INTERNAL MARKET

Lecture VI
Dr. Mamuka Andguladze, LL.M. Eur
 Internal Market

 Main Goal of the EU is the creation of the Internal

Market, 3 (1 - b) TFEU, 26 TFEU);

 Definition of the Internal Market:

“ 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”.

 The definition is a political goal and legal term as well;

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 In 90-th upon the request of the European Council the

Commission issued a white paper including measures to
achieve a common market;

 white paper- documents containing proposal;

 green paper – documents containing ideas and launched for a

public discussion;

 The Lisbon treaty ended the long existed dispute over the term
(internal market or common market). The case law recognised
both of them equal and similar (C-350/92, Spain/Council);
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Instruments/Mechanisms for the establishment of the
Internal Market:

 Harmonization of the Legislation (114 TFEU) – plays a key role to

remove any possible obstacles in order to set up an internal
market;
 Establishment of the Customs Unions which specifies a common
policy towards third countries and prohibition of all custom
duties among the Member States of EU:
28 (1) TFEU: The Union shall comprise a customs union which
shall cover all trade in goods and which shall involve the
prohibition between Member States of customs duties on imports
and exports and of all charges having equivalent effect, and the
adoption of a common customs tariff in their relations with third
countries.
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Two more important mechanisms:

 Origin Principle – The principles of those countries

should be applied to the goods, persons or services from
where they are; Origin principle ensures the free
movement within the EU if the qualitative and
quantitative requirements are fulfilled;

 Destination Principle – Different approach compared

to origin principle; rules of the destinate country
should be applied.
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Fundamental Freedoms and Non-Discrimination

 Playing crucial role for the establishment of the Internal Market;

 Providing equal rights and duties to the market players;

 Contributing to the removal of obstacles related to the cross

boarding of the product within the EU;

 Ensuring an equal application of the competition law to all trade

subjects;
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Prohibition of Discrimination
Article 18 TFEU: Within the scope of application of the Treaties, and without
prejudice to any special provisions contained therein, any discrimination on
grounds of nationality shall be prohibited. The European Parliament and the
Council, acting in accordance with the ordinary legislative procedure, may adopt
rules designed to prohibit such discrimination.
Article 19 1 TFEU: Without prejudice to the other provisions of the Treaties and within the
limits of the powers conferred by them upon the Union, the Council, acting
unanimously in accordance with a special legislative procedure and after obtaining the
consent of the European Parliament, may take appropriate action to combat
discrimination based on sex, racial or ethnic origin, religion or belief, disability, age
or sexual orientation.
 Based on article 19 was adopted several directives (2004/113/EC);
 Special antidiscrimination article 157 (1) TFEU: Each Member State shall ensure
that the principle of equal pay for male and female workers for equal work or work of
equal value is applied.
 In addition, the Member States should not discriminate their own citizens in
relation to the foreigners as well.
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Citizens of the EU (20-25 TFEU)

 A citizen of EU enjoys with the free movement within the EU without

any specific explanation;

 May conduct economic activity;

 May take part in the elections of the EU parliament and self-government;

 Diplomatic and Consul service;

 FOI request to the bodies of the EU;

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Fundamental Freedoms

 Original mission of the fundamental freedoms were the prohibition

of the discrimination;

 Later the ECJ developed the principle of the prohibition of the

restriction; In other words measures having non-discriminating
character but restricting the execution of the fundamental freedom
are prohibited;

 Differing to the non-discrimination principles the principle of the

non-restriction may applied to the citizens of the third countries;
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 Beneficiaries of the Fundamental Freedoms are

individuals and legal persons who taking part in
economic activities which crosse the national borders;

Main Adressats of the fundametalal Freedoms are:

 Member States of the EU;

 EU Institutions;
 Individuals carrying out the public duties;
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 ECJ created the conditions where the interference in the
fundamental freedoms could be justified: (Case: C-55/94
“Gebhard”):

1. Conducting measures should have non-discriminative character;

2. General necessity are required for these measures;
3. Conducting measures should be adequate and enough to achieve a
goal;

 Generally, the ECJ considers the possibility of the violation of the

only one fundamental freedoms even if the activity of the states
may violate more than one fundamental freedoms;
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Case Study

I. Application of the Fundamental Freedoms:

 No application if there is an appropriate Secondary Law;
 No application without competence (military or policy issues) 51 (1) TFEU;
II. Violated:
a. Personal Area
1. Fundamental Rights of the Citizens of EU and Third Countries (Free movement,
establishment etc);
2. On the territory of EU;
b. Fundamental Freedoms:
1. Free Movement of Goods (34 ff. TFEU): Substance, Value and Trade object
(including garbage, electricity, water etc.);
2. Free Movement of Workers (45 ff. TFEU): Working during a specific time and
getting a salary (including teachers and professors);
3. Right to establishment (49 ff. TFEU);
4. Free Movement of Services (56 ff. TFEU): Independent cross boarding service
with reimburse. Passive, active and correspondence;
5. Free movement of capital (63 ff. TFEU)
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4. State activity
•Main adressats are EU institutions and Member States;
• Inactivity may violate a Freedom;
• Private persons may be adressats as well (Case: C-415/93 “Bosman”);
5. Prohibition of Discrimination; Equal Treatment within a state:
• Direct discrimination (nationality);
• Indirect discrimination (language, residency etc.);
6. Dassonvile
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
measures having an effect equivalent to quantitative restriction

Keck
Only rules relating to product requirements (shape, size, color, etc.) should be
illegal, while those relating to selling arrangements (opening hours, staff training
requirements, etc.) will mostly not be.
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III. Justification
1. Restriction
•based on treaty– 36, 45 (3), 52 TFEU (on grounds of public morality, public policy
or public security; the protection of 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, public
security or public health);
•Casis: the effectiveness of fiscal supervision, the protection of public health, the
fairness of commercial transactions, and the defense of the consumer.
•Nat. Fundamental Freedoms;
2.Schranken-Schranken
•Principles of Proportionality
•Fundamental Freedoms
Thank you very much ! ! !