Free Movement Of Goods

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Free movement of goods

Back 1

Article 26 TFEU - removal of trade barriers

Fundamental to the internal market = a stage of economic integration

Front 2

Main treaty provisions

Back 2

Article 30 TFEU

Article 34 TFEU

Article 35 TFEU

Article 36 TFEU

Article 110 TFEU

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Meaning of Goods

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Commission v Italy

"...products which can be valued in money and are capable of forming the subject of commercial transactions."

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Article 30 TFEU

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The prohibition of customs duties and charges having equivalent effect (CHEE)

This article is inapplicable when dealing with internal taxation. While a CHEE is prohibited a tax is lawful.

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Customs duties

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These are;

1) a pecuniary charge

2) imposed by reason of crossing a frontier

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CHEE

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Defined in Statistical Levy as

"a pecuniary charge imposed on both imports and exports by reason that they cross a frontier which is not a customs duty in the strict sense"

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Exceptions

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A charge for a service rendered which must satisfy;

1) there is a direct benefit to the goods or traders concerned

2) the charge must be proportionate

Services permitted by EU law may constitute a CHEE

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Article 110 TFEU

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The prohibition of discriminatory taxation

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Internal taxation

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Defined in Denkavit as 'a general system of internal dues applied systematically with the same criteria to domestic and imported products alike'

A charge on goods cannot be both a tax and a CHEE.

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Article 101 (1)

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Prohibits unequal taxation of similar products

If this is breached then the MS must equalise taxation

To determine if they are similar it is necessary to determine if they have similar characteristics and comparable use.

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Article 101 (2)

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Prohibits internal taxation that protects domestic products not similar to imported ones but in competition. If breached the MS must remove the competitive effect of the tax regulation. The courts assess if demand increases in a product due to a price increase or limited availability of the other. Considerations also given to and present/future consumer preferences.

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Discrimination

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Direct = openly taxes impoted goods at a different rate to domestic goods (rarely seen)

Indirect = appears not to discriminate but has a discriminatory effect in practice

The tax may not be discriminatory, it may be the method of collection or the basis of assessment.

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Objective Justification

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There are no express defences and direct discrimination can never be justified.

Indirect discrimination may be justified by an objective policy reason (Commission v Greece)

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Commission v Greece

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Greece taxed cars at different rates using an environmental justification. The Court of Justice held that this did not persuade consumers to purchase cars of Greek maufacture over foreign cars.

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Articles 34 and 35 TFEU

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The prohibition of quantitative restrictions and measures having equivalent effect (MEQRs)

34 = prohibition on imports, also applies where a MS has failed to adopt measures to ensure the free movement of goods

35 = prohibition on exports

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Quantitative restrictions

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Limitations on import or export by an amount or value.

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MEQR's

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Measure Equivalent to Quantitative Restrictions

Dassonville formula:

'All trading rules enacted by MS which are capable of hindering, directly or indirectly, actually or potentially, intra-community trade.'

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Directive 70/50

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No longer formally applicable

Provides for two types of MEQR's

- Distinctly applicable

- Indistinctly applicable

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Distinctly applicable MEQRs

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Measures that do not apply to domestic or imported products equally

Non-exhaustive list contained in Article 2(3) of the directive

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Indistinctly applicable MEQRs

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Measures which apply to domestic and imported products equally. Only breaches Art 34 if disproportionate or protects domestic products at the expense of imported products.

Non-exhaustive list contained in Article 3 of the directive

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Justification of measures

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1) The principle of mutual recognition - the presumption that a product sold in one MS should be able to be sold in another

2) The rule of reason - rebuts the principle of mutual recognition

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The rule of reason

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Rebuts on the following grounds (non-exhaustive) and applies to indirectly discriminatory measures only

1) the effectiveness of fiscal supervision

2) the protection of public health

3) the fairness of commercial transactions

4) the defence of the consumer

5) and others developed in case law (environmental protection ect)

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Keck

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Selling arrangements = rules relating to the market circumstances in which the goods are sold.

These fall outside of the scope of Art 34 TFEU as long as they apply and affect all traders with the national territory in the same manner.

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Article 36

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Provides exceptions to Articles 34 and 35.

Exhaustive list.

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No arbitrary discrimination/disguised restriction on trade

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Any justifications must conform to the desire to ensure the free movement of goods and only go as far as is necessary