Free Movement Of Goods

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Article 26 TFEU --> Internal Market

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The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons services and capital is ensured.

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Meaning of the word "State" given by the CJEU --> Commission v Ireland (1982)

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Not only public bodiescome within its scope but also private bodies which receive public finances andare supervised by public authorities

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Broad definition of goods as well -->Commission v Italy (Italian Art Case)

Goods include any product which can be valued in money and which is capable of forming the subject of a commercial transaction

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Jagerskiold v Gustafsson --> intangible benefits do not come within this definition

Goods possess tangible physical characteristics

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Examples of goods

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o Tobacco

o Yoghurt

Chocolate

Spectacles

Paintingsand works of art

Pornographic materials

Strawberries

Bakery products

Chewing gum

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Things that are also goods

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Blood and blood components

Humanplasma

Bees

Waste

Electricity

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THE ELIMINATION OF MONETARY BARRIERS TO TRADE

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In order to create an area where trade wasfacilitated rather than hampered, customs duties had to be removed and a newsystem of regulation put into place

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Article 28 TFEU

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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.

The provisions of Article 30 and of Chapter 3 of this Title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States.

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Art 28 provides for the creation of a Common Customs Tariff --> CCT is charged on all goods imported into the Union from non-MSs. It is charged at the same rate no matter which of the MSs the goods are imported into or where they are exported to

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Arts 28 and 29 TFEU also make it clear that once imported goods have been subjected to the Common Customs Tariff, they are considered to be in "free circulation" and should be treated in exactly the same manner as goods originating from within the EU

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What is free trade?

Internationaltrade left to its natural course without tariffs, quotas, or other restrictions

• What problems canemerge in the process of free trade?

! Protectionism ▼ (whichleads to) ! Tradebarriers + Subsidisation of national industries

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Trade barriers may be in the form of

∀ Quantitative restrictions

∀ Product requirements/trading rules ∀ Customs duties

∀ Discriminatory taxation

• How can these problems be solved? o Agreement for removal of trade barriers o Mutual recognition of the goods of each country that is party to the agreement

o (to a certain extent) Harmonisation of product requirements/trading rules

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The Different Stages of Integration

• Free trade area : Removal of all impediments to the free movementof goods among the participatingcountries

BUT

Each State retains its autonomy to regulate itstrading relations with countries that are not part of the free trade area, i.e.States remain free to impose customs duties on imports coming from outside thefree trade area - Problem?

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Customs Union :

Free trade area + A common external policy in respect of countries that are not part of the free trade area (common external tariff)

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Internal Market : Customs Union + Free movement of persons, services and capital

Monetary Union : Internal market + Single Currency

Economic Union : Monetary Union + Single monetary and fiscal policy controlled by a central authority

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Political Union : Economic Union + A central authority is responsible to a central parliament with the sovereignty of a nation’s government. Usually, common foreign and security policies administered by the parliament

Full Union : Complete unification of the economies involved and a common policy on sensitive matters such as social security, income tax etc.

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Techniques of economic integration in the EU

Negative integration -->The tools for removing obstacles to free(inter-state) movement:

The “fundamental freedoms” (aka “free movement provisions”or the “market freedoms”)

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Free movement of goods --> Arts. 34 + 35 TFEU Free movement of services --> Art. 56 TFEU Free movement of workers --> Art. 45 TFEU Freedom of establishment --> Art. 49 TFEU

Free movement of capital --> Art. 63 TFEU

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Whichgoods can benefit from free movement between member states?

Goods which:

a) Originate within the EU; OR b) Originate in a country outside the EU, BUT are infree circulation within the EU

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See, Article 29 TFEU: “Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges”.

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Article 34 TFEU

Quantitative restrictions on imports and allmeasures having equivalent effect shall be prohibited between Member States.

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Article 34TFEU is directly effective (Case 74/76, Ianelli, [1977] ECR 557)

BUT only VERTICALLY directly effective – Case311/85, Vlaamse, [1987] ECR 3801:

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HOWEVER, it should be noted that the Court of Justice has interpreted the notion of “State” broadly so that not only the central government or the authorities of a Member State are bound by Article 34 TFEU, but also bodies which regulate the conduct of a particular profession (Joined Cases 266 & 267/87, R. v. Royal Pharmaceutical Society of Great Britain,[1989] ECR 1295) or which are used as a medium for the execution of a measure which is contrary to Article 34 TFEU (Case 249/81, Commission v. Ireland (“Buy Irish”), [1982] ECR 4005).

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Note,also, that the State may have to take responsibility for the action ofindividuals who have been disrupting the application of Article 34 TFEU, eventhough the activity of the individuals is not itself caughtby Article 34 TFEU. --> In such cases, the Court rules that the failure of a MS to act in a way which will stop individualsimpeding the free movement of goodsamounts to a violation of Article 34TFEU read together with Artic le 4 (3 ) T EU . ⇒ Case C-265/95, Commission v.France (Strawberries), [1997] ECR I-6959

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Article 34 TFEU

Quantitative restrictions on imports and all measures having equivalenteffect shall be prohibited between Member States.

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Article34 TFEU includes a twofold prohibition: a) Quantitative restrictions on imports (QRs)

b) Measures having equivalent effect toquantitative restrictions on imports (MEQRs)

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Definition of quantitative restrictions --> Geddo

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Case 2/73, Geddo v. Ente NazionaleRisi, [1973] ECR 865, para. 7:

“...measures which amount to a total orpartial restraint of, according to the circumstances, imports, exports orgoods in transit”.

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The Dassonville Formula (Case 8/72, Dassonville, [1974]ECR 837, paragraph 5):

“All trading rules enacted by Member Stateswhich are capable of hindering, directly or indirectly, actually orpotentially, intra -Community trade are to be considered as measures having aneffect equivalent to quantitative restrictions”.

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Dassonville -->Concerned a Belgian law which said that if you want to import scotch whiskey, it has to be accompanied by a document which says that it is authentic à the documents would obvs be produced by the company where the product is produced (UK) à case was before we joined the EU à someone wanted to import whiskey from France where it had already been imported from the UK Was this contrary to art 34? It was clear that the measure was not a quantitative restriction because it didn’t say anything about the number of bottles of whiskey that could have been imported à it would have been a quantitative restriction and a partial ban of import if Belgium said only 100.000L of whiskey can be imported in one year à if law said none could be imported, that would be a QR and total ban If not a QR was it a MEQR?

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Article 36 --> MEQRs can be justified

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"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."

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MEQRswithin the meaning of Article 34 TFEU can be either

∃ Distinctly applicablemeasures; or ∃ Indistinctlyapplicable measures

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Distinctly applicablemeasures

Different burden in law + Different burden in fact =Distinctly applicable measure

=Direct discrimination on the ground of origin of the products (= direct discrimination against importedproducts)

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Example of adistinctly applicable measure: ⇒ CaseC-379/98, PreussenElektra , [2001] ECR I-2099 --> Germanlaw which required companies which supplied electricity to purchase all greenelectricity that they needed from producers in their region àfrom the court’s case law, we know that distinctly applicable measures areconsidered to be MEQRS (measures which do not say anything about the quantityof goods that can be imported but require only imported good to comply withcertain requirements are in all instances MEQRS)

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Distinctly applicable measure --> one category

Indistinctly applicable measure --> all kinds share the same characteristic which is that they apply thesame way in law so if you go and read the measure, the measure will not makeany reference to origin e.g. all fruit liquors need to have a minimum alcoholcontent of 25% before being sold in the UK àdoes not draw a distinction between domestic and important drinks à if it said only imported fruit liquors needed this, it would be a distinctly applicable measure

· Whether something applies the same burden inlaw, you can decide this by saying what the measure says and whether it drawsany distinction between domestic and important à ifin writing, it does then it is a distinctly applicably measure à if does not draw any distinction between domestic and imported, it isan indistinctly applicable measure

· And MEQR can be either a distinctly orindistinctly applicable measure

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In a problem question on free movement of goods --> If it is not a QR, next question would be if it is a MEQR

· First writeDassonville definition àthen go through a number of steps

· If ameasure is a QR, next step is to consider whether it is justified --> use art 36 · If ameasure is found to be a MEQR à next step would be to consider whether it is justified à use both art 36 and another set ofjustifications which are the mandatory requirements

NOTE: Reverse discrimination is not prohibited by EU law (Case 98/86, Mathot , [1987] ECR 809). --> Discrimination which is suffered by a category of goods or by a category of persons which are normally advantaged à normally MSs try to benefit their own goods or their own workers à EU wants to prohibit this because that would stop free movement and defeat the whole purpose of the EU à if a MSs had a good better than domestic good, no problem because it does not impede freedom of movement

NOTE: Distinctly applicable measures can only be justified under the Article36 TFEU derogations (“the Treaty derogations”)(Case 113/80, Commission v.Ireland (Irish souvenirs), [1981] ECR 1625)

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Mathot

Belgian legislation which required ONLY Belgian butter to have certain info on its packaging like address of the producer à such a requirement was not imposed on butter imposed form other states à this requirement meant that producers in Belgium had to incur extra cost and so in order to be profitable, they needed to up the price à Belgium treated its own butter worse than other butter à EU doesn’t care about this as it didn’t treat imported butter worse than domestic butter

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Indistinctly applicable measures

Same burden in law +

a) Either Different burden in fact (e.g. rules that haveimpose a dual-burden on imported products) = Indirectdiscrimination on the ground of origin of the products (= indirectdiscrimination against importedproducts [aka de factodiscrimination])

b) Or Same burden in fact (i.e. equal burden rules) =Genuinely non-discriminatory measures NOTE: Indistinctly applicable measures can bejustified BOTH under the Article 36 TFEU derogations (“the Treaty derogations”)AND the mandatory requirements (to be seen below)

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NOTE: Indistinctly applicable measures can bejustified BOTH under the Article 36 TFEU derogations (“the Treaty derogations”)AND the mandatory requirements (to be seen below)

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C. Cassis de Dijon [ 1 9 7 9 ] E C R 6 4 9 -->Germanlaw which said in order for fruit liquors to be sold in Germany, needed a minimum25% alcohol percentage àCassis is a French fruit liquor and has a percentage of between 15-20% and sowhen they tried to import it into Germany, not allowed because did not complywith German requirements Case was taken before a German court and the questionwas whether this legislation amounted to a breach of art 24 --> was a MEQR not a QR --> indistinctly applicable

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Althoughthe possibility that Article 34 TFEU could be applied to indistinctlyapplicable measures was apparent in Dassonville(and through the provisions of Dir 70/50) it was only made clear in Cassisde Dijon that indistinctly applicable rules may be caught by Article 34 · AlsoCassis is important because in itsjudgement, the Court of Justice established two principles ( the Cassisprinciples)

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Principle of Mutual recognition --> When a product is lawfully produced in accordance with the rules of one MS, the host MS must accept it as it is within its territory à basically MSs need to recognise the laws of each other

14. “....There is therefore no valid reason why, providedthat they have been lawfully produced and marketed in one of the MemberStates, alcoholic beverages should not be introduced into any other MemberState; the sale of such products may notbe subject to a legal prohibition on the marketing of beverages with an alcoholcontent lower than the limit set by the national rules ”.

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Each MS can have its own rules as to the production of fruit liquors in their territory but if goods are lawfully produced within their country of origin in accordance with that country's rules, they should be accepted into other MSs as they are without the MS where it is being imported insisting on apply its own rules Meant Germany can have its own rules with regards to fruit liquors by German producers but the principle of mutual recognition requires Germany to shut up and not say anything to goods coming from other MSs and so because French Casis de Dijon was produced in accordance with French rules, this meant that Germany should mutually accept the French rules and accept the liquor as it is even if it doesn’t comply with German requirements

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Principle --> Rule of reason/Mandatory requirements

“In theabsence of Community rules it is for the Member States to regulate all mattersrelating to the production and marketing of alcohol on their own territory. Obstacles to movement within the Community resulting from disparitiesbetween national laws relating to the marketing of the products in questionmust be accepted in so far as those provisions may be recognised as beingnecessary in order to satisfy mandatory requirements relating in particular tothe effectiveness of fiscal supervision, the protection of public health, thefairness of commercial transactions and the defence of the consumer”.

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Court said at EU started by checking if there was a directive or regulation about alcohol content à no such thing and so there are no community rules governing the matter à EU does not have a problem with Germany putting this requirement on fruit liquors

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Advantages of Cassis

• Nationalregulatory autonomy respected + retention of cultural identity: No excessivecentralisation (No “Euro-products”) • Experimentationat national level

• Widerconsumer choice

• Easier andquicker adaptation to technological change

• Race tothe top? .

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The Post-Cassis Jurisprudence on indistinctly applicable measures

Many of the cases on indistinctly applicablemeasures concern packaging and presentation requirements (i.e. indistinctlyapplicable measures which are indirectly discriminatory on the ground oforigin).

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Packaging Requirements

Rau [1982] ECR 3961 -->Belgianlegislation which required that margarine had to be packaged In cube shapedboxes --> was this measure a MEQR --> yah

Belgian laws which require all margarine sold in Belgium to be in cuboid shape so as to distinguish it from butter to the effect that shape packaging rules prima facie hinder imports, that other measures, e.g. informative labelling, exist to prevent consumer confusion

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Rau

In the absence of common rules relating to the marketing of the products concerned, obstacles to movement within the Community resulting from disparities between the national laws must be accepted in so far as such rules, applicable to domestic and imported products without distinction, may be recognised as being necessary in order to satisfy mandatory requirements relating inter alia to consumer protection. Such rules must, however, be proportionate to the aim in view; and if a member-State has a choice between various measures to attain the same objective, it should choose the means which least restrict the free movement of goods.

National laws requiring a product to be marketed in a particular form of packaging (in casu, margarine in cuboid packs), applied equally to domestic and imported goods, may not be an absolute barrier to imports from other member-States but does render their marketing more difficult or more expensive either by barring them from certain channels of distribution or by adding to the costs through the need to produce special packs for that market only

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Imports. Consumer protection.The imposition of a particular shape of packaging (in casu, cuboid blocks to the exclusion of tubs and cylinders for margarine) in order to prevent consumer confusion with a similar product (butter) is excessive where other anti-confusion measures are available, such as labelling, which would hinder less the free movement of goods.

The Court interpreted Article 30 EEC in the context of Belgian laws and found the requirement that margarine should be marketed in a particular shape was a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the EEC Treaty.

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Mars [1995] ECR I-1923 -->Germanlaw where there was an advertising campaign by Mars which consisted on changingthe packaging with a flash that said “+ 10%” for free à did not allow Mars barto be sold because could be seen as misleading à question was whether this was a MQR àcourt said yes and did not accept justification of protecting consumer and theycan say it was not as big as the flash but they get that the bar is biggerline

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Where the packaging of goods indicates a promotional increase in the quantity of the goods contained, the mere possibility that importers and retailers might increase the price of the goods and that consequently consumers might misassume that the price previously charged is being maintained is insufficient to justify a general prohibition which may hinder intra-Community trade. This, in any case, does not prevent Member States from taking appropriate steps against duly proved actions which have the effect of misleading consumers.

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Mars --> At the material time, the ice-cream bars were presented in wrappers marked “+10%” . That presentation had been chosen as part of a short publicity campaign covering the whole of Europe during which the quantity of each product was increased by 10 per cent. --> The plaintiff association brought proceedings under those in order to prevent the “+10%” marking from being used in Germany. --> Secondly, the plaintiff in the main proceedings contends that the way in which the “+10%” marking was incorporated in the presentation gave the consumer the impression that the product had been increased by a quantity corresponding to the coloured part of the new wrapping. The coloured part occupied considerably more than 10 per cent. of the total surface area of the wrapping and this, in the plaintiff's view, was misleading and therefore contrary to section 3 of the UWG.

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The first question to be examined is whether a prohibition of the marketing of goods bearing on their packaging a publicity marking such as that in question in the main proceedings constitutes a measure having an effect equivalent to a quantitative restriction within the meaning of Article 30 of the Treaty. -->Although it applies to all products without distinction, a prohibition such as that in question in the main proceedings, which relates to the marketing in a Member State of products bearing the same publicity markings as those lawfully used in other Member States, is by nature such as to hinder intra-Community trade. It may compel the importer to adjust the presentation of his products according to the place where they are to be marketed and consequently to incur additional packaging and advertising costs.Such a prohibition therefore falls within the scope of Article 30 of the Treaty.

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However, it is contended that the measure in question is justified because a not insignificant number of consumers will be induced into believing, by the band bearing the “+10%” marking, which occupies more than 10 per cent. of the total surface area of the wrapping, that the increase is larger than that represented.--> Such a justification cannot be accepted.--> Reasonably circumspect consumers are supposed to know that there is not necessarily a link between the size of publicity markings relating to an increase in a product's quantity and the size of that increase.

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Product Requirements

Case 407/85, Drei Glocken, [1988] ECR 4233 -->Italianrule which said in order for pasta to be sold in Italy, it must be mad entirelyfrom durum wheat because the Italian consumer is used to this kind of pasta andif they find pasta with different kinds of wheat then they will not realisethis and would buy the cheaper and worse quality pasta from other MSs withoutrealising they’re getting sh*ttier quality pasta à was this a MQR à yes because again it was a product requirement andother MSs had their own product requirements

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In order for packaging to complywith the rules in these cases, the packaging would have to be changed for aspecific market in a country

· These cases were about indistinctlyapplicable measures àthere are indirectly discriminatory or dual burden rules and then there aregenuinely non-discriminatory rules· When you see a problem question witha packaging requirement or product requirement (e.g. needs a good to beproduced in a different way) we have a dual burden measure which is indirectly discriminatory

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HOWEVER, there have also been a number of caseswhich concerned indistinctly applicable rules on market circumstances(“selling arrangements”), and which were genuinely non-discriminatory

Cases 60 & 61/84, Cinetheque , [1985] ECR 2605

Case 145/88, Torfaen , [1989] ECR 3851

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Cinetheque , [1985] ECR 2605

Non-discriminatory national legislation which aims to protect cinema exhibition of films as against other alternative forms of distribution ( in casu , by prohibiting the marketing of videos of a film until the lapse of one year after first exhibition of that film in the cinemas) does not restrict imports of videograms contrary to Article 30 EEC so long as its negative effect is proportionate to its legitimate aim.

The Court interpreted Articles 30 and 59 EEC in the context of French legislation which prohibited the marketing of videograms of a film until one year after first exploitation of the film in cinemas to the effect that although it prevented the effective importation of foreign videograms during the 'window' period the protection of cinema exhibition against other forms of exploitation for a limited time was legitimate and therefore did not infringe Article 30 and that the distribution of videograms of films was not the supply of services but the movement of goods.

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Torfaen --> UK legislation stopping shops opening on Sunday à were they MQRs? à these kind of laws are MQRs and need to be justified à the rules in cases like Rau required the goods or packaging to be changed and so increased the costs of those goods but when we think about these kind of cases, no costs No extra detriment for imported goods and no different impact

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D company opened its retail premises to customers on Sundays for transactions other than those permitted by Schedule 5 to the Act of 1950. Approximately 10 per cent. of the defendant's total stock in 1987-88 was imported from other member states of the Community --> a preliminary ruling, inter alia, the question whether the prohibition on Sunday trading in retail premises, which had the effect of reducing the sale of goods in those premises including goods imported from other member states, was a measure having equivalent effect to a quantitative restriction on imports contrary to article 30 of the E.E.C. Treaty.

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On the application for a preliminary ruling: -Held, that national rules governing the opening hours of retail premises which reflected national or socio-cultural characteristics could be justified as being consistent with the objectives of public interest; that, accordingly, article 30 did not apply to national rules prohibiting retailers from opening their premises to customers on Sunday where the restrictive effects on Community trade which might result from those national rules did not exceed the effects which were natural to trade rules of that kind; and that the question whether the specific national rules did exceed that limit was a matter of fact for the determination of the national court

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K E C K

We sawabove that through

Dassonville, Cassis de Dijon, and most of the Court’scase-law during the 1980s and early 1990s, a very broad interpretation wasgiven to the term “MEQRs”. This led to a situation whereby all Member Statemeasures (i.e. even those imposed an equal burden on domestic and importedgoods and thus were genuinely non-discriminatory) fell within the scope ofArticle 34 TFEU.

Why is this over extension the scope of Article 34 TFEU problematic?

• Over-intrusion of EU law into nationalregulatory autonomy? • Issue ofburden of proof: Presumption of illegality for ALL measures: up to the MemberStates to prove that the contested measure does not impede the free movement ofgoods.

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“Clearly, the Dassonville test is wide - arguably too wide if it is to includerules which are both non-discriminatory and which have only hypotheticaleffects on trade. The ECJ's restrictive approach to the rule of reason and thederogation in Article [36] compounds the difficulties in this area. Even forindistinctly applicable measures, once the primafacie case of the MEQR had been successfully raised, then the burden ofproof would fall on the Member State to justify the rule. Given that in someinstances the rule of reason would be assessed by national courts, there was areal risk that there would [be] an unequal assessment as to whether thenational rule was justified - as the different approaches in the Sunday Trading cases before a variety ofBritish courts illustrated. Equally problematical was the lack of certainty inthis area. Arguably these latter problems might have been at least mitigated byclearer (and earlier) guidance by the ECJ"

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The problems with this case - law · Inconsistency between the various rulings of theCourt &Uncertainty

· Thelegitimacy of the ECJ was being eroded by its degree of involvement in judgingthe reasonableness of any marketregulation (i.e. not only market regulation which had a particularly negative impact on inter-Statetrade)

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Also --> Abusive use of EU law by traders: See para 14 of Keck:

“In view of the increasing tendency of traders to invoke [Article 34 of the Treaty] as a means of challenging any rules whose effect it is to limit their commercial freedom even where such rules are not aimed at products from other Member States, the Court considers it necessary to re-examine and clarify its case-law on this matter.”

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There arecertain rules – market circumstances rules – which although they may limit thefreedom of traders, they are nevertheless incapable of hindering specifically inter-state trade. Market circumstances rules are those concerning who sells a product; when a product can be sold; where a product can be sold; and how (e.g. with a gift) a product can besold. They merely limit the freedom of traders but they do not have adetrimental impact only on goods that move between Member States – they affect all goods (whether they move betweenMember States or not) in the same way

• Dassonville and Cassis de Dijon aresufficiently broad so as to include within the scope of Article 34 TFEU market circumstances rules which impose an equalburden on domestic and imported goods – i.e. rules which are indistinctlyapplicable and genuinelynon-discriminatory (i.e. equal burden rules)

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Keck says Art 34 permits MSs to limit freedom of traders as longas they do it in a neutral way

Keck and Mithouard

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Joined Cases C - 2 6 7 & 2 6 8 / 9 1 , Keck and Mithouard , [ 1 9 9 3 ] EC R I - 6 0 9 7

Keckand Mithourard own supermarkets in France and put beer and coffee in there,these products were sold below the price at wholesale level e.g. would buy fora quid and sell for 80 p àwanted to promote products because they were new à resale at a loss à France prohibited this by law and so when they tried this,they were prosecuted and so they used art 34 as a defence and sent a Frenchrule which prohibits selling for cheaper as a promotion method contravened freemovement à prohibition of resale at a loss washeld not to be an MEQR -->Court kinda changed previous case law to a certainextent àcases in the 80s, courts included both measures which were indistinctlyapplicable and indirectly discriminatory (dual burden measures) as well asequal burden measures (indistinctly applicable and were genuinely notdiscriminatory – neutral) within thedefinition of MEQR

In Keck, in order to comply with this law, no one needsto change product or packaging and so it is an entirely neutral measure andanyone who sells any kind of product cannot use resale at a loss as a promotionand domestic good would have been harmed in the same was as imported goods If it was considered an MEQR, France would have tojustify it àcourt said to France they can keep the law because it is entirely neutral

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"It is not the purpose of national legislationimposing a general prohibition on resale at a loss to regulate trade in goodsbetween Member States. Such legislation may, admittedly, restrict thevolume of sales, and hence the volume of sales of products from other MemberStates, in so far as it deprives traders of a method of sales promotion. Butthe question remains whether such a possibility is sufficient to characterisethe legislation in question as a measure having equivalent effect to aquantitative restriction on imports.

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In view of the increasing tendency of traders to invoke [Article 34 of the Treaty] as a means of challenging any rules whose effect it is to limit their commercial freedom even where such rules are not aimed at products from other Member States, the Court considers it necessary to re-examine and clarify its case-law on this matter. 15. In ‘Cassis de Dijon’ ... it was held that, in the absence of harmonisation of legislation, measures of equivalent effect prohibited by Article [34] include obstacles to the free movement of goods where they are the consequence of applying rules that lay down requirements to be met by such goods (such as requirements as to designation, form, size, weight, composition, presentation, labelling, packaging) to goods from other Member States where they are lawfully manufactured and marketed, even if those rules apply without distinction to all products unless their application can be justified by a public-interest objective taking precedence over the free movement of goods.

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However , contrary to what has previously been decided,the application to products from other Member States of national provisionsrestricting or prohibiting certain selling arrangements is not such as to hinder directly orindirectly, actually or potentially, trade between Member States within themeaning of the Dassonville judgment .... provided that those provisionsapply to all affected traders operating within the national territory andprovided that they affect in the same manner, in law and in fact, themarketing of domestic products and of those from other Member States

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Where those conditions are fulfilled, theapplication of such rules to the sale of products from another Member State isnot by nature such as to prevent their access to the market or to impede accessany more than it impedes the access of domestic products. Such rules thereforefall outside the scope of Article [34] of the Treaty.

Accordingly, the reply to be given to thenational Court is that Article [34] of the [FEU] Treaty is to be interpreted asnot applying to legislation of a Member State imposing a general prohibition onresale at a loss.

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What we essentially get from Keck

1) THIS MEASURE APPLIES TO ALL THE AFFECTED TRADERS IN THE COUNTRY

2) THEY AFFECT DOMESTIC AND IMPORTED PRODUCTS IN THE SAME WAY

Not MEQRs provided they satisfy two conditions

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Selling arrangements --> New name for measures which are basically equal burden measures

Applying these, they concluded it was not an MEQR à selling arrangement which satisfied both of these conditions This law applied to all the affected traders operating within the national territory as all retailers in France could not use resale at a loss--> If you examine the effect of this prohibition affected domestic and imported goods in the same way à satisfied second condition

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Measures laying down product requirements -->(Cassis applies)

• Measures regulating selling arrangements(marketing circumstances) (Keckapplies)

Keck presumptions and the burden of proof: ·   If a measure is classified as aproduct requirement, it is presumed to impede market access (Cassis) – the perse illegal approach – it is presumed to be an MEQR and needs to be justified à burden on MS to prove the measure is justified

· If a measure is classified as aselling arrangement, it is presumed that it does not hinder access to themarket and so is considered not to be an MEQR, unless either (or both) of theKeck conditions is not satisfied - the per se legal approach

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Measures laying down product requirements --> Dual burden measures à these continue to be analysed under the Cassis principle E.g. if Italy introduces a rule saying all pasta needs to be made from durum wheat à product requirement so apply Cassis case --> mutual recognition, etc.

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What is a Selling Arrangement?

• No definition provided by the ECJ • The Courtrecently summarised its case-law on what can be considered a sellingarrangement in Case C-71/02, Karner,[2004] ECR I-3025, para. 38: “Provisions concerning inter alia the place and times of sale of certain products andadvertising of those products as well as certain marketing methods areprovisions governing selling arrangements within the meaning of Keck and Mithouard”.

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Examples of rules which have been considered by theCourt to be regulating selling arrangements:

! Nationalrules on the times and places at which goods could be sold (Joined Cases C-69& 258/93, Punto Casa, [1994] ECRI-2355 ) ! Rules requiring retailers of particular goods tohave actual premises in the locality (Case C-253/98, TK-Heimdienst[U1] , [2000] ECR I-151 and Case C-322/01, DocMorris, [2003] ECR I-14887)

! Rulesobliging retailers to be licensed (Case C-20/03, Burmanjer, [2005] ECR I-4133)! Rulesprohibiting selling in private homes (Case C-441/04, A-Punkt, [2006] ECR I-2093)

! Restrictions on advertising[U2] (Case C-412/93, Leclerc-Siplec, [1995] ECR I-179)

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Problems with Keck

• The Courtdid not specify which of its previous case-law was overruled (“contrary to whatwas previously decided”)

• The Courtdid not provide a clear definition of the term “selling arrangements” • Thedistinction between product requirements and certain selling arrangements isnot clear (see Familiapress etc)

• The phrase“selling arrangements” is too narrow in that it cannot be interpreted toinclude certain rules which are – obviously – harmless to inter-state trade(such as non-discriminatory restrictions on planning and building in the greenbelt and non-discriminatory restrictions on use)

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The phrase “selling arrangements” is, also, sometimes too broad in that it catches certain “dynamic” measures (such as restrictions on advertising and therefore takes them outside the scope of Article 34 TFEU even though they do affect inter-state trade)

∋ The problem with dynamic selling arrangements in more detail

• Static selling arrangements: rules relating to the hours at which shops may be open, the length of time for which people may work, or the type of premises in which certain goods may be sold.

• Non-static or dynamic selling arrangements include the ways in which a manufacturer chooses to market this specific product, through a certain form of advertising, free offers, and the like

• Court has said both dynamic and static selling arrangements means apply Keck but if it is dynamic, it is more likely that it will not satisfy the Keck conditions

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MEQR if one or none of conditions are satisfied à if both conditions are satisfied, the measure is not an MEQR

The objection to taking the latter out of Article 34 TFEU is that they may relate more closely to the definition of the product itself. Non-static selling arrangements can form an integral aspect of the goods, in much the same way as do rules relating to composition, labelling, or presentation.

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However, dynamic selling arrangements have increasingly been includedwithin the scope of Article 34 TFEU, since they are considered as notsatisfying the second Keck condition: The second Keck condition:“Does not affect in the same manner, in law and in fact, the marketing ofdomestic products and of those from other Member States”

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

ASwedish ban on television advertising directed at kids under 12 and a ban oncommercials for skin care products à question was whether this was a selling arrangementor product requirement àselling arrangement àso you start by saying this is a selling arrangement à then go on to applyKeck conditions àfirst condition n says that the measure applies to all traders operating in thenational market (this was the case here) à second condition à the measure does not refer to the origin of goodsand so the first part of the second condition is satisfied àsecond part ofsecond condition says it must affect the same way inlaw the marketing of domestic and foreign products à advertising is one ofthe few ways for foreign goods to be promoted in the market so in this case,although this was a selling arrangement and satisfied first condition and firstpart of second condition, it did not satisfy the second part of the secondcondition about being affected in the same way à it was an MEQR

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42. ....it cannot be excluded that an outright ban, applying in one Member State, of atype of promotion for a product which is lawfully sold there might have agreater impact on products from other Member States. 43. Although the efficacy of the various typesof promotion is a question of fact to be determined in principle by thereferring court, it is to be noted that ... de Agostini stated that televisionadvertising was the only effective form of promotion enabling it to penetratethe Swedish market since it had no other advertising methods for reachingchildren and their parents. 0"/>,~)ס

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Gourmet, [2001] ECR I-1795 -> Was an MEQR so it was up to Sweden to justify it

Injunction restraining the publisher Gourmet International Products from advertising wine and whisky in its magazine. The Swedish Law on Alcohol provided that, in view of the dangers associated with the consumption of alcohol, alcoholic beverages should be marketed in moderation. As far as advertising in the press was concerned, advertising was prohibited in publications aimed at the general public but not in publications aimed at the trade. Gourmet insisted that, since its magazine was sold for 90 per cent by subscription to traders and specialised retailers, the prohibition constituted a restriction to the freedom of movement guaranteed under Community law. The national court referred two sets of questions to the European Court on the interpretation of Articles 30 and 36 of the E.C. Treaty --> A prohibition on the advertising of alcohol such as the one in question could be justified on the basis of protection of public health under Article 59 of the E.C. Treaty provided that it was proportionate to the objective. It would be for the national court to assess whether the prohibition was proportionate and that there did not exist less restrictive ways of achieving the public health objective.

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It is apparent that a prohibition on advertising... not only prohibits a form of marketing a product but in reality prohibitsproducers and importers from directing any advertising messages at consumers,with a few insignificant exceptions. 21. Even without its being necessary to carry out aprecise analysis of the facts characteristic of the Swedish situation, which itis for the national court to do, the Court is able to conclude that, in thecase of products like alcoholic beverages, the consumption of which is linkedto traditional social practices and to local habits and customs, a prohibitionof all advertisements in the press, on the radio and on television, the directmailing of unsolicited material or the placing of posters on the public highwayis liable to impede access to the market by products from other Member Statesmore than it impedes access by domestic products, with which consumers areinstantly more familiar. 25. A prohibition on advertising such as that inissue ... must therefore be regarded as affecting the marketing of productsfrom other Member States more heavily than the marketing of domestic productsand as therefore constituting an obstacle to trade between Member States caughtby Article [34] of the Treaty.

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Moving Away From Keck and Towards an (obstacle-based) Market access test?

The restrictions case-law

Commission v Italy (mopeds)[ 2 0 0 9 ] EC R I - 5 1 9 --> Measurewas an MEQR and was justified

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Aklagarenv . M ickelsson and Roos [ 2 0 0 9 ] EC R I -4 2 7 3

Jetskis could only be used in certain areas à question was whether the Swedish rule was an MEQR ànothing about how jet skis should be produced and nothing about the sellingarrangements regarding jet skis àit simply said how they couldn’t be used à court said it was an MEQR but could be justified ifcertain conditions could be satisfied Court seems to be broadening the scope of art 34 tocover measures that are equal burden measures

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Derogations under art 36 TFEU and Mandatory Requirements

Once it is decided that because it is either a QR or an MEQR, the next question is whether it is justified

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• We have two types of justification: ! The TreatyDerogations (Article 36 TFEU)! The mandatory requirements (recognised, for thefirst time, in Cassis de Dijon)

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Quantitativerestrictions and distinctly applicable MEQRs may be justified ONLY under theArticle 36 TFEU derogations

Indistinctly applicable MEQRs may be justifiedBOTH under the Article 36 TFEU derogations and the mandatory requirements

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When determining whether a measure is justified, it is not sufficient to point to a legitimate non-economic aim which is achieved through the measure. It must also be proved that the measure is PROPORTIONATE.

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In order for a national measure (a QR or anMEQR) to take precedence over the free movement of goods and thus not becomeinapplicable even though it imposes an obstacle to the free movement of goods,it must satisfy 3 requirements:

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! It must serve one (or more) of the important interests that are on the Article 36 TFEU list (e.g. public health or public morality) or (if applicable) a mandatory requirement

! It must be proportionate

! It must not constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States

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Article 36 Derogations

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Article 36 TFEU --> The provisions of Articles 34 and 35 shall notpreclude prohibitions or restrictions on imports, exports or goods in transitjustified on grounds of public morality, public policy or public security; theprotection of health and life of humans, animals or plants; the protection ofnational treasures possessing artistic, historic or archaeological value; orthe protection of industrial and commercial property.-text~ͳ

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POINTSTO REMEMBER:

• The Courthas interpreted Article 36 TFEU strictly

• The burden of proof is on the nationalauthorities to demonstrate that their measures are suitable and necessary togive effective protection to the interest(s) on which they rely from theArticle 36 list (Case C-17/93, OpenbaarMinisterie v. Van der Veldt, [1994] ECR I-3537).

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The derogations cannot be used to serve economic objectives: Case 7/61, Commission v. Italy (pork), [1961] ECR 317, at p. 329: Article 36 TFEU is “directed to eventualities of a non-economic kind”. Such objectives as the promotion of employment or investment, curbing inflation, and controlling the balance of payments fall outside Article 36 TFEU.

• The Article 36 TFEU list is EXHAUSTIVE and has never been amended since the original drafting of the EEC Treaty

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Proportionality

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The Court has long emphasised that the measurestaken by the Member States must not only genuinely serve the purpose for whichthey are intended but they must also be proportionate to the risk presented bythe import, with the burden of proving proportionality resting with thedefendant State.

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The principle of proportionality essentially includes two tests

• A test of suitability

• A test of necessity - One important part of the “necessity” limb is the question whether there are any other less restrictive means of producing the same result (the most usual example are cases involving a reliance on consumer protection where the Court says that a less restrictive alternative will be labelling

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The Article 36 TFEU list of derogations isEXHAUSTIVE:

! Public morality

! Public policy

! Public security

! Protection of health and life of humans, animalsor plants

! Protection of national treasures possessingartistic, historic or archaeological value

! Protection of industrial and commercial property

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PublicMorality

Case34/79, Henn and Darby, [1979] ECR3795, “it is for each Member State to determine inaccordance with its own scale of values and in the form selected by it therequirements of public morality in its territory” (para. 6).

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Conegate , [1986] ECR 1007 (“love-love dolls”) “However, although Community law leaves theMember States free to make their own assessments of the indecent or obscenecharacter of certain articles, it must be pointed out that the fact that goodscause offence cannot be regarded as sufficiently serious to justifyrestrictions on the free movement of goods where the Member State concerneddoes not adopt, with respect to the same goods manufactured or marketed withinits territory, penal measures or other serious and effective measures intendedto prevent the distribution of such goods in its territory” (para. 15).“It follows that a Member State may not rely ongrounds of public morality to prohibit the importation of goods from otherMember States when its legislation contains no prohibition on the manufactureor marketing of the same goods on its territory”. (para. 16)

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Conegate , [1986] ECR 1007

Supposed sex dolls imported from Germany and confiscated by customs à considered to be a ban on importing of these dolls à justified? à UK tried to rely on public morality as a justification à main question was whether this was a means of arbitrary discrimination or a disguised restriction on trade between MSs à court said it was a means of arbitrary discrimination because the UK allowed UK sex dolls

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The Mandatory Requirements

• Judge-made

• Themandatory requirements “list” is NOT EXHAUSTIVE

• As ageneral rule, mandatory requirementsapply only to indistinctly applicable measures. They cannot be used tojustify a QR or a distinctly applicable MEQR ( but there have been some exceptions – see, for instance,C-204-208/12, Essent Belgium ECLI:EU:C:2014:2192).

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• Mandatory requirements + harmonisation?

• Burden of proof?

• In order to be justified, the national policies must not pursue aims of a purely economic nature (Case C-254/98, TK-Heimdienst, [2000] ECR I-151)

• Proportionality

• The mandatory requirements as “compensation” given to Member States for the further intrusion of EC law into their regulatory autonomy as a result of the extension of the scope of Article 34 TFEU to catch indistinctly applicable rules

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The Court has recognised the following non-exhaustive list of mandatory requirements:

! Theeffectiveness of fiscal supervision (Cassisde Dijon (Case 120/78,)

! Thedefence of the consumer (Case C-315/92, Clinique,[1994] ECR I-317; Case C-470/93, Mars,[1995] ECR I-1923) - “the average consumer who is reasonably well-informed and reasonably observant and circumspect” ! Protectionof the environment (Case 302/86, Commissionv. Denmark, [1988] ECR 4607

! Protectionof cinema as a form of cultural expression (Case 60/84, Cinetheque, [1985] ECR 2605

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! Protection of national or regional socio-cultural characteristics (Case 145/88, Torfaen, [1989] ECR 3851

! Maintenance of press diversity (Case C-368/95, Familiapress, [1997] ECR I-3689)

! Preventing the risk of seriously undermining the financial balance of the social security system (Case C-120/95, Decker, [1998] ECR I-1831)

! Protection of fundamental rights (Case C-112/00, Schmidberger, [2003] ECR I-5659)

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In many (if not most) cases, the Court upholds the mandatory requirement but finds that the public interest invoked by the MS could be achieved in a way which has a less serious effect on trade (i.e. is not proportionate)

--> See, for instance, Case 261/81, Rau, [1982] ECR 3961

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Mandatory requirements and fundamental human rights:

a) If another mandatory requirement (e.g. consumer protection, the maintenance of press diversity) is invoked, then fundamental rights can be used to limit the scope of that justification -->Case C-368/95, Familiapress, [1997] ECR I-3689

b) Fundamental rights can be invoked defensively as a mandatory requirement to justify a restriction on trade Case C-112/00, Schmidberger, [2003] ECR I-5659