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F R E E M OV E M E N T GOODS
OF
Free ree moveme movement nt of goods goods – i.e. i.e. establ establish ishmen mentt of a ommon ommon mar!e mar!ett – bet"ee bet"een n Member States of E#$ is one of the f%ndamental freedoms established established b& the Treat& Treat& of Rome. The Treat& on the F%ntions of E%ro'ean #nion (TFE#) lists main obstales to the freedom of movement of goods*
+%stom d%ties on im'orts and e,'orts – - RT+/E 0 -ND 23 Disriminator& Disriminator& internal ta,ation on im'orted goods – - RT+/E 113 4%antitative restritions on im'orts and e,'orts – - RT+/E 25 -ND 26
T-/: as ‘any - 7good8 has been desribe desribed d b& the +o%rt of 9%stie 9%stie in + OMMSSON V T-/ product which can be valued in money and which are capable as such of forming the subject of a commercial transaction’ .
+%stom D%ties -RT+/E 0(1) TFE# is the fo%ndational 'rovision for this 'art of the Treat&* The Union shall comprise a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of cust custom om duti duties es on impo import rts s and and expo export rts s and and of all all char charge ges s havi having ng equivalent eect! and the adoption of a common customs tari in their relations with third countries" The idea is that that goods an freel& ir%late ir%late "ithin "ithin the internal internal mar!et. mar!et.
Third +o%ntries +o%ntries ;o"ever$ this 'rini'le does not a''l& to goods oming from third o%ntries. S%h goods m%st
12?>0 and in f%rther im'lementing legislation.
0
-RT+/E 0> OF T;E TFE# holds that one all im'ort formalities have been done "ith and a ommon %stoms tari= has been 'aid$ the goods oming from third o%ntries also beome in free ir%lation "ithin the internal mar!et.
Fisal Restritions on E# Member States -RT+/E 23
OF T;E TFE#
holds*
#ustoms duties on imports and exports and charges having equivalent eect shall be prohibited between Member States" This prohibition shall also apply to customs duties of a $scal nature" +%stom D%ties have been de
E,e'tion to -rtile 23 Member States annot resort to an& e,e'tions for breah of -rtile 23. The 'roverbial e,e'tion to -rtile 23 is a 'a&ment to be made %nder national la" for a servie rendered in the general interest im'osed b& E# la". The im'orters or e,'orters "ill bear these osts of an ins'etion at the border$ in this onte,t.
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;o"ever$ in ver& limited ir%mstanes an a harge be ae'ted %nder - RT+/E 23 OF T;E TFE#. The +o%rt ae'ts the im'osition of a harge "hen it is levied to over the ost of a mandator& ins'etion reA%ired b& an E# Reg%lation$ the amo%nt 'ro'ortionate to the ost of the servie + OMMSSON V GERM-N: . ;o"ever$ the E%ro'ean +o%rt of 9%stie (E+9) losel& sr%tiniCe s%h laims. This theme an be seen in vario%s E+9s deisions s%h as in the B RES+-N +-SE "hih "as designed to limit the ambit of an& e,e'tion to - RT+/E 0 – 23 OF T;E TFE#. . The a''liation of -RT+/E 23 OF T;E TFE# de'ends %'on the e=et of the d%t& or the harge and not the '%r'ose of im'osing the restrition as 'er the +o%rt of 9%stie. F%rthermore$ a ta, a%ght as a d%t& or a harge having an eA%ivalent e=et to %stom d%ties b& - RT+/E 23 is in e=et %nla"f%l as stated in + OMMSSON V T-/: . The E+9 rearmed its em'hasis on e=et in D -MENT-RBEDERS .
Reover& of #nla"f%l +harges n ase of %nla"f%l harges levied$ the general 'rini'le is that a Member State m%st re'a& the harges* S -N GORGO +-SE . ;o"ever$ in ir%mstanes "here the trader has 'asses on the loss to %stomers$ and reimb%rsement "o%ld a%se the trader to beome %n@%stl& enrihed$ "o%ld the reover& of %nla"f%l harges "ill not hold.
nternal Ta,ation -RT+/E 113 OF T;E TFE#$ "hih is diretl& e=etive in the Member States if E#$ 'rovides that* 'o Member State shall impose! directly or indirectly! on the products of other Member States any internal taxation of any (ind in excess of that imposed directly or indirectly on similar domestic products" %urthermore! no Member State shall impose on the products of other Member States any internal taxation of such a nature as to aord indirect protection to other products" The basi '%r'ose of this -rtile is to 'revent the '%r'ose ? ob@etive of - RT+/E 0 – 23 from being %ndermined b& disriminator& internal ta,ation – so that the loal goods are not given more 'referene than im'orted goods.
5
These 'rovisions "o%ld be of no avail if it "ere o'en to a state to 're@%die foreign 'rod%ts one the& "ere inside its o"n territor& b& lev&ing disriminator& ta,es$ thereb& disadvantaging those im'orted 'rod%ts in om'etition "ith domesti goods.
-rtile 113(1) -RT+/E 113(1) OF T;E TFE# reA%ires that "hatever s&stem of internal ta,ation a Member State ado'ts it sho%ld be a''lied "itho%t an& disrimination to similar 'rod%ts. +onretel&$ this means that higher ta,ation of foreign or im'orted 'rod%ts is 'rohibited* + OMMSSON V T-/: . Similar 'rod%ts are %nderstood as om'arable 'rod%ts in terms of the harateristis$ ingredients and the abilit& to meet ons%mer needs* + OMMSSON V FR-N+E – ;#MB/OT +-SE . The res%lt of this 'rohibition is that the ta,ation of domesti and foreign 'rod%ts m%st be eA%aliCed. The r%les relating to nondisrimination "ill also be resorted to if the 'roed%re for the ta, olletion treats domesti goods and those "hih ome from another Member State %neA%all&* + OMMSSON V RE/-ND . -RT+/E 113(1) overs indiret as "ell as diret disrimination. The E+9 has em'hasiCed that a ta, s&stem "ill be om'atible "ith - RT+/E 113$ onl& if it e,l%des ‘any possibility’ of im'orted 'rod%ts being ta,ed more heavil& than similar domesti goods* ; #MB/OT +-SE . hile the Treat& 'rohibits indiret as "ell as diret disrimination %nder - RT+/E 113(1)$ it ma& be neessar& to determine "hih is in iss%e bea%se diret disrimination on gro%nds of nationalit& annot be @%sti
The Relationshi' bet"een -rtile 113(1) and (0) -RT+/E 113(1) TFE#$ 'rohibits the im'osition of internal ta,es on 'rod%ts from other Member States in e,ess of those levied on similar domesti 'rod%ts.
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hereas$ -RT+/E 113(0) is designed to ath national ta, 'rovisions that a''l& %neA%al ta, ratings to goods are in om'etition "ith eah other. The dividing line bet"een the t"o 'roves to be 'roblemati$ d%e to the ontestable iss%e of "hether the goods are deemed to be similar or not. The relationshi' bet"een -RT+/ES 113(1) and 113(0) "as bro%ght forth in + OMMSSON V FR-N+E . The
-rtile 113(0) -RT+/E 113(0) deals "ith the 'rohibition of 'rotetionist intent in onte,t of om'eting 'rod%ts The ob@et is to 'revent these di=erential ta, ratings from a=ording indiret 'rotetion to the domesti goods – i.e. favoring of domesti 'rod%ts is 'rohibited. f a 'rovision is a%ght b& - RT+/E 113(0) the Member State has to remove the 'rotetive e=et. The methodolog& E+9 ad@%diates to "hen determining the 'rotetive e=et is fo%nd in +ommission v #H. ts @%dgment 'roeeds in t"o stages* 1. establish that there is some om'etitive relationshi' bet"een the t"o 'rod%ts – 'rod%t s%stainabilit& and ons%mer 'referene are im'ortant onsiderations. 0. onsiders "hether the ta, s&stem is 'rotetive of the domesti 'rod%t – the 'rieelastiit& of demand is an im'ortant determining fator.
The Bo%ndar& bet"een -rtile 023 and 113 112 The general 'rini'le is that the relationshi' bet"een the t"o is m%t%all& e,l%sive. The& both onern the im'osition of
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'revent disrimination against goods one the& have entered a 'arti%lar Member State. ;o"ever$ it is im'ortant to
/evies im'osed on m'orters here a state im'oses a lev& on an im'orter$ s%h a ase "o%ld normall& be deided on the basis of - RT+/E 23$ and the lev& "o%ld be deemed to a +EE. ;o"ever$ a lev& onsidered %nder -rtile 113 on the basis that the domesti 'rod%ers also have to 'a& is an %ns%essf%l arg%ment as demonstrated b& the* BRES+-N +-SE . Onl& in e,e'tional ir%mstanes the +o%rt ma& deide that the harge or lev& is haraterrised as a ta,$ the legalit& of "hih "ill be tested %nder -RT+/E 113* DENH-VT . The E+9 holds that a harge levied at the border "ill be regarded as an internal ta, onl& "here the om'arable harge levied on national 'rod%ts is a''lied at the same rate at the same mar!eting stage and on the basis of an idential hangeable mar!et* M+;-/DS .
m'orts ta,ed b%t not made b& the State of m'ort here the im'orting state does not ma!e the im'orted 'rod%t$ b%t im'oses a ta, on it nonetheless. n s%h a ase$ the harge "ill not be lassi
Seletive Ta, Ref%nd hen a state hooses to ma!e a seletive ref%nd of a ta, or if it %ses the mone& to bene
J
ta, Ko"s into the national e,heA%er and is then %sed for the bene TFE# NOTE* S T-TE -D REFERS TO FORMS OF -SSST-N+E FROM - #B/+ BOD:$ OR #B/+/:F#NDED BOD:$ GVEN TO SE/E+TED #NDERT-HNGS (-N: ENTT: ;+; #TS GOODS OR SERV+ES ON T;E GVEN M-RHET)$ ;+; ;-S T;E OTENT-/ TO DSTORT +OMETTON -ND -FFE+T TR-DE BETEEN MEMBER ST-TES OF T;E E#ROE-N #NON. The E%ro'ean +ommission monitors and ontrols State -id in the E#. Member States are obliged to notif& and see! a''roval from the +ommission before granting State -id. This gives the +ommission the o''ort%nit& to a''rove or ref%se to a''rove the 'ro'osed meas%re. +lassi<ation 'roblems as bet"een - RT+/ES 23 -ND 113 TFE# arise "hen the mone& that has been ref%nded an be lin!ed to "hat has been levied '%rs%ant to a s'ei< ta,. The orret lassi<ation "o%ld then de'end %'on "hether the ref%nd or other bene
The harge m%st be destined e,l%sivel& for
the
domesti 'rod%t m%st
be
om'letel&
4%antitative Restritions -RT+/E 25
OF T;E TFE#
states that*
quantitative restrictions on imports and all measures having equivalent eect shall be prohibited between Member States" -RT+/E 26 'rovides a similar 'rovision as - RT+/E 25 b%t relating to e,'orts. ;o"ever$ -RT+/E 2I 'rovides @%sti<ation for a State im'osing A%antitative restrition on the movement of goods for ertain ases.
The '%r'ose of im'osing a 'rohibition on A%antitative restritions is to ens%re that foreign 'rod%ts are not disriminated against and that the& have free aess to national mar!ets. The GEDDO +-SE broadl& de
Minim%m or ma,im%m 'ries for im'orted 'rod%ts /ess favorable 'ries for im'orted 'rod%ts /o"ering the val%e of the im'orted 'rod%t b& red%ing its intrinsi val%e or
inreasing its osts a&ment onditions for im'orted 'rod%ts "hih di=er from those for
domesti 'rod%ts +onditions in res'et of 'a!aging +om'osition denti<ation SiCe eight et.
-n ME4R "as de
>
The E+9 holds that the 'resene of a disriminator& intent is irrelevant for it is the e=et of the ME4R that is r%ial in 'roving the e,istene of an ME4R. t ta!es a broad vie" of meas%res that hinder the free Ko" of goods$ and the de
Disriminator& Barriers to Trade -RT+/E 25 athes national 'rovisions that favo%r domesti goods over im'orted one. There are n%mero%s t&'es of ase involving diret or indiret disrimination bet"een domesti and im'orted goods.
m'ort and E,'ort Restrition m'ort or E,'ort lienes are a%ght b& - RT+/E 25 as a erti<ate of trade removes the '%r'ose of free movement of goods. Moreover$ national 'rovisions that s%b@et im'orted goods to reA%irements that are not im'osed on domesti goods are a%ght b& -RT+/E 25* +OMMSSON V T-/:. This is e,em'li
romotion or Favo%ring of Domesti rod%ts Favo%ring or 'romoting domesti 'rod%t to the detriment of om'eting im'orts is forbidden b& - RT+/E 25. This an o%r in a n%mber of "a&s* i.
"here a state engages in a am'aign to 'romote the '%rhase of domesti as o''osed to im'orted goods* +OMMSSON V RE/-ND
ii.
"here a state has r%les on the originmar!ing of ertain goods* +OMMSSON V #NTED H NGDOM
iii.
'%bli 'ro%rement annot be str%t%red so as to favo%r domesti 'rod%ers* +OMMSSON V RE/-ND
iv.
"here the disrimination is evident in the administrative 'ratie* +OMMSSON V FR-N+E
rieFi,ing - state annot treat im'orted goods less favorabl& in la" or fat than domesti 'rod%ts thro%gh 'rie<,ing reg%lations* ;-NDE/SGESE//S+;-FT MB;
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Meas%res "hih ma!e m'orts more Di%lt or +ostl& There are n%mero%s "a&s in "hih a Member State an render it more di%lt for im'orters to brea! into that mar!et$ as e,em'li
National Meas%res vers%s rivate -tion -RT+/E 25 onl& a''lies to meas%res ta!en b& the state as o''osed to those ta!en ,
b& 'rivate 'arties* S-OD -#D+
+-SE .
ndistintl& -''liable R%les* +assis de Di@on There are man& other r%les that reate barriers to trade bet"een Member States$ other than disrimination against the nation of the 'rod%t8s origin. The +ommission a''reiated this in -RT+/E 2 OF T;E DRE+TVE J3?63. "hih overed meas%res that "ere eA%all& a''liable to domesti and im'orted 'rod%ts. Moreover$ D-SSONV//E also made it a''arent that - RT+/E 25 OF T;E TFE# an also ath indistintl& a''liable meas%re onsidering that the de
DE D9ON
holds that*
&&obstacles to movement within the #ommunity resulting from disparities between the national laws relating to the mar(eting of the products in question must be accepted in so far as those provisions may be recogni+ed as being necessary in order to satisfy mandatory requirements relating in particular to the eectiveness of $scal supervision! the protection of public health! the fairness of commercial transactions and the defence of the consumer" This list is not e,ha%stive. The mandator& reA%irements that onstit%te the r%le of reason are ta!en into ao%nt "ithin the frame"or! of - RT+/E 25$ and are se'arate from the e,e'tion fo%nd in - RT+/E 2I.
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There are a n%mber of ases fo%nd in the 'ost+assis @%dgment a''l&ing the abovementioned 'rini'les* DESERB-S G// -ND -NDRES R-#
ndistintl& -''liable R%les* -rtile 26 n ase of -RT+/E 26 OF T;E TFE# "hih 'rohibits A%antitative restritions and ME4Rs on e,'orts$ a 'rovision "ill onl& be a%ght if there is diret or indiret disrimination. t does not ath indistintl& a''liable meas%res the rationale being that to do so "o%ld im'ose a d%al b%rden on the im'orter – i.e. he "ill have to satisf& the relevant r%les in its o"n state and also the state of im'ort. This "ill not normall& be so in relation to - RT+/E 26* GROENVE/D.
The /imits of -rtile 25 +-SSS DE D9ON signaled the E+9s "illingness to e,tend - RT+/E 25 to ath indistintl& a''liable r%les. -n indistintl& a''liable r%le is one "hih a''lies$ at least on the fae of it$ to im'orted and domesti 'rod%ts ali!e. The same r%le a''lies and im'oses an eA%al b%rden on both 'rod%ts. This im'oses a d%al b%rden on the im'orter as the im'orter ma& have alread& satis
The E+9 r%lings have di=ered regarding this in man& ases. n some ases$ the E+9 held that r%les "hih did not relate to the characteristics of the goods and did not im'ose a d%al b%rden on the im'orter$ b%t onerned onl& the onditions on "hih all goods "ere sold "ere o%tside - RT+/E 25* OEBE/. hereas$ in other ases the res%lt on the same r%les have been di=erent* +NET;E4#E . n H E+H +-SE a distintion "as made bet"een the harateristis of the goods and selling arrangements. The deision "as based in 'art %'on the distintion bet"een d%alb%rden r%les and eA%alb%rden r%les.
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t held that r%les relating to the harateristis of the goods themselves that
'%t im'orts at disadvantage – i.e. reA%irements to be met – is an ME4R and therefore$ falls "ithin the so'e of -rtile 25 bea%se the& "o%ld have to be satis
sale$ 'rovided that the& e=eted in the same manner in la" or fat domesti and im'orted goods. The& im'osed an eA%al b%rden as it did not im'ose e,tra osts on the im'orter "hih 'revent their aess to the mar!et* T-NHST-TON – #NTO +-S- . The distintion dra"n in H E+H 'roves to be 'roblemati d%e to the ambig%o%s nat%re of the term 7selling arrangement8. The de
the r%le a''lies to all traders in the territor&* F-M/-RESS. the restrition e=ets in the same manner in la" and in fat$ the mar!eting of both domesti and im'orted goods D -GOSTN +-SE.
Reent ase la" that inor'orates the 'rini'le of 'rod%t %se* +OMMSSON V T-/: -H/-G-REN V ER+: M+HE/SSON
-rtile 2I* Defenes to Disriminator& Meas%res f trade r%les are fo%nd to be disriminator& the& an be saved thro%gh - RT+/E 2I T;E TFE#. The provisions of )rticle ,- and ,. shall not preclude prohibitions or restrictions on imports! exports or goods in transit justi$ed on grounds of public morality! public policy or public security! then protection of health and life of humans! animals or plants! the protection of national treasures
OF
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possessing artistic! historic archaeological value! or the protection of industrial and commercial property" Such prohibitions or restrictions shall not! however! constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States" The E+9 has onstr%ed - RT+/E 2I stritl&. Disriminator& r%les "ill be losel& sr%tiniCed to ens%re that the defene 'leaded is "arranted. The& m%st also 'ass a test of 'ro'ortionalit&* the disriminator& meas%re m%st be the least restritive 'ossible to attain the end in vie".
+ase /a"*
%bli Moralit&* ;ENN -ND D-RB: – +ONEG-TE %bli oli&* +ENTRE /E+/ER+ %bli Se%rit&* +-M#S O/ V MNSTER FOR ND#STR: -ND ENERG: rotetion of ;ealth and /ife of ;%mans$ -nimals$ or lants* +OMMSSON V #H – S-NDO BV
rini'le of M%t%al Reognition* The b%rden of 'roof %nder - RT+/E 2I rests "ith the Member State. Member State a''liation of the @%sti<ation is no" s%b@et to im'ortant ne" onditions laid do"n b& E# legislation of R EG#/-TON JI5?033 .
Mutual Recognition: Goods la"f%ll& mar!eted in one Member State sho%ld$ in 'rini'le$ be admitted to the mar!et of an& other state. This leads to om'etition among r%les$ or reg%lator& om'etition. - 'rod%er "ill normall& have to om'l& "ith the national r%les of onl& one Member State for its goods to be move freel& in the E#. Firms are then able to hoose bet"een di=erent national reg%lations. +ons%mers an hoose bet"een the 'rod%ts that om'l& "ith those r%les. This reates ‘a competitive process among the dierent national rules/ the choice of producers of where to produce and of consumers of what to but will determine the ‘best rules’ .
Mandator& ReA%irements* Defenes to ndistintl& -''liable R%les The rationale for mandator& reA%irements is that man& r%les that reg%late trade are also a'able of restriting trade$ &et some serve ob@etivel& @%sti
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designed to mitigate the e=ets of strit 'rohibitions laid do"n in the Treat& 'rovisions on free movement. The b%rden of 'roving @%sti<ation rests on the state rel&ing on the mandator& reA%irement. Member State8s a''liation of the mandator& reA%irements is no" s%b@et to im'ortant ne" onditions laid do"n b& E# legislation* R EG#/-TON JI5?033
The Relationshi' Bet"een the Mandator& ReA%irements and -rtile 2I The traditional vie" has been that the +-SSS mandator& reA%irements are se'arate from the @%sti<ations %nder - RT+/E 2I. The E+9 held that the +-SSS e,e'tions o%ld be %sed onl& in res'et of r%les that "ere not disriminator&. The +assis list of mandator& reA%irements inl%des matters s%h as the 'rotetion of ons%mers and the fairness of ommerial transations$ "hih are not mentioned "ithin - RT+/E 2I$ and the +assis list is not e,ha%stive. The E+98s "illingness to reate a broader ategor& of @%sti<ation for indistintl& a''liable r%les is e,'liable bea%se disriminator& r%les stri!e at the ver& heart of E#$ and hene an& 'ossible @%sti<ation sho%ld be narro"l& on
The Mandator& ReA%irements +ase /a"*
+ons%mer rotetion* +OMMSSON V GERM-N: Fairness of +ommerial Transations* H -R/ R-NT/ %bli ;ealth* +OMMSSON V GERM-N: rotetion of the Environment* +OMMSSON V DENM-RH l%ralism of the ress* F-M/-RESS Fostering of ertain forms of art* +NET;E4#E Road Safet&* +OMMSSON V T-/:
