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Eu Law Free Movement Of Goods Essay Writer

Transcript of EU law - Free movement of goods problem question

This Prezi has been designed to give you guidance on how to answer a typical problem question on the free movement of goods. You should note however, that this is simply one approach of which many are valid.
EU law - answering problem questions on the free movement of goods
Introduction
Final Conclusion
Introductions in problem style questions should be kept to a minimum. The focus should be on addressing the issues raised and the examiner will not be looking to give credit for an over elaborate introduction. However, to simply launch into the issues without some reference to context would be wrong.
Identify the issues...
The Question
Bubbles is a UK manufacturer of shampoo selling throughout several Members States of the European Union. At present, the company does not sell their goods in Poland but has recently decided to concentrate on this untapped market. It has encountered a number of difficulties in doing so.

Firstly, Poland places a limit on the quantity of bathing products which may be imported. Also, Polish legislation for the protection of health requires all shampoos sold in Poland to have a safety cap. Bubbles does not currently use safety caps on their products and are unhappy with the Polish requirement which is not imposed by other Member States.

Furthermore, Bubbles has been informed that when its goods enter Poland, it will have to pay a 2.5 Zloty (about 50p) fee per bottle. Bubbles has been told that the charge is levied for the compilation of statistics.

Bubbles has been informed that because its products use a stick-on label, they will be taxed at a higher rate than those products that print directly onto the bottle. Although the company are aware of a recent report suggesting that stick-on labels have an adverse impact on the environment, it thinks it is a little suspect that none of Poland’s bathing product producers use stick-on labels.

Finally, Bubbles is dismayed to hear that there are restrictions on television advertising of all hair care products in Poland, following a recent incident where a child mistook shampoo for a drinking bottle and suffered serious illness as a consequence.

Advise Bubbles Ltd as to the impact of any relevant EU law.
The question we'll use is a typical undergraduate problem question on this area. This is a question that I drafted for an examination some time ago and incorporates many of the issues that you would expect to be addressed in such a question.
Thus, in a question such as this, attention should be drawn to the importance of the free movement of goods to the effective and successful operation of the internal market as one of the four fundamental freedoms. Reference should be made to Article 26 TFEU.
It is worth noting from the outset that a question such as this is very likely to have more than one issue concerning the free movement of goods.
...and then address those issues in turn
Bubbles
Quantity limit
Safety cap
Fee
Tax rate
Advertising restrictions
Identify potential barrier to trade with reference to and application of relevant Treaty Articles and case law.
Conclusion on this issue
Identify potential barrier to trade with reference to and application of relevant Treaty Articles and case law.
Distinctly or indistinctly applicable measure?


Consider Dir 70/50 - noting that this is was a transitional measure and therefore is no longer formally applicable (see Articles 2 and 3).
Applies equally to domestic and imported products - thus, indistinctly applicable.

Just like Walter Rau Lebensmittelwerke v de Smedt PvbA (Case 261/81) [1982] ECR 3961 – Belgian requirement that all margarine for sale should be in cube shaped form or cube shaped packaging. Problem was that importers would have to adapt their packaging processes to comply with a requirement not imposed upon them at home.
Now, consider whether there is any potential justification. As this is an indistinctly applicable MEQR, it can potentially be justified under Article 36 TFEU or Cassis de Dijon.

The obvious argument here is public health. As this falls within both, either may be used.

However, in either case, the principle of mutual recognition would need to be explained and applied -
where goods have been lawfully produced and marketed in one Member State, there is no reason why they should not be introduced into another Member State. Here, we know that it is only Poland that has the requirement.
Conclusion on this issue
Identify potential barrier to trade with reference to and application of relevant Treaty Articles and case law.
Charge for service rendered? State law and apply to facts
Then, question whether an argument can be sustained that the charge is for a service.

However, a charge for services rendered will fall outside the Article 30 TFEU prohibition only if: the service provided is of direct benefit to the importer and the charge is proportionate to the service provided.

Apply - here, as in Statistical Levy, the argument is likely to fail. Any benefit to the importer is too vague and uncertain. It should be noted that the argument rarely succeeds in practice.
Identify potential barrier to trade with reference to and application of relevant Treaty Articles and case law.
Directly or indirectly discriminatory – explain and apply to facts with reference to case law.
Indirectly discriminatory tax (Taxation which appears neutral, but has the effect of discriminating against imported products(see Humblot)), can be objectively justified.

Commission v Greece (Case C-132/88) – Court considered an environmental justification for a car tax system providing for differential rates according to power rating. Greece imposed a tax on new and second hand cars wherever they were produced and once over a 1.8 engine, the tax rose steeply. Greece didn’t produce cars above 1.6. Held it would escape Article 110 TFEU notwithstanding that all higher taxed cars were imported so long as the taxation didn’t have the effect of discouraging Greeks from purchasing foreign cars. On the facts the tax was motivated by other considerations and there was no discernable protective effect.

Apply - here we have an indirectly discriminatory tax which, it could be argued, could be objectively justified on environmental grounds.
Conclusion on this issue
Identify potential barrier to trade with reference to and application of relevant Treaty Articles and case law.
Distinctly or indistinctly applicable measure?

Consider Dir 70/50 - noting that this was a transitional measure and therefore is no longer formally applicable (see Articles 2 and 3).
Now, consider whether there is any potential justification.

Interestingly, because this measure concerns the way in which goods are sold rather than product characteristics, it would appear to be a 'selling arrangement'.

Thus, apply Keck conditions.
Thus, if the measure is to be justified, it must be done so with consideration and application of Article 36 TFEU and Cassis (remember - this is an indistinctly applicable MEQR).

Note, the question does not require you to repeat previously explained material. Thus, deal quickly with the issues - relevant ground (public health), rebuts presumption of mutual recognition, proportionality etc (see earlier in relation to the safety cap).
Cassis - Principle of mutual recognition and rule of reason – Apply
Article 36 TFEU - Apply
Proportionate response? State law and apply to facts
Conclusion on this issue
You've now dealt with all of the issues raised by the 'Bubbles' scenario.
Feeling good?
Excellent...however, we've not quite finished yet
Excellent, but we still need to pull the piece together
#EUlawrocks
Conclusion on this issue
This Prezi was created by Matthew J. Homewood,
Principal Lecturer in European Union law at
Nottingham Law School.

Feedback is very welcome.

@mjhomewood
matthew.homewood@ntu.ac.uk
Quantitative restrictions can be defined as‘.... measures which amount to a total or partial restraint of, according to the circumstances, imports, exports, or goods in transit’ - Geddo v Ente Nazionale Risi (Case 2/73)

Apply - here we have "a limit on the quantity of bathing products which may be imported". As such, it is a partial restraint of imports. It is a quantitative restriction.
Article 34 TFEU - Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.

Thus, this non-tariff barrier to trade is a breach of Article 34 TFEU.
Procureur du Roi v Dassonville (Case 8/74) [1974] ECR 837 – “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 restrictions”.

Apply - The requirement to have a safety cap will take time to comply with, will increase production costs and reduce competitiveness or profit margins. As a result, the measure is capable of hindering trade as these may deter Bubbles from entering the market.
Article 34 TFEU- Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.

Thus, this non-tariff barrier to trade on the form of a measure having equivalent effect to a quantitative restriction (MEQR) is a breach of Article 34 TFEU.
Now, the principle is rebuttable.by the mandatory requirements in Cassis or the list of justifications under Article 36 TFEU.

You then need to consider whether there is a real risk to public health and whether this is a proportionate response (using relevant authorities such as San Jose Scale and Walter Rau).


Finally, (and this very much links to whether a real risk exists and indeed, whether the response is proportionate) consider whether the measure merely amounts to arbitrary discrimination or a disguised restriction on trade. Again, use relevant case law (Poultry Meat for example).
Commission v Italy (Case 24/68) (Re Statistical Levy)
- “any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge having equivalent effect even if it is not imposed for the benefit of the State, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product.”

Apply - here we have a pecuniary charge (the 2.5 Zloty fee) which has been levied for the compilation of statistics. As such, it is not a clear duty because goods have crossed a frontier, but it does meet the definition of a charge having equivalent effect (CEE).
Article 30 TFEU - Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States.

Thus, this tariff barrier to trade is a breach of Article 30 TFEU.
Here we are dealing with a matter of internal taxation. A definition of a genuine tax was given by the Court of Justice in Commission v France (Reprographic Machines) (Case 90/79) as a measure relating to a general system of internal dues applied systematically to categories of products in accordance with objective criteria irrespective of the origin of the products.
Article 110 (1) TFEU
No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

Article 110 (2) TFEU
Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such nature as to afford indirect protection to other products.

Here, you need to consider which paragraph the measure falls into.
In John Walker v Ministeriet for Skatter (Case 243/84), the issue was whether Whisky and fruit liqueur wine were similar. It is obvious that they are both alcoholic drinks but the Court decided they were not similar because they had different characteristics. The process used to make them was different and they had significant differences in terms of alcohol content. Held that the term ‘similar products’ should be interpreted widely to encompass similar characteristics and comparable use.

Apply - On the facts there is nothing to suggest that the domestic and imported products are different in anyway and therefore it would be acceptable to assume that they have similar characteristics and comparable use.

As such, the tax is a breach of Article 110(1) TFEU.
Procureur du Roi v Dassonville (Case 8/74) [1974] ECR 837 – “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 restrictions”.

Apply - Advertising is a key component of market access. If this is restricted, Bubbles may not be willing to enter the market or in so doing, would be at a significant disadvantage to domestic producers.
Article 34 TFEU- Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.

Thus, this non-tariff barrier to trade in the form of a measure having equivalent effect to a quantitative restriction (MEQR) is a breach of Article 34 TFEU.
Applies equally to domestic and imported products. Thus, indistinctly applicable.

Just like Walter Rau Lebensmittelwerke v de Smedt PvbA (Case 261/81) [1982] ECR 3961 – Belgian requirement that all margarine for sale should be in cube shaped form or cube shaped packaging. Problem was that importers would have to adapt their packaging processes to comply with a requirement not imposed upon them at home.
Criminal Proceedings against Keck and Mithouard (Cases C-267 & 268/91)– Concerned a French law stating that goods could not be re-sold at a loss. This was an issue because it would affect the overall volume of sales and the sales of products from other Member States. However, the court said that certain selling arrangements do not fall within the Dassonville formula –


“...provided that those provisions apply to all affected traders operating within the national territory and provided they affect in the same manner, in law and in fact, the marketing of domestic products and of those from other Member States…”.
However, their are authorities recognising that advertising restrictions do not apply equally in law and in fact - Konsumentombudsmannen (KO) v De Agostini (Svenska) Forlag AB (Cases C-34-6/95) - Related to a ban on TV advertising at children under 12. Court found that where a producer is unable to advertise its product it may be prevented from accessing a market. The same restrictions may have less impact on domestic products as they will already be known. Thus, outside of Keck due to the discriminatory effect.

Apply - the restrictions on advertising would have an adverse impact upon Bubbles in comparison to domestic producers. As such, the measure would not satisfy the Keck conditions.
Now, you've already concluded each issue as you've dealt with it, so what's the point of a final conclusion?
This is your opportunity to conclude your answer by pulling together the individual issue conclusions. In so doing, you neatly finish the piece and provide the examiner with a clear and concise summary of where your legal arguments have taken you.
...and that's all there is to it!
Consideration might at this point be given to whether the measure could be justified.

The only means by which quantitative restrictions can potentially be justified is under Article 36 TFEU.

However, given that there is nothing on the facts to suggest a potential justification, this should be dismissed swiftly as the available time is needed to concentrate on issues actually raised by the question.
.
Be confident in exercising your academic judgment in this regard. The very best answers don't waste valuable time or words on non-issues.

Full transcript

dr. Agne Limante 

MA candidate in EU Law, King’s College London; PhD in EU law, Vilnius University; Post-Graduate Diploma in EU Law, King’s College London

 

When in November 1993 the CJEU presented its ruling in Keck case[i], seeking, inter alia, ‘to clarify the law’, academic society reacted to it with a plethora of studies on how to ‘clarify the clarification’[ii]. In that ruling the Court held that French rules prohibiting reselling at loss were not caught by Article 34 TFEU since they related merely to indistinctly applicable ‘selling arrangements’ having no adequate effect on intra-EU trade.

It was clear that the judgement signalled contradiction in the scope of application of EU rules on free movement of goods. As noted by prof. Weatherill, Keck was doubtless intended to empower national courts to dismiss far-fetched attempts to deploy internal market law which was clogging up the EU judicial system with the minutiae of purely local affairs[iii]. However, the borders of such limitation and its content remain blurred until today.

The analysis below will re-think Keck from the position of market access test. It firstly shortly examine the nature of ‘selling arrangements’ introduced by Keck, and later will turn to the discussion on the market access test as an alternative approach to Keck.

Restrictive measures falling under Keck

According to the settled case-law, all trading rules enacted by the Member States which are capable of hindering, directly or indirectly, actually or potentially, trade within the EU are to be considered as measures having an effect equivalent to quantitative restrictions and are, on that basis, prohibited by Article 34 TFEU[iv]. However, according to Keck, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements, within the Member State of importation, is not such as to hinder trade between Member States so long as, first, those provisions apply to all relevant traders operating within the national territory and, secondly, they affect in the same manner, in law and in fact, the marketing of domestic products and those from other Member States.

Following the above, while retaining the prohibition of hindrance to market access set in Dassonvilleand the general non-discrimination requirement, Keck made a distinction between:

(i)    ‘rules that lay down requirements to be met by goods’, related to inherent characteristics of products, and per se are considered to fall under Article 34 TFEU;

(ii)  ‘selling arrangements’, regulating questions extrinsic to goods. They are covered by Article 34 TFEU only if they discriminate against imports;

(iii) ‘residual rules’, as a separate group named in subsequent case-law and doctrine. They fall under Dassonville as affecting intra-EU trade.

Identifying selling arrangements, however,appeared to be a puzzle. Although they seem to cover restrictions on when[v], where and by whom[vi] the goods may be sold, as well as advertising restrictions[vii] and price controls[viii], these general elements hardly allow predicting outcomes in individual cases.

It should also be noted that during last decades the Court increasingly adopted a broad interpretation of indirect discrimination bringing the rules on marketing within the scope of Article 34 TFEU. Indeed, as stated by prof. Spaventa, aside from Sunday-trading type of rules, during the period of 1997-2008, there were only two cases – Burmanjer and A-Punkt – where selling arrangements were found to be non-discriminatory and thus fell outside the scope of Article 34 TFEU[ix].

Market access test as an alternative to Keck

Since Keck received a lot of criticism, there were considerable attemps to reformulate it and to suggest alternatives. The majority suggested market access test to be the panacea.

As  Oliver and Enchelmaier[x] note the most authoritative assault ever mounted against the reasoning in Keck was that of AG Jacobs in Leclerc-Siplec[xi]. He considered that it was inappropriate to make such a rigid distinction between “rules that lay down requirements to be met by goods” and ‘selling arrangements’, and that the test of equality is not in line with the objectives of the Treaty[xii], namely, the establishment of a single market. At the same time AG Jacobs suggested a test aimed at checking whether a measure exerts a substantial restriction on the market access[xiii]. Since Leclerc-Siplec related to partial ban on advertisement (TV advertising), he came to a conclusion that this did not amount to substantial restriction of the market access. However, he also offered an example of direct TV marketing: here prohibition of TV advertising would mean substantial restriction. Comparably, in his opinion in Alpine Investments[xiv] dealing with restriction on ‘cold calling’ potential clients offering financial services, AG Jacobs argued that a question whether a national rule restricts freedom to provide services “should be determined by reference to a functional criterion, that is to say, whether it substantially impedes the ability <…> to provide services”.

Prof. Weatherill[xv] chose another direction stating that prohibition to resale at loss in Keck escaped Article 34 TFEU not because these were rules affecting selling arrangements applied equally in law and in fact, but because they were measures applying equally in law and in fact and exercising no direct impediment to access to market of a Member State. There was no obstruction to the realization of economies of scale and wider consumer choice. Going further, prof. Weatherill also sugests refining Keck test along the following wording: measures introduced by a Member State which apply equally in law and in fact to all goods or services without reference to origin and which impose no direct or substantial hidrance to the access of imported goods or services to the market of that Member State escape the scope of application of Articles 34 and 66 TFEU. Following such suggestion, complete bans on sale of goods or services (as in Schindler[xvi]), even if equally applied, would still have to be justified for having direct and substantial hidrance to market access.

AG Maduro in Alfa Vita[xvii] also stressed market access. He brought to the attention three criteria to be used when deciding on application of Article 34 TFEU. First, discrimination based on nationality must be prohibited. Second, the imposition of supplementary costs on cross-border activity has to be justified. Lastly, the measure will be a hidrance to market access if it impedes to a greater extent access to the market and putting into circulation of products from other Member States than trade on national market.

However, other authors do not see much use in notions such as ‘substantial barrier’ or in introducing other types of treshold. They claim that this would introduce an unwanted de minimis test, while ‘barrier to market access’ criterion is inherently nebulous[xviii]. Even if it is possible to distinguish restrictive rules that have minor effects on intra-EU trade, such as ‘modest effect on sales’,‘purely hypothetical and totally uncertain and indirect effect on market access’[xix], a large grey area is left between ‘minor’ and ‘substantial’.

Use restrictions, Keck and market access

Following Moped trailers[xx] and Mickelsson & Roos[xxi], the contours of Keck seem even more blurred and, again, subject to various interpretations. Both cases were related to the limits of market access and restriction of use – prohibition of towing the motor trailers and prohibition on use of personal watercrafts respectively.

These cases reveal the complexity of the question. AG Bot in Moped trailers case argued that the extension of Keck to measures regulating the use of goods would run against the aims of the internal market. AG Kokot, on the opposite, in Mickelsson & Roos suggested to extend Keck criteria to the use arrangements due to comparable characteristics.

In Moped trailers CJEU re-defined the notion of barriers to intra-EU trade underlining the market access. It stated that “any other measure which hinders access of products originating in other Member States to the market of a Member State is also covered by the [measures having equivalent effect] concept“. The Court reaffirmed this market access formula in Mickelsson & Roos.

Some authors guessed that with this case law the Keck selling arrangements doctrine might have been consigned to history books: though the Court did not openly overrule Keck, the market access formula might suggest, in fact if not in law, the end of the Keck dichotomy[xxii]. The Court made clear that any measure which may impede access to the market falls under Article 34 TFEU. Although distinguishing product-related rules remains necessary, delimitation of selling arrangements looses significance.

It is, however, a bit suprising that the suggested test established no type of threshold or qualifiers to be met by national measure. On the other hand, as noted by prof. Snell, the CJEU seems to focus on the significance of the impact of the measure with all the uncertainties this approach entails, though at the same time refusing to clearly state that rules with insignificant effect fall outside the Treaty[xxiii].

Concluding remarks

Looking from the other side, confronting Keck and market access test, we might be looking for opposition where it does not exist. Keck is about market access. As stated by Wenneras & Boe[xxiv], the CJEU in Moped trailers and Mickelsson & Roos has just consolidated and clarified what was implicit in Keck, namely that Article 34 TFEU prohibits measures that discriminatorily, in law or in fact, restrict market acess for imported products or which prevent/hinder market access.

Nevertheless, it is often hard to identify, which of the elements plays the decisive role in CJEU judgements – market access, discrimination and protectionism, economic freedom. One can have an impression that those tests remain elusive and are often used in an intuitive way, after firstly looking whether discrimination could be established, having in mind the possible justification in certain case and combining this intuition with the general feeling of what is reasonable and logical.

 


[i] Joined Cases C-267/91 and C-268/91 Keck and Mithouard [1993] ECR I‑6097.

[ii] Weatherill. After Keck: Some thoughts on how to clarify the clarification. (1996) 33 CMLRev, p. 885-906.

[iv] Case 8/74 Dassonville [1974] ECR 837.

[v] Case C-401/92 and C-402/92 Tankstation ’t Heukskeand Boermans [1994] ECR I-2199, Case C-69/93 and C-258/93 Punto Casa and PPV [1994] ECR I‑2355.

[vi] Case C-391/92 Commission v Greece [1995] ECR I‑1621, Case C-387/93 Banchero [1993] ECR I-1085. It is worth noting, that restrictions related to where the product might be sold are captured by selling arrangements if they relate to restrictions on physical location of selling place (pharmacy-shop-district). Selling by internet is given a different treatment. In DocMorris (C-322/01, [2003] ECR I-14887), case concerning prohibition of selling medicines by virtual pharmacies, the CJEU hold the restriction to be de facto discrimination against imports. Internet provided a “more significant way” to market access for sellers established in other Member States.

[vii] Case C-292/92 Hünermund and Others [1993] ECR I-6787; Case C-412/93 Leclerc-Siplec [1995] ECR I-179; Cases C-34/95 to C-36/95 De Agostini [1997] ECR I-3843, Case C-405/98 Gourmet [2001] ECR I-1795. However, often advertising restrictions might have discriminatory aspect. As AG Jacobs insisted in Leclerc-Siplec, “measures that prohibit or severely restrict advertising tend inevitably to protect domestic manufacturers and to disadvantage manufacturers located in other Member States“.

[viii] Case C-63/94 Belgapom [1995] ECR I-2467.

[ix] Spaventa. Leaving Keck behind? The free movement of goods after the rulings in Commission v. Italy and. Mickelsson and Roos. (2009) 34 ELRev. 914-932.

[x] Oliver & Enchelmaier. Free Movement of Goods: Recent Developments in the Case Law. (2007) 44 CMLRev. 649–704.

[xi] Case C-412/93 Leclerc-Siplec [1995] ECR I-179.

[xii] In AG Jacobs words: “If an obstacle to inter-State trade exists, it cannot cease to exist simply because an identical obstacle affects domestic trade”.

[xiii] It is interesting to note, that AG Jacobs in general tends to analyse measures in the light of the scope of their effect. Criticizing locus standi in annulment actions (UPA case), he also suggested a test of “substantial negative effect” for interpretation of individual concern.

[xiv] Case C-384/93 Alpine Investments [1995] ECR I-1141.

[xv] Weatherill. After Keck: Some thoughts on how to clarify the clarification. (1996) 33 CMLRev, p. 885-906.

[xvi] Case C-275/92 Schindler [1994] ECR I‑1039.

[xvii] Joined Cases C-158/04 and C-159/04 Alfa Vita [2006] ECR I‑8135.

[xviii] Oliver & Enchelmaier. Free Movement of Goods: Recent Developments in the Case Law. (2007) 44 CMLRev. 649–704.

[xix] Joined Cases C-418/93, etc Semeraro Casa Uno [1996] ECR I‑2975.

[xx] Case C‑110/05 Commission v Italy [2009] ECR I‑519.

[xxi] Case C‑142/05 Mickelsson and Roos [2009] ECR I‑4273.

[xxii] Spaventa. Leaving Keck behind? The free movement of goods after the rulings in Commission v. Italy and. Mickelsson and Roos. (2009) 34 ELRev. 914-932.

[xxiii] Snell, The Notion of Market Access: A Concept or a Slogan? (2010) 47 CMLRev, p. 437-472.

[xxiv] Wenneras & Boe Moen. Selling arrangements, Keeping Keck. (2010) 35 ELRev. 387 -400.

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