pesos, or yen. E-money is typically
regulated and controlled within the framework of a government's central
banking system.
- Cryptocurrency (or crypto currency) is a digital asset designed to work as a
medium of exchange that uses strong cryptography to secure financial
transactions, control the creation of additional units, and verify the transfer of
assets.
 Whats NEXT?

New EU regulations put an end to

buying Bitcoin anonymously
The EU regulatory framework for electronic communications needs to
expressly require that national regulatory authorities analyse a relevant market
which consists of the supply of wholesale inputs to support the cross-border
business market.
Without a mechanism which requires them to actually do so properly, national
regulators who do not think this is a priority will either not do so or go through
the motions and put in place something ineffective.