Coursework on European law |

Coursework on European law

Question:
Claude owns a bakery in Belgium, located near the French border. He wishes to import dried apricots from Turkey for a new range of buns but is being charged 3 euros per box at the border. A friend who owns a bakery in Germany tells him that he is only charged 2 euros when he imports the same dried apricots.

He also imports coarse stoneground flour from Ireland but has just been informed that there may be a problem with tiny insects, known as weevils, getting into the flour at the mills. As a precaution the Belgian authorities have decided to start inspecting the flour at the port of Ostend where it arrives, and Claude will be charged 10 euros per tonne for the inspection. As these inspections may take up to a week (the insects being particularly small and hard to detect), he will have to store the flour sacks in a warehouse in Ostend, at a charge of 5 euros per tonne per night.

A group of militant French bakers, angry at the increasing volume of imported bakery products being sold in French shops, has launched a campaign of �direct action�. The group recently halted one of Claude�s vans in France and threw its entire load into a nearby river. French police officers who witnessed the event refused to intervene or to arrest any of those involved. The French police have since issued a statement saying that intervention would have provoked an escalation of the violence and led to increased damage to property.

Claude�s �Belgian Buns� are one of his most popular lines with French consumers, but he believes that the volume of buns he can export to France is limited because of a French rule requiring bakeries to close between 1pm and 4pm.

After much thought, Claude has decided to buy a small specialist chocolate business in the neighbouring town. As Belgian chocolates have an excellent reputation as luxury goods, he designs and pays for an advertising campaign with the theme �Belgian chocolates are real chocolates�. His local Chamber of Commerce (run by the Mayor of the town) approves of the campaign and has paid for the newspaper advertisements.

Advise Claude as to the legal issues raised in each of the five paragraphs.

Please , please read the following notes and example . please use cases

FREE MOVEMENT OF GOODS

Internal Market Art 28(1) TFEU: maintenance of �a customs union which shall cover all trade in goods and which shall involve the prohibition between Members 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�.
Financial Barriers to Trade

Art 30 TFEU (was Art 25 EC):
�Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.�
26/62 Van Gend en Loos [1963] ECR 1
The meaning of �goods�
7/68 Commission v Italy (Art Treasures) [1968] ECR 423
��products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions��
C-97/98 J�gerski�ld v Gustafsson [1999] ECR I-7319
Goods from third countries:
Art 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�have been levied in that Member State��
The effect, not the purpose
7/68 Commission v Italy (Art Treasures) ) [1968] ECR 423
Fairhurst, p563: �In rejecting the Italian argument, and confirming that the reason for the charge is irrelevant, the Court has made a significant impact on removing the financial frontiers which could otherwise have remained in a disguised form and thus impacted upon the free movement of goods.�
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
The Court said:
�The justification for this prohibition is based on the fact that any pecuniary charge, however small, imposed on goods by reason of the fact that they cross a frontier constitutes an obstacle to the movement of such goods.�
2 and 3/69 Sociaal Fonds voor de Diamantarbeiders [1969] ECR 211

Charges having an equivalent effect to a customs duty (CHEEs)
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
The Court said:
��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 within the meaning � [of Articles 28 and 30 TFEU], 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.� It also said that the prohibition ��constitutes a fundamental rule which�does not permit of any exceptions�.
The exceptions
18/87 Commission v Germany (Live Animal Imports) [1988] ECR 5427
– payment for a service rendered to the trader at his request;
– payment for an inspection carried out to fulfil obligations under EU law;
– a charge that relates to a general system of internal dues applied under Art 110 TFEU (see below).
132/82 Commission v Belgium (Public Warehouses) [1983] ECR 1649
170/88 Ford Espa�a v Spain [1989] ECR 2305
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
87/75 Bresciani [1976] ECR 129
46/76 Bauhuis v Netherlands [1977] ECR 5
The Court said that fees could only be charged for inspections if:
– the inspections are obligatory and uniform for all such products across the EU;
– they are required by EU law;
– the charge is at actual cost;
– they promote free movement of goods by replacing possible unilateral measures permitted under Art 36 TFEU (see below)
89/76 Commission v Netherlands (International Plant Protection Convention) [1977] ECR 1355.

Internal Taxation Art 110 TFEU
Art 110 TFEU (was Art 90 EC):
�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.
Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.�
(Following 57/65 Alfons L�tticke [1966] ECR 205 this Article is directly effective.)
(a) Art 110(1) Similar products

168/78 Commission v France (Tax on Spirits) [1980] ECR 347

243/84 John Walker v Ministeriet for Skatter [1986] ECR 875

184/85 Commission v Italy (Bananas) ) [1987] ECR 4157
(27/76 United Brands [1978] ECR 207)

57/65 Alfons L�tticke [1966] ECR 205

112/84 Humblot [1985] ECR 1367

(b) Art 110(2) Protective effect

170/78 Commission v UK (Excise Duties on Wine) [1983] ECR 2263

184/85 Commission v Italy (Bananas) [1987] ECR 4157

NB 193/85 Co-operativa Cofrutta [1987] ECR 2085
Non-financial Barriers to Trade
Art 34 TFEU (was Art 28 EC):
‘Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.’

Actions by the state and actions by individuals
249/81 Commission v Ireland (Buy Irish) [1982] ECR 4005
222/82 Apple and Pear Development Council [1983] ECR 4083
Failure to act by the state
C-265/95 Commission v France (French Farmers’ Blockades) [1997] ECR I-6959

Derogations and defences to Art 34 TFEU
These may be found in Art 36 TFEU and also in Cassis de Dijon.
For Distinctly Applicable Measures – use Art 36 ONLY
For Indistinctly Applicable Measures – use Art 36 AND Cassis
113/80 Commission v Ireland (Irish Souvenirs) [1981] ECR 1625
Art 36 TFEU (was Art 30 EC):
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 and 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.

C-1/96 R v MAFF ex parte Compassion in World Farming [1998] ECR I-1251
174/82 Officier van Justitie v Sandoz [1983] ECR 2445
C-24/00 Commission v France [2004] ECR I-1277 at para 67
Public morality
34/79 R v Henn and Darby [1979] ECR 3795
121/85 Conegate Ltd v HM Customs and Excise [1986] ECR 1007
(115-116/81 Adoui and Cornuaille v Belgium [1982] ECR 1665)
Public policy and public security
C-265/95 Commission v France (French Farmers’ Blockades) [1997] ECR I-6959
72/83 Campus Oil [1983] ECR 2727
Public health
40/82 Commission v UK (Turkeys/Imports of Poultry Meat/Newcastle Disease)
124/81 Commission v UK (UHT Milk) [1983] ECR 203
174/82 Officier van Justitie v Sandoz [1983] ECR 2445
Protection of national treasures
Compare 7/68 Commission v Italy (Art Treasures) [1968] ECR 423
Directive 93/7/EC the export of cultural property,
Regulation 3911/92/EEC export of cultural goods to third countries.

Protection of industrial and commercial property
C-92/92 Collins v Imtrat [1993] ECR I-5145
C-388/95 Belgium v Spain (Rioja wine exports) [2000] ECR I-3123
Cassis de Dijon and the Cassis rule of reason
120/78 (Cassis de Dijon) Rewe-Zentrale AG v Bundesmonopolverwaltung fur Branntwein [1979] ECR 649
The �rule of reason� or �mandatory requirements defence�.
"Obstacles to movement within the [Union] resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer."
Public health
178/84 Commission v Germany (Beer Purity Laws) [1987] ECR 1227
95/01 Greenham v Abel [2004] ECR I-413
Consumer protection
178/84 Commission v Germany (Beer Purity Laws) [1987] ECR 1227
C-46/93 Brasserie du Pecheur [1996] ECR I-1029
Other cases �resulting� in labelling
286/86 Minist�re Public v Deserbais [1988] ECR 4907
C12- and C14-00 Commission v Spain and Commission v Italy [2003] ECRI-788/79
Italian State v Gilli and Andres [1980] ECR 2071
261/81 Walter Rau v de Smedt [1982] ECR 3961

Other mandatory requirements

(a) Protection of the environment
302/86 Commission v Denmark (Returnable bottles) [1988] ECR 4607
C-320/03 Commission v Austria (Transport on the A12 motorway) [2005] ECR 9871
(b) Protection of culture
60-61/84 Cin�th�que [1985] ECR 2605
379/87 Groener [1989] ECR 3967
(c) Diversity of the press
C-368/95 Familiapress [1997] ECR I-3689
(d) Social-cultural characteristics
145/88 Torfaen Borough Council v B&Q [1989] ECR 3851
The Keck judgment
C-267, 268/91 Keck and Mithouard [1993] ECR I-6097
"In view of the increasing tendency of traders to invoke…[Art 34] as a means of challenging any rules whose effect is to limit 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."…
"However, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgement…provided that those provisions apply to all affected traders operating within the national territory and provided that they affect in the same manner, in law and fact, the marketing of domestic products and those from other Member States."
C-401,402/92 Tankstation [1994] ECR I-2199
C-292/92 H�ndermund [1993] ECR I-6787
C-412/93 Leclerc-Siplec [1995] ECR I-179
C-470/93 Mars [1995] ECR I-1923
C-368/95 Familiapresse [1997] ECR I-3689
C-405/98 Gourmet International Products [2001] ECR I-1795
FREE MOVEMENT OF GOODS

Internal Market Art 28(1) TFEU maintenance of �a customs union which shall cover all trade in goods and which shall involve the prohibition between Members 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�.
So it is an internal free trade area along with a common external tariff. Once goods from third countries are in the EU and have paid the appropriate external tariff (CCT) they are in �free circulation� and must be treated like any other goods produced within the EU (Art 28(2) TFEU).
Customs duties are long gone as well as border controls, although various border formalities can still be necessary. Still many invisible barriers e.g. different product standards and many national measures aimed at consumer and environmental protection. While many are valid and well-intentioned, they can also be misused to give the domestic product an unfair competitive advantage. The Commission and the ECJ are aware and alert to problematic national measures and many of the cases we�ll be looking at involve measures that, accidentally or deliberately, have an adverse effect on trade.
Work is continuing on harmonising measures that will allow acceptable product and other standards across the EU but it�s a massive task and until then producers are reliant on various legal procedures that will allow for scrutiny of a particular national measure. (One of these is the Enforcement Procedure (Arts 268-270 TFEU) and these cases can easily be identified as �Commission v State X�.)
We will look at this topic under two headings:
– Financial Barriers to Trade;
– Non-financial Barriers to Trade.
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Financial Barriers to Trade
Art 30 TFEU (was Art 25 EC):
�Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature.�
26/62 Van Gend en Loos [1963] ECR 1
This case establishes that Art 12 EEC (the original version of this Article) is directly effective.
The meaning of �goods�
7/68 Commission v Italy (Art Treasures) [1968] ECR 423
Tax imposed on export of items of an �artistic, historical, archaeological or ethnographic nature�. Italy claimed that such items were �cultural articles� and not �goods� in the generally accepted commercial sense. The Court decided that �goods�, in the context of the Article, meant �products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions�. (The Italian tax itself was proportionate to the value of the items.)
C-97/98 J�gerski�ld v Gustafsson [1999] ECR I-7319
A case about the right of a fishing licence holder to fish in private waters. One argument made by the claimant was that the fishing licence somehow breached Art 30 TFEU, so the question was whether the licence came under the heading of �goods�. The Court disagreed and said that even though proof of the licence was evidenced by a piece of paper, for which money had been paid, the licence was effectively a �service�, not a �good�. It drew a distinction between an �intangible� benefit, such as a licence, and a �tangible� good, such as a can of Coke.
Goods from third countries:
Art 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�have been levied in that Member State��

The effect, not the purpose
7/68 Commission v Italy (Art Treasures) ) [1968] ECR 423
See above. Italy also argued that the purpose of the tax was to protect the artistic heritage of the country and that it made only an insignificant contribution to the state�s budget. The Court again took a strict approach and declared that the purpose of the charge was irrelevant � the important point was that it raised the price of the exported article and hence had a restrictive effect on the export trade in the goods.
Fairhurst, p563: �In rejecting the Italian argument, and confirming that the reason for the charge is irrelevant, the Court has made a significant impact on removing the financial frontiers which could otherwise have remained in a disguised form and thus impacted upon the free movement of goods.�
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
Italy imposed a levy on exports to other MS to pay for the collection of statistical data on trade patterns, claiming that these data were useful both to MS and also to the exporters. The Court said: �The justification for this prohibition is based on the fact that any pecuniary charge, however small, imposed on goods by reason of the fact that they cross a frontier constitutes an obstacle to the movement of such goods.� It also referred to �the general and absolute nature of the prohibition�.
2 and 3/69 Sociaal Fonds voor de Diamantarbeiders [1969] ECR 211
A small levy imposed on imported diamonds was found to be in breach of Art 30 TFEU even though it had no protectionist purpose (Belgium does not produce raw diamonds!) and was intended to provide social security benefits for workers in the diamond cutting profession.

Charges having an equivalent effect to a customs duty (CHEEs)
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
See above. The Court said: ��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 within the meaning � [of Articles 28 and 30 TFEU], 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.� It also said that the prohibition ��constitutes a fundamental rule which�does not permit of any exceptions�.
The exceptions
18/87 Commission v Germany (Live Animal Imports) [1988] ECR 5427
Fees were charged for the import of live animals into Germany to cover the cost of inspections required under an EU Directive. Were such charges prohibited as CHEEs? The Court took the opportunity to sum up some previous case law (discussed below) and set out a short list of accepted charges that would not fall foul of Art 30 TFEU:
– payment for a service rendered to the trader at his request;
– payment for an inspection carried out to fulfil obligations under EU law;
– a charge that relates to a general system of internal dues applied under Art 110 TFEU (see below).
Looking at the individual precedents for the first two exceptions:

132/82 Commission v Belgium (Public Warehouses) [1983] ECR 1649
Customs clearance may be undertaken at public warehouses within a MS instead of at the border. Belgium was charging for temporary storage of goods at these facilities at the request of the trader. Charges were also levied on traders even when storage was not needed. The Court accepted that a charge could be made for the storage provided it was at the direct request of the trader and not imposed on him. However, the charge had to be �commensurate with that service�, i.e. at the actual cost, and those traders who did not request storage could not be charged at all.
170/88 Ford Espa�a v Spain [1989] ECR 2305
The charge, which was itself legal, could not be a percentage of the declared value of the imported goods but had to be the actual cost of the service rendered.
24/68 Commission v Italy (Statistical Levy) [1969] ECR 193
See above. Even though it was argued that the statistical data was of value to traders, it was not provided at their request and was ��an advantage so general, and so difficult to assess�� that it could not be said to be a specific benefit to them. Consequently no charge could be levied.
87/75 Bresciani [1976] ECR 129
Italy levied a charge for compulsory veterinary and public health inspections on the import of raw cowhides. Even though a good case could be made for the inspections themselves (see below re Arts 34 and 36), the question was whether the trader could be charged for them. Could they be considered as a service to the trader? The Court said: �The activity of the administration of the State intended to maintain and public health inspection system imposed in the general interest cannot be regarded as a service rendered to the importer such as to justify the imposition of a pecuniary charge. If, accordingly, public health inspections are still justified at the end of the transitional period, the costs which they occasion must be met by the general public which, as a whole, benefits from the free movement of [Union] goods.� The service was not to the trader but to the general public, and the general public should therefore bear the cost.
46/76 Bauhuis v Netherlands [1977] ECR 5
Fees were charged for veterinary inspections of pigs imported to the Netherlands. The Court said that fees could only be charged for inspections if:
– the inspections are obligatory and uniform for all such products across the EU;
– they are required by EU law;
– the charge is at actual cost;
– they promote free movement of goods by replacing possible unilateral measures permitted under Art 36 TFEU (see below)
(The second and third of these are the most important.) Note also that inspections required under an international treaty to which MS were party could also be charged for under the Bauhuis conditions, see 89/76 Commission v Netherlands (International Plant Protection Convention) [1977] ECR 1355.
Internal Taxation Art 110 TFEU
Harmonisation of internal taxation may only come about by legislation adopted by the Council acting unanimously so there has been little movement in this area of EU law. Consequently each MS sets its own tax levels and opportunities would appear to exist for discriminatory tax levels on goods imported from other MS. Art 110 is intended to take care of this. Whereas Art 30 is concerned with charges on goods because they cross a frontier, Art 110 covers charges imposed within a MS�s territory that nonetheless may have the effect of making the imported product more expensive than the domestic equivalent. The Article must guarantee the �complete neutrality� of internal taxation as regards competition between domestic and imported products.
Art 110 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.
Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products.�
(Following 57/65 Alfons L�tticke [1966] ECR 205 this Article is directly effective.)
Note that this Article has two paragraphs. Art 110(1) concentrates on the taxing of the same or similar products in a different way. Art 110(2) looks at the taxing of differing but competing products in such a way that the domestic product is protected.
(c) Art 110(1) Similar products

168/78 Commission v France (Tax on Spirits) [1980] ECR 347

France had higher tax rates for spirits based on grain (e.g. whisky, vodka) than those based on wine or fruit (e.g. cognac, calvados). France produces very little grain-based spirits but is well known for its cognac and other wine or fruit based spirits. In considering whether the products were sufficiently similar to come under this Article, the Court decided that they would have to �have similar characteristics and meet the same needs from the point of view of consumers�. Such a definition could be applied to all types of spirits covered by the two tax rates.

243/84 John Walker v Ministeriet for Skatter [1986] ECR 875

Compare with the above case. The two sets of products here were liqueur fruit wine (e.g. cassis) and whisky. The Court looked at the alcoholic content, method of production and consumer perceptions and held that they were not similar.
184/85 Commission v Italy (Bananas) ) [1987] ECR 4157

Italy levied a heavy consumption tax on bananas which was not levied on other fruit. Italy produced almost no bananas, importing them from France, but was a major producer of most other fruit. The Court looked at the �objective characteristics� of bananas and decided that they were not similar to other fruit. The case then went on to look at Art 110(2) see below. (NB The case 27/76 United Brands [1978] ECR 207 also compared bananas to other fruit but in the context of Art 102 TFEU. See eventually your notes on Competition Law.)

Direct discrimination is easy to spot and correspondingly now very rare.

57/65 Alfons L�tticke [1966] ECR 205

An internal tax was levied on imported dried milk but not on the domestic equivalent. It was directly discriminatory and breached the Article.

Indirect discrimination is more difficult; it may not differentiate between products at first sight, but may in effect be more onerous on the import.

112/84 Humblot [1985] ECR 1367

France had two different types of annual car tax, depending on the power rating of the car. This rating was arrived at by a complicated calculation, but came out in �fiscal horsepower� or CV. (Remember the old 2CV cars?) Up to 16 CV the tax increased pro rata up to a maximum of 1,100 francs. Above 16 CV there was a flat rate tax of 5,000 francs. It just so happened that no car produced in France had a CV above 16, and only imported cars would attract the 5,000 franc tax. Did the French tax system discriminate indirectly against imported cars? The Court said that even though the system appeared to make no formal distinction between imported and domestic, �it manifestly exhibits discriminatory or protective features�. They pointed out the significant jump in the tax rate found at the 16 CV level, and said that the discrimination was made even worse by the fact that this was an car tax paid every year, not just on purchase.

(d) Art 110(2) Protective effect

170/78 Commission v UK (Excise Duties on Wine) [1983] ECR 2263

The tax levied by the UK on certain wines was about five times that levied on beer by volume. (38% of the sale price of wine compared to 25% for beer.) At the time the UK produced very little wine but vast quantities of beer. It was quickly established that the products could not be considered similar, but was the tax on wine (mostly imported) protecting the domestic product, beer?

Considerable research was undertaken by the Court, including consumer habits and the �substitutability� of the two products � although they made special note that such habits could and would change over time and it was important that any tax policy of a MS should not affect those natural changes. (And they also noted that such research should not be confined to the practices of a single MS.) As a result they chose to look at the competitive relationship between the lightest and cheapest wines as compared with beer. They said that �the effect of the UK tax system [was] to stamp wine with the hallmarks of a luxury product�, thus reducing its appeal to the consumer as a genuine alternative to the domestically produced beer.

184/85 Commission v Italy (Bananas) [1987] ECR 4157

See above. The Court did come to the conclusion that the banana tax had a protective effect on the other domestically produced fruit. Although they were not sufficiently �similar� they were still in broadly the same consumer market. It was �clear evidence of protectionism�.

NB 193/85 Co-operativa Cofrutta [1987] ECR 2085

A preliminary reference case (Art 267 TFEU) on the same point and judgment given on the same day. Some textbooks will refer to this instead of 184/85.

Non-financial Barriers to Trade

‘Non-financial barriers’ covers all other impediments to trade that do not involve money being paid to the state in one form or another. The two relevant Treaty articles are Arts 34 and 36 TFEU. (Art 35 TFEU is similar to Art 35 but covers exports.)
Art 34 TFEU (was Art 28 EC):
‘Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.’

Unlike Art 30 (financial barriers), it is possible for a MS to impose limited restrictions on trade that would breach Art 34 provided that they can be justified either under Art 36 or under the Cassis rule of reason (see below). Please note – you cannot use Art 36 or Cassis to justify the imposition of a financial charge.
The intention of this legislative framework is to balance the goal of a free and competitive market in goods across the EU with the genuine need, in limited circumstances, to protect essential public interests such as the protection of public health, the environment and consumer rights. Arts 34 and 35 are directly effective and any state measure that breaches them could give rise to state liability and the payment of damages, provided that the conditions set out in C-46/93 Brasserie de Pecheur and C-48-93 Factortame III are fulfilled.
Just as with Art 30, Art 34 bans not just quantitative restrictions themselves, but all measures having equivalent effect (often abbreviated to MEQR or MHEE), and the Article also applies to goods of non-EU origin which are now in free circulation within the EU, having fulfilled the CCT requirements.
The definition of ‘goods’ for the purposes of Arts 34-36 is similar to that for Art 30 and even includes generated electricity. An exception is coins, banknotes or bearer cheques, because they come under the rules on transfer of capital (Art 63 TFEU) but old gold coins that were no longer in circulation and were collectors’ items did count as ‘goods’.
Actions by the state and actions by individuals
Art 34 is directed at actions by the state and cannot be applied directly to actions by individuals or companies, however large that company may be.
249/81 Commission v Ireland (Buy Irish) [1982] ECR 4005
In 1978 the Irish government introduced a three-year campaign to promote Irish goods within the country. It was launched by the appropriate Irish Minister and consisted of the introduction of a ‘Buy Irish’ symbol for goods made there and a publicity campaign by a newly established Irish Goods Council, designed to encourage Irish citizens to buy Irish goods. The members of the IGC were appointed by the Irish Government and it was funded 6:1 by the state. An enforcement action was brought by the Commission under what is now Art 34 TFEU. The Irish government tried to distance itself from the IGC but its initiative and organisational and financial involvement was clearly sufficient to bring it under the scope of Art 34. The Court responded that, "even measures adopted by the government of a Member State which do not have finding effect may be capable of influencing the conduct of traders and consumers in that state and thus of frustrating the aims of the Community [i.e. Union]"

222/82 Apple and Pear Development Council [1983] ECR 4083
The APDC was set up by the UK government and all UK producers of the fruit had a statutory obligation to pay a levy to it for the purposes of promotion and advertising of UK apple and pear varieties specifically as UK products. This state connection was sufficient to bring it within Art 34.
The Court said that the APDC had "…a duty not to engage in any advertising intended to discourage the purchase of products from other Member States or to disparage those products in the eyes of consumers. Nor must it advise consumers to purchase domestic products solely by reason of their national origin.
"On the other hand…[Art 34] does not prevent such a body from drawing attention, in its publicity, to the specific qualities of fruit grown in the Member State in question or from organising campaigns to promote the sale of certain varieties, mentioning their particular properties, even if those varieties are typical of national production."
Failure to act by the state
Art 34 may be applied to a lack of action by the state in situations where the actions of individuals can have an effect on the free movement of goods between MS.
C-265/95 Commission v France (French Farmers’ Blockades) [1997] ECR I-6959
For over a decade there had been instances of French farmers establishing blockades and other barriers at road borders, harbours, etc. to prevent fresh produce from other MS from reaching market in France. These blockades were not always peaceful and an increasing number of complaints were addressed to the Commission by those affected. They not only concerning the actions of the farmers but also the inaction of the French authorities, particularly the police , who were clearly seen and filmed either taking no action whatsoever when violence or vandalism broke out, or were absent altogether even though warnings had previously been given. This all came to a head in 1995 with blockades of the main crossing routes from Spain to France (against Spanish strawberries and other fruit and veg) and violent acts without any police intervention.

The Court said that "…the measures adopted by the French Government were manifestly inadequate to ensure freedom of intra-Community [i.e. intra-Union] trade in agricultural products on its territory by preventing and effectively dissuading the perpetrators of the offences in question from committing and repeating them.
"Although it is not impossible that the threat of serious disruption to public order may, in appropriate cases, justify non-intervention by the police, that argument can, on any view be put forward only with respect to a specific incident and not, as in this case, in a general way covering all the incidents cited by the Commission…"
R v Chief Constable of Sussex, ex parte International Trader’s Ferry Ltd [1995] 4 All ER 364
NB This case concerns Art 35 TFEU and was heard only in the UK courts; it did not reach the ECJ. The export of live animals was subject to significant demonstrations at various UK ports and a police presence at Shoreham harbour was reduced to only a few days a week, mostly on the grounds of resources. ITF sued for the losses it sustained on the days when it could not load its ships because of the actions of the demonstrators. The issue was not the state’s liability for the actions of the demonstrators but its liability for the decision of the Chief Constable in restricting the police presence. (See below re public policy.)
C-112/00 Schmidberger [2003] ECR I-5659
Failure by the state to ban a demonstration in the Austrian alps that resulted in the closure of a major Alpine route for almost 30 hours was held to be prima facie a breach of Arts 34 and 35 TFEU unless the ban could be objectively justified. However, the Court did accept such a justification because permission was previously sought by the organisers and advance notice sent out to likely road users, alternative routes were clearly indicated, and the demonstration was for a limited time. The impact on intra-Union trade was minimised so far as possible. The Court also toook note of fundamental human rights of freedom of expression and freedom of assembly. (See below re public policy.)
Quantitative restrictions
This concept is reasonably straightforward; it includes quotas and outright bans, which were abolished early in the days of the Common Market. A definition may be found in:
2/73 Geddo v Ente [1973] ECR 865
"The prohibition on quantitative restrictions covers measures which amount to a total or partial restraint of, according to the circumstances, imports, exports, or goods in transit."
34/79 R v Henn and Darby [1979] ECR 3795
Following a reference by the House of Lords [now the Supreme Court] under Art 267 TFEU, the ECR confirmed that a prohibition on the import of pornographic material into the UK was ‘the most extreme form of restriction’.
C-170/04 Rosengren [2007] ECR I-4071
In Sweden retail sales of alcohol only took place through a state monopoly held by Systembolaget, Private customers could only import alcoholic drinks through Systembolaget and only if it did not object. Such imports through Systembolaget were also subject to extra costs incurred by it and an extra margin of 17%. Customers such as Rosengren, who imported cases of Spanish wine by mail order and direct delivery into Sweden, were subject to a criminal prosecution and confiscation of the goods. On an Art 267 reference the Court held that the fact that private individuals were prohibited from directly importing alcoholic beverages amounted to a quantitative restriction on the free movement of goods, contrary to Art 34 TFEU.

Measures having equivalent effect to quantitative restrictions (MEQRs)
The standards definition of a MEQR can be found in what is now called the Dassonville Formula.
8/74 Procureur du Roi v Dassonville [1974] CR 837
A Belgian law required that certificates of origin accompanied sales of Scotch whisky. An importer who sourced his whisky via France had difficulty obtaining these certificates so falsified them and was prosecuted. The Court said:

"All trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community [i.e. intra-Union] trade are to be considered as measures having an effect equivalent to quantitative restrictions."
Note that it is the effect – or even the potential effect – of a measure that matters, not what form it may take or the intention behind it.
Directive 70/50/EEC of December 1969
The Directive gives guidance on which measures could breach Art 34 and distinguishes between ‘distinctly’ and ‘indistinctly’ applicable measures.
(Distinctly applicable measures are those which are applied only to imported goods, whilst indistinctly applicable measures are ostensibly applied to both domestic and imported goods but may still have the effect of protecting domestic products. See further below.)
Under Directive Art 2 distinctly applicable measures may include those ‘which hinder imports which could otherwise take place, including measures which make importation more difficult or costly than the disposal of domestic products’. The list is non-exhaustive and is still occasionally referred to by the ECJ.
Art 3 covers indistinctly applicable measures may be caught by the directive in particular where the effects of the measure on the free movement of goods are out of proportion to the purpose and where there is an alternative and less onerous solution.
Distinctly applicable measures
These are applied only to imported goods, hence distinguishing them from their domestic competitors. Some examples:
51-54/71 International Fruit Company (No.2) [1971] ECR 1107
The requirement of import or export licences was held to be a prohibited measure under Art 34 because completing the paperwork takes additional time and money for the trader and will tend to add to the cost of the goods, decreasing their competitiveness.
154/85 Commission v Italy (Import of Foreign Motor Vehicles) [1985] ECR 1753
A longer and more expensive registration procedure for imported vehicles was prohibited under Art 34.
4/75 Rewe-Zentralfinanz v Landwirtschaftskammer (Apples) [1975] ECR 843
Border inspections on imported apples made their importation more difficult and costly. (See below for the defence.)
249/81 Commission v Ireland (Buy Irish) [1982] ECR 4005
See above also. Even though the Irish government claimed that the proportion of Irish goods sold in Ireland had actually fallen during the period of the campaign(!), the ECJ was concerned that such state involvement had the potential to hinder trade between MS. Substance matters far more than form and there is no need to prove actual hindrance, it is only necessary that there is such potential.
113/80 Commission v Ireland (Irish Souvenirs) [1981] ECR 1625
An Irish law required, not unreasonably you would think, that all imported jewellery that could be sold as a souvenir of Ireland (e.g. in the shape of a shamrock) should indicate its country of origin or the word ‘foreign’. There was no requirement on Irish-produced jewellery to indicate its origin. The requirement placed only on the imported product was held to be a discriminatory measure.
222/82 Apple and Pear Development Council [1983] ECR 4083
(See above also.) It is possible for a body such as the APDC to draw attention to the specific attributes of certain varieties of fruit grown in the MS e.g. that they are juicy, crunchy, full of flavour, but it cannot say �buy them because they are the domestic product�.
72/83 Campus Oil Ltd [1983] ECR 2727
Ireland had required importers of oil to buy a certain proportion of their supplies from the state-owned refinery at a fixed price. It was held discriminatory and contrary to Art 34, but see below re Art 36.
Indistinctly applicable measures
These measures do not explicitly distinguish between domestic and imported goods but have a harsher impact in practice on the imports. The main principle here is that of proportionality. The leading case is:
120/78 (Cassis de Dijon) Rewe-Zentrale AG v Bundesmonopolverwaltung fur Branntwein [1979] ECR 649
The import of Cassis de Dijon, a blackcurrant liqueur, into Germany from France was refused on the basis that the alcoholic strength of the product was too low(!). German law required such drinks to be of a minimum 25% alcohol whereas the French product was between 15% and 20% alcohol. The ECJ said that in the absence of any common rules in the EU with regard to alcohol production and marketing, it was up to MS to regulate as they wished, however the unilateral requirement of a minimum alcohol level was an obstacle to trade. The French producers already had a system for producing a drink that was compliant with French law and perfectly acceptable to that market, and to require them to set up a separate production for the German market would be to impose an extra or ‘dual’ burden which would be anticompetitive.
They then came up with a principle which is now called ‘the rule of mutual recognition’:
"There is…no valid reason why, provided that they have been lawfully produced and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State;…"
(The second part of the case is considered below under derogations.)
Other examples of indistinctly applicable measures
207/83 Commission v UK (Origin Marking) [1985] ECR 1202
A UK law required certain retail goods e.g. clothing, to be marked with their country of origin. This was held to be contrary to Art 34 as it permitted consumers to "…assert any prejudices which they may have against foreign products" and affect EU trade. If a producer or retailer wishes voluntarily to indicate the country of origin, they may do so, but it cannot be compulsory under national legislation.
45/87 Commission v Ireland (Dundalk Water Supply) [1988] ECR 4929
An Irish requirement that water pipes supplied under contract for a local authority (Dundalk) had to be certified as complying with a particular Irish Standard. It so happened that only one manufacturer, in Ireland, produced such pipes although the requirement was supposedly indistinctly applicable. The ECJ said that the measure was contrary to Art 34 and the objective of quality could be achieved by allowing the use of pipes produced elsewhere to a standard equivalent to that of the Irish Standard.
82/77 Openbaar Ministerie v Van Tiggele [[1978] ECR 25
A Dutch law required that certain spirits could only be sold at a minimum price. A trader prosecuted for selling spirits below that price claimed that the rule was contrary to Art 34. The ECJ said that although national price-fixing applied indistinctly would generally not hinder trade, it may do so in certain specific cases, for example, a price could be set that would reduce any competitive advantage held by the imported product. Any measure that excluded an importer’s ability to benefit from flexibility could be capable of violating Art 34. However, now see below re the Keck case.
261/81 Walter Rau v de Smedt [1982] ECR 3961
A Belgian law required that margarine had to be sold in cube-shaped packs to distinguish it from butter. This would have required this German company to set up a separate production line for the Belgian market and incur extra costs. The ECJ said that the distinction could just as easily be made clear by effective labelling.
Derogations and defences to Art 34 TFEU
These may be found in Art 36 TFEU and also in Cassis de Dijon.
For Distinctly Applicable Measures – use Art 36 ONLY
For Indistinctly Applicable Measures – use Art 36 AND Cassis
113/80 Commission v Ireland (Irish Souvenirs) [1981] ECR 1625
The Irish government in this case tried to argue consumer protection to justify the distinctly applicable requirement that imported jewellery only be origin marked. Note that this case was brought almost immediately following the Cassis case. The Court refused to extend Cassis to distinctly applicable measures because, by their very nature, they were discriminatory and thus no justification could be permitted.
Art 36 TFEU (was Art 30 EC)
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 and 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.
Note that this is an exhaustive list (no additions possible) and has been interpreted strictly by the ECJ because it is an exception to a fundamental freedom of the EU. Note also that Art 36 CANNOT be used to justify a financial charge caught under Art 30 TFEU.
These exceptions can also only be pleaded in the absence of any relevant EU-wide legislation. If there is such legislation, Art 36 cannot be pleaded to justify national measures that are incompatible with it.
C-1/96 R v MAFF ex parte Compassion in World Farming [1998] ECR I-1251
The Agriculture Minister could not ignore a new directive on the movement and export of live farm animals even though the directive did not conform to an international convention on the treatment of animals. The directive overrode any national measures, even under Art 36, and any further developments had to be based on that directive.
174/82 Officier van Justitie v Sandoz [1983] ECR 2445
The Netherlands forbade the sale of muesli bars to which vitamin supplements had been added, on the grounds that the vitamins were a risk to public health. They were already freely sold in Belgium and Germany. The ECJ said that the MS could rely on Art 36 as a derogation but it was for the state to produce the necessary evidence of a risk, not for the importer to prove that was no risk. (It is virtually impossible to prove a negative!) Ideally a MS should be able to point to international scientific research to establish a risk, such as that produced by the World Health Organisation, the Food and Agriculture Organisation (both UN agencies) or the EU’s own scientists.
A Member State’s own scientific body may produce such evidence in support of a restriction, but it is open to the Commission to refute the evidence. See e.g. C-24/00 Commission v France [2004] ECR I-1277 at para 67 on the risks associated with drinking too much Red Bull.
Public morality
Neither EU law nor the ECJ has attempted to set out a standard of ‘public morality’ for the EU, but has sometimes had to assess whether national rules have been applied proportionately and without discrimination.
34/79 R v Henn and Darby [1979] ECR 3795
See also above under the definition of quanititative (restriction.) Here the ECJ was prepared to accept a full ban on the import of obscene films and magazines on the basis that such products were also generally banned across the UK, and thus the ban was non-discriminatory.
Compare this case with
121/85 Conegate Ltd v HM Customs and Excise [1986] ECR 1007
The goods in this case were inflatable sex dolls and other such items. Although the display of these items was prohibited in the UK, their sale was permitted. Consequently the UK could not ban the import of equivalent items. The Court said, "…a Member State may not rely on grounds of public morality in order to prohibit the importation of goods from other Member States when its legislation contains no prohibition on the manufacture or marketing of the same goods in its territory."
(See also, in the lectures on Free Movement of Persons, the case 115-116/81 Adoui and Cornuaille v Belgium [1982] ECR 1665. The state could not deport an EU citizen for engaging in conduct (here prostitution) that was not forbidden to its own citizens.)
Public policy and public security
C-265/95 Commission v France (French Farmers’ Blockades) [1997] ECR I-6959
See above for the facts. The Court refused to accept that a public security threat existed sufficient to justify any failure to act on the part of the public authorities.
72/83 Campus Oil [1983] ECR 2727
The Irish requirement that all petroleum importers to buy a minimum proportion of their requirements from a state-owned producer at a fixed price did prima facie breach Art 34, but the Court accepted that oil was so important for the general life of the country that it was necessary to safeguard a domestic fuel capacity. Consequently Art 36 public security could be pleaded here so long as the measure adopted was the minimum necessary to achieve the aim and was proportionate to the anticipated risk.
Public health
40/82 Commission v UK (Turkeys/Imports of Poultry Meat/Newcastle Disease) [1982] ECR 2793
The UK banned the import of turkeys from France and some other EU states on the official reason that there was a risk of an outbreak of a poultry infection called Newcastle Disease. There had however been no recent outbreak of the disease in France (although it was active in some Eastern European states which were the source of some of the turkeys from France). It so happened that the ban was put in place in the weeks leading up to Christmas and following two years of complaints from UK turkey producers of large quantities of imported turkeys from France and the consequent ‘unfair’ competition. The Court said that "…given certain established facts…the real aim of the 1981 measure was to block, for commercial and economic reasons, imports…from other Member States [and]…that the 1981 measures did not form part of a seriously considered health policy."
124/81 Commission v UK (UHT Milk) [1983] ECR 203
There was a UK requirement that UHT (long life) milk could only be sold by approved dairies or distributors in order to ensure that the milk was free from any infections. This meant that imported milk had to be re-treated and repackaged, thus seriously restricting trade in the product. The ECJ said that there was evidence that milk in all the other MS was of similar quality and subject to similar controls so further measures were ‘inappropriate and unnecessary’.
174/82 Officier van Justitie v Sandoz [1983] ECR 2445
Whilst in most situations MS should be able to rely on tests done in the country of origin, it may be that different attitudes to the risk associated with, e.g. food additives, may justify additional testing. In the case of the muesli bars, there was sufficient uncertainty as to the effects of eating a large quantity of these vitamin additives as to justify testing in the importing MS.
Protection of national treasures
This is most likely to allow for a system of export licences such as that applied in the UK. An export licence may be withheld for a period of time for an important piece of art or sculpture etc. bought at auction in order for an equivalent amount to the purchase price to be raised nationally. If successful, the item would be �saved for the nation� and put on display to the public.
Compare 7/68 Commission v Italy (Art Treasures) [1968] ECR 423 above. Italy was not permitted to impose an export tax to �protect� its national treasures. This derogation is not available to justify any financial barrier to trade.

Note also Directive 93/7/EC governing the export of cultural property, and Regulation 3911/92/EEC, which deals which the export of cultural goods to third countries.

Protection of industrial and commercial property
This covers mostly intellectual property rights such as trade marks, patents and copyrights. Although this is largely still found under national law, MS should take care that the measures they take do not adversely affect the principle of free movement of goods within the internal market (Art 345 TFEU and C-350/92 Spain v Council). The ECJ emphasised that the exception in Art 36 cannot ‘constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States’.
C-92/92 Collins v Imtrat [1993] ECR I-5145
The pop star Phil Collins wanted to bring a case in Germany against the distributor of pirated tapes from his concerts but German law at the time only allowed such cases to be brought by German nationals. Even though the rules relating to the protection of copyright were for MS to lay down, they could not be applied so as to discriminate.

C-388/95 Belgium v Spain (Rioja wine exports) [2000] ECR I-3123
A Spanish law required Rioja wine (a famous Spanish variety) intended for export to be bottled in the La Rioja region of Spain. Although apparently in breach of Art 35 TFEU re exports, the international reputation of the wine justified rules that prevented it being exported in bulk and bottled elsewhere.
Cassis de Dijon and the Cassis rule of reason
120/78 (Cassis de Dijon) Rewe-Zentrale AG v Bundesmonopolverwaltung fur Branntwein [1979] ECR 649
The first part of the judgment introduced the rule of �mutual recognition�. Goods lawfully on sale in one MS should be free to be marketed in any other MS. This rule can then be subject to the second part of the judgment � the �rule of reason� or �mandatory requirements defence�.
"Obstacles to movement within the [Union] resulting from disparities between the national laws relating to the marketing of the products in question must be accepted in so far as those provisions may be recognised as being necessary in order to satisfy mandatory requirements relating in particular to the effectiveness of fiscal supervision, the protection of public health, the fairness of commercial transactions and the defence of the consumer."
The German government advanced an argument that a lower level of alcohol in liqueurs was actually harmful to the health of consumers in that it "more easily induce[d] a tolerance towards alcohol than more highly alcoholic beverages". This was in spite of the fact that a very wide range of other alcoholic drinks with lower alcohol levels was already available on the German market, and that most liqueurs of this type were consumed in a diluted form. The Court pointed out that any concerns consumers might have about their health could be addressed by ensuring that "suitable information is conveyed to the purchaser by requiring the display of an indication of origin and of the alcohol content on the packaging of products".
This is an example of the public health derogation, the only one that is common to both Art 36 and Cassis. Some other public health cases:
178/84 Commission v Germany (Beer Purity Laws) [1987] ECR 1227
The modern German rules about beer date back to the Reinheitsgebot of 1516, two rules of which prohibited much beer lawfully produced and marketed elsewhere from being sold in Germany. The first of those rules required that to be called ‘bier’, the brew could only be made from four ingredients: malted barley, hops, yeast and water. So no wheat- or maize-based beer, e.g. Hoegaarden. (The product could still be sold but could not be given the name ‘bier’.) The second rule banned the marketing of beer containing additives. It was generally accepted that these rules contravened Art 34 TFEU but could they be justified under Cassis (they were distinctly applicable)? The German government pleaded public health concerns for the ban on all additives.
The Court agreed that national rules could be applied to specific additives in all products (not just a particular product) provided that the rules met a ‘genuine need of health policy’. But here the specific additives were permitted in other beverages and indeed were lawfully produced in other MS with no apparent ill effects on consumers. It said that any prohibitions must be restricted to what were ‘actually necessary to secure the protection of public health’ and pointed to international scientific research (naming the FAO, WHO and the EU’s Scientific Committee for Food) that the additives in question presented no risk to public health.
The ban was therefore disproportionate and any consumer health concerns could be addressed by clear labelling of the products.
95/01 Greenham v Abel [2004] ECR I-413
This is a useful case concerning national laws prohibiting the addition of vitamins and minerals to foodstuffs, other than those permitted in the importing states. The Court said that MS could indeed prohibit the marketing of such items but subject to the following conditions:
– the prior authorisation procedure must be easily and quickly available;
– there must be a right to a legal challenge of a refusal; and
– a refusal to authorise must be based on a detailed assessment of the risk based on the most recent international research.
Consumer protection
178/84 Commission v Germany (Beer Purity Laws) [1987] ECR 1227
Relating to the first part of the German law, that of the four permitted ingredients. The German argument was that the German consumer associated the name �bier� with a drink made exclusively from those four ingredients and he was entitled to be protected in that association. The Court discussed consumer habits over time and place and was not inclined to support MS legislation designed to �crystallise given consumer habits so as to consolidate an advantage acquired by national industries�. It was perfectly legitimate to assist consumers in their choice of drinks to continue those habits, but this could be achieved by measures that fell well short of actually banning the importation of other products. Appropriate compulsory labelling to show the nature and ingredients of the product would enable the consumer to �make his choice in full knowledge of the facts�.
Following this case and also C-46/93 Brasserie du Pecheur [1996] ECR I-1029, the German law was amended to permit such imports with appropriate labelling. However, beer brewed within Germany must still comply with the traditional rules.
Other cases in this area that result in an alternative of labelling include:

286/86 Minist�re Public v Deserbais [1988] ECR 4907 � the fat content in �Edam� cheese;

C12- and C14-00 Commission v Spain and Commission v Italy [2003] ECRI-459 � the proportion of vegetable fats other than cocoa butter in chocolate;
788/79 Italian State v Gilli and Andres [1980] ECR 2071 � a requirement that vinegar could only be made from the fermentation of wine and no other fruit.
261/81 Walter Rau v de Smedt [1982] ECR 3961 � margarine to be sold only in cube-shaped packs.

Other mandatory requirements
The Cassis list is not exhaustive and case law has been allowed to develop some other justifications to this list, provided that the measures taken are proportionate to the objective pursued:
(a) Protection of the environment
302/86 Commission v Denmark (Returnable bottles) [1988] ECR 4607
Under Danish law all containers for beer and soft drinks had to be returnable. This clearly would be a problem for producers of drinks in other states who would have to take specific steps to produce the containers and accommodate the returns. The Court accepted that protection of the environment was one of the Union’s ‘essential objectives’ and therefore could justify certain limitations on the free movement of goods. It was therefore necessary to examine whether the Danish restrictions were necessary to achieve the objectives. (For example, could compulsory recycling of the containers rather than their return be sufficient?)
C-320/03 Commission v Austria (Transport on the A12 motorway) [2005] ECR 9871
This Austrian law prohibited lorries over a certain size carrying certain goods from a long stretch of the A12 motorway. The aim was to improve air quality by persuading the goods onto the rail network and protect human, animal and plant health. The Court was not persuaded that rule was proportionate to the aim and insufficient research had been undertaken.
(b) Protection of culture
60-61/84 Cin�th�que [1985] ECR 2605
A French rule prohibited the sale or hire of videos of films within a year of their first showing at a cinema, thus restricting the import of videos from other MS. The Court accepted that the intention was to protect the French film industry and indirectly French national culture.
(See also, in the lectures on Free Movement of Persons, the case 379/87 Groener [1989] ECR 3967, in which the Court accepted an Irish requirement that a knowledge of the Irish language was necessary for teachers, even though the post in question did not need it. It recognised a clear national policy of maintaining and promoting the language.)
(c) Diversity of the press
C-368/95 Familiapress [1997] ECR I-3689
An Austrian law prohibited newspapers from offering competitions with cash prizes. This was intended to protect smaller publishers from competition from large publishers who could offer bigger prizes. The Court accepted the need to promote a diverse newspaper industry and safeguard freedom of expression.
(d) Social-cultural characteristics
145/88 Torfaen Borough Council v B&Q [1989] ECR 3851
This is one of the ‘Sunday Trading Rules’ cases in the UK in the 1980s. The law at the time only allowed very limited opening hours for retail businesses on Sundays and were full of inconsistencies and absurdities. A number of major retailers, particularly DIY stores, routinely flouted the rules and opened on Sundays, arguing that the bulk of their business took place at weekends. When cases were brought against them by their local councils, they argued that the Sunday trading rules breached Art 34 by hindering trade between member states.
In this particular case the Court accepted that the national rules ‘…reflect[ed] certain political and economic choices in so far as their purpose [was] to ensure that working and non-working hours [were] so arranged as to accord with national or regional socio-cultural characteristics…’.
These cases have now been overturned by the important case of Keck in which the ECJ finally found an opportunity to directly address the increasing number of ingenious arguments made in attempts to extend the Cassis mandatory requirements.
The Keck judgment
Firstly we need to distinguish between dual-burden and equal-burden rules. An example of a dual-burden rule could be found in Walter Rau, where the exporter of margarine to Belgium would have the additional burden of setting up a separate production and packing line for the Belgian market from that he was already operating for his domestic German market. A Belgian margarine producer would have no such extra cost. So even though the rule appeared indistinctly applicable, in that it applied to both domestic and imported goods, in practice it laid an extra burden on the exporter.
Equal-burden rules, on the other hand, affect domestic and imported goods equally and tend not to apply to the characteristics of the product but rather on how they are sold, e.g. Cinetheque and the video sales or Torfaen v B&Q on Sunday opening hours.
C-267, 268/91 Keck and Mithouard [1993] ECR I-6097
These joined cases came about as a result of criminal prosecutions of the two defendants on the ground that they have sold goods at a loss – what is often called ‘loss-leading’. The intention is to attract customers to the store with offers ‘too good to miss’ and then sell them other normally priced goods. This practice was forbidden in French law. The defendants claimed that this law was a MEQR and thus contrary to Art 34.
The ECJ jumped at the opportunity to rethink its policy:
"In view of the increasing tendency of traders to invoke…[Art 34] as a means of challenging any rules whose effect is to limit 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."…
"However, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting or prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially, trade between Member States within the meaning of the Dassonville judgement…provided that those provisions apply to all affected traders operating within the national territory and provided that they affect in the same manner, in law and fact, the marketing of domestic products and those from other Member States."
It concluded that such ‘selling arrangements’, provided that they fulfilled the above conditions (application to all traders/affect in the same manner in law and in fact), would fall entirely OUTSIDE the scope of Art 34 TFEU.
Post-Keck case law – distinguishing between ‘product requirements’ and ‘selling arrangements’
C-401,402/92 Tankstation [1994] ECR I-2199
This case concerned Dutch rules on the opening hours of petrol stations and also involved criminal proceedings. The Court was satisfied that the rules concerned selling arrangements and fell outside Art 34.
C-292/92 H�ndermund [1993] ECR I-6787
A prohibition by the German pharmacists� association prevented its members from advertising popular medicines outside their shops. The Court was satisfied that this was a �selling arrangement� and fell outside Art 34.
C-412/93 Leclerc-Siplec [1995] ECR I-179
A French law prevented the TV advertising of certain products, including distributed goods such as petrol, in order to �persuade� those sectors to advertise in regional newspapers instead. Leclerc-Siplec was a petrol distributor (Leclerc is a well-known French supermarket chain with particularly good value petrol!) and wished to challenge the law under Art 34. The Court instead found it to be a �selling arrangement�.
C-470/93 Mars [1995] ECR I-1923
A German law prohibted the selling of Mars bars marked on the label as ‘110 per cent’. (This was part of a Europe-wide campaign.) The Court acknowledged that the packaging of a product was part of that product (as in many previous cases) and that to forbid such packaging would impose a dual burden on the manufacturer, that of a separate packaging line for Germany. It was consequently a ‘product requirement’ and would fall under Art 34, any derogation needing to be found under Cassis.
C-368/95 Familiapresse [1997] ECR I-3689
See above for the Cassis derogation; prior to this point in the judgment, the ECJ accepted that publishers of newspapers and magazines in Germany (who would have a market also in Austria) would be affected by the Austrian law forbidding competitions with cash prizes. The competitions were printed as an integral part of the content of the newspaper or magazine and the rule was thus a ‘product requirement’ under Art 34.
C-405/98 Gourmet International Products [2001] ECR I-1795
A Swedish law prohibited the advertising of alcoholic drinks in the print or broadcast media. This would appear to be a ‘selling arrangement’ rather than something affecting any particular product, whether domestic or imported, but the Court acknowledged that the consumption of alcoholic drinks is closely linked to traditional social practices and to local habits and customs. Consequently, attempts to introduce new imported products to the market would be badly affected by a prohibition on advertising. It therefore came under the second Keck condition that ‘the rule affected in the same manner, in law and in fact, the marketing of domestic goods and imports’. This was not the case in fact so the rule did come under Art 34, although possibly justifiable under Cassis.

See the Example :

Problem Question:
Mark Fowler imports bananas into Wales from the Caribbean. The bananas are transported in �banana boats� with highly sophisticated refrigeration systems. On arrival at Cardiff port in Wales, the bananas are subject to a �20 per ton �fruit import duty�.
An Italian importer, Beppe, buys bananas from Mark and imports them into Italy. On arrival at Turin port, the bananas are subject to a fee of 2 euros per crate. The proceeds of this fee, introduced by the Italian government, are used to help finance pensions for workers in the Italian fruit industry.
A further charge of 5 euros per crate is made for inspecting the bananas to ensure that they meet health and safety concerns. It is known that sometimes poisonous spiders and other dangerous Caribbean insects get into the banana containers.
Meanwhile, in response to public concerns about the safety of refrigerated bananas, Italy has launched a research programme to study the effect of such bananas on consumers. All banana importers and domestic growers must pay a levy of 10% of the wholesale price of their bananas to finance this research. Italy is not a major producer of bananas.
Advise Mark and Beppe as to the legality under EU law of the following charges:
� �20 �fruit duty�
� 2 euro fee
� Inspection fee of 5 euros
� 10% levy.

Answer

Mark: The �20 �fruit duty�

Relevant Article is Art 28 TFEU��adoption of a Common Customs Tariff in their relations with Third Countries.�

Caribbean source therefore outside EU, so CCT could apply. Provided the �fruit duty� is part of that CCT then it is perfectly LEGAL. CCT set every year by Council on recommendation of Commission Art 31. Art 29 then states that �products coming from a third country shall be considered to be in free circulation in a MS if the import formalities have been complied with��. So the bananas will then be considered to be in free circulation after the duty has been paid. But if �20 duty is NOT part of the CCT then it is illegal.

2. Beppe: The fee of �2, inspection fee of �5 and the 10% levy

(a) The fee of �2

UK to Italy, subject to �2/crate at Italian border, introduced to help workers in Italian fruit industry.

It�s not called a Customs Duty, so is it a CHEE? Art 30 TFEU prohibits CHEEs. Nothing in primary or secondary legislation so case law is needed.

Commission v Italy (Statistical Levy): prohibits any charge, however small and whatever its designation and mode of application, which is imposed UNILATERALLY on foreign goods by reason of the fact that they cross a border. (This is so even if not imposed for benefit of state, not discriminatory or protective in effect and product not in competition with any domestic product.)

Unilateral charge here? Yes. Bananas already in (via CCT) so any further charge on moving within EU would most likely be illegal.

Can purpose justify charge? Commission v Italy (Italian Art Treasures) � ECJ looks at effect not purpose. Also Statistical Levy and Sociaal Fonds voor de Diamantarbeiders � however noble the purpose, it is still irrelevant if the charge is one caught by Art 30. Art 36 derogations only apply to Art 34 and MHEEs. Fundamental question is: does the charge create an obstacle to the free movement of goods within the single market?

Financing pensions is therefore irrelevant to an illegal charge. Beppe can bring case against Italian government because fee makes it more expensive to import bananas from UK to Italy.

(b) Inspection fee of �5

Again, this isn�t a customs duty, so is it a CHEE? Definition is given above, but also, as above, the court will look at the effect, not the purpose. It�s a CHEE imposed as result of bananas crossing a border and effect is to make import more expensive.
BUT
Can the Italian government claim that the inspection fee is falling outside the scope of Art 30 and therefore legal?

Commission v Germany [1988] (Animal Inspection Fees)
Inspection required by directive. Charge? ECJ started by repeating its standard position but then recognised some exceptions:

– payment for a service rendered to the trader at his request;
– payment for an inspection carried out to fulfil obligations under EU law ;
– a charge that relates to a general system of internal dues applied under Art 110 TFEU (see below).
Cases include Public Warehouses, Bauhuis, Bresciani, Ford Espa�a etc.

Looks like the �5 is going to fall under the first or second exception, but more information needed on background to inspection. Fee charged must not exceed the actual cost of the inspection (Bauhuis and Ford Espa�a). For national court to decide.

Again, which is the relevant Treaty Article? Look at circumstances of charge. Is it because goods have crossed the border (Art 30) or is it a tax applied to goods once they are INSIDE the MS, i.e. internal taxation (Art 110)?

Seems to be latter, so Art 110. MS cannot impose an internal tax that discriminates against imports. But a genuine internal tax will not offend Art 110.
Consider both paragraphs of the Article.
See Commission v Germany above � internal taxation is first exception. So how to decide if a levy/tax is a �genuine internal tax�?
Denkavit v France [1979] (Lard)
France argued it was equivalent to slaughterhouse tax paid by domestic producers. ECJ said it would only be legal if it related to �a general system of internal dues applied systematically and in accordance with the same criteria to domestic and imported goods alike�. Also proceeds of tax must not be used to benefit the domestic goods solely, even though the ECJ has recognised that there may be some economic justification for the tax.

Does the 10% levy fulfil these criteria? Same amount OK, charged in accordance with same criteria. Looks OK. Proceeds of tax re public concern re refrigeration. MAYBE discriminatory, as domestic bananas (if any) would presumably not need refrigeration. Bias? Maybe not. Could be argued result of research would reassure public and thereby NOT benefit domestic growers. Doesn�t appear to be part of �a general system of internal dues� but rather a specific duty for a specific purpose.

Does it matter that Italy is not a major producer of bananas? Commission v Italy (Bananas)/Cooperativa Cofrutta Srl [1987] � again focuses on �forming a part of a general system of internal dues. �Cofrutta tax� held to be genuine.

If genuine internal tax � Art 110 � OK. If not, then presumably Art 30 will apply as a CHEE and assessed as such, i.e. illegal.

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