1. Smaragda Rigakou smaragda.rigakou@gmail.com
8/12/2014
National and Kapodistrian University of Athens
Law school
European Law
MARKET FREEDOMS I
Smaragda Rigakou

2. 8/12/2014
Internal Market
Single Market is central to EU- Principal economic rationale
Substance: Economic dimension towards broader social, consumer, environmental issues
Institutional: legislation harmonization
legal doctrine mutual recognition
Market Freedoms I, Smaragda Rigakou
03/12/2018

3. Internal Market ECONOMIC INTEGRATION
8/12/2014
Internal Market
ECONOMIC INTEGRATION
Free trade area Customs union Common market
Common Market Single Market Internal Market
Market Freedoms: Social & Economic objectives
Basic economic aim: Optimal allocation of resources in the EU (e.g. Italian worker in Germany)
Factors where most valued
Market Freedoms I, Smaragda Rigakou
03/12/2018

4. Internal Market Article 26 TFEU Ongoing task
8/12/2014
Internal Market
Article 26 TFEU
Ongoing task
Negative/deregulatory approach: Market Freedoms
Positive approach: Harmonization
Market Freedoms
EU Law prohibits national rules that hinder cross-border trade
Mutual Recognition
Harmonization
EU Law overcomes diversity of national laws
Trough 114&115 TFEU and sector- specific Treaty Articles
Market Freedoms I, Smaragda Rigakou
03/12/2018

5. Internal Market Pre- 1986: Unanimously the approximation of laws
8/12/2014
Internal Market
Pre- 1986:
Unanimously the approximation of laws
Judicial contribution: Promotion of EU single market
SEA 1986
Economies of scales more competitive
White paper Instruments:
Mutual recognition
Harmonization
Industrial standards
From mid-1990s: Broader concerning to social, environmental, consumer safety, labour policy, equal opportunities, social cohesion (see also a. 3TFEU)
Market Freedoms I, Smaragda Rigakou
03/12/2018

6. Internal Market Mutual recognition
8/12/2014
Internal Market
Mutual recognition
A product lawfully manufactured (or a qualification diploma granted) in a MS should be capable of being sold/recognized in another MS.
MS address alternative solutions to the same underlying problems Horizontal transfer of sovereignty
Host MS prima facie accepts the goods/qualifications trusts the regulatory regime of the home MS
“Exceptions”:
Public interest defenses of a. 36 TFEU
Mandatory requirements by the ECJ
Market Freedoms I, Smaragda Rigakou
03/12/2018

7. Internal Market Harmonization 114 TFEU
8/12/2014
Internal Market
Harmonization
114 TFEU
EU adopts measures implementing 26 TFEU
ECJ: Not unlimited legislative power- must be limited to those powers conferred on it
Minimum Harmonization: EU legislation sets a floor and the Treaty a ceiling
Maximum Harmonization: Pre-emption of national actions (exhaustive regulation of the given field/ covers the entire area)
Market Freedoms I, Smaragda Rigakou
03/12/2018

8. Internal Market Standardization
8/12/2014
Internal Market
Standardization
CEN/CENELEC/ETSI: competent (private) standardization organs
Voluntary European Standards published in the EU OJ
Less detailed harmonization Directives
More easily voted from the EU institutions
Market Freedoms I, Smaragda Rigakou
03/12/2018

9. 8/12/2014
Internal Market
Removal of any impediments for the realization of the single market:
Barriers to trade (duties, customs, taxes, quotas)
Barriers to free movement of factors (services, people, capital)
State aids favouring specific industry
Private action recreating barriers (anti-trust)
Market Freedoms I, Smaragda Rigakou
03/12/2018

10. Internal Market Common Market
8/12/2014
Internal Market
Common Market
Not an end itself but a means to achieve economic and political goals
Not only liberalization of trade but also necessitates free movement of factors
Keyword: FREEDOMS
Market Freedoms I, Smaragda Rigakou
03/12/2018

11. Free Movement of Goods a. 28-30 TFEU & a. 110-113 TFEU:
8/12/2014
Free Movement of Goods
a TFEU & a TFEU:
Customs, duties, discriminatory taxes, charges with an equivalent effect
a TFEU:
Quantitative restrictions, measures with an equivalent effect
Market Freedoms I, Smaragda Rigakou
03/12/2018

12. Free Movement of Goods (I)CUSTOMS, DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I)CUSTOMS, DUTIES, CHARGES, TAXES
a TFEU:
customs duties, charges with an equivalent effect
a TFEU:
taxes that discriminate against imports
Market Freedoms I, Smaragda Rigakou
03/12/2018

13. Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Customs duties/ CEE
Customs union:
Foundation of the EU/ First step/Ideal
Central Idea of customs union+ internal market
a.28(1) TFEU: Foundational provision
Prohibition of customs duties on imports and exports & charges of equivalent effect (“CEE”) between MS
Adoption of common customs tariff for 3rd countries
Market Freedoms I, Smaragda Rigakou
03/12/2018

14. Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Customs duties/ CEE
What is the meaning of “Goods”?
ECJ: “products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions”
(e.g. with artistic/historical value sculptures)
Goods produced in a MS or outside EU but already in free circulation within EU
(e.g. from USA but imported and custom levied in UK)
Case 7/68, Commission v Italian Republic
Market Freedoms I, Smaragda Rigakou
03/12/2018

15. Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I)CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Customs duties/ CEE
CEE: Effect (not purpose)
The application of the Treaty provisions is based on the effect of a state measure and not its purpose, irrelevant the designation or mode of application
CEE: Sufficient that the charge was imposed on goods because they had crossed a border
CEE: The “exchange exception”: Merely a payment for a service rendered by the state (e.g. warehousing)
Per se unlawful if a tax is caught under 30 TFEU
Irrelevant if: beneficial to the whole economy/serves general interest (e.g. public health exemptions)
Market Freedoms I, Smaragda Rigakou
03/12/2018

16. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Discriminatory tax provisions
Complete neutrality of internal taxation
Prohibition of levying discriminatory taxes, disadvantaging those imported products in competition with domestic goods.
…as regards domestic & imported goods (country of origin)
…substantive provisions & procedural provisions
Direct discrimination NO EXEMPTION (cannot be justified)
Indirect discrimination = No formal distinction based on the origin of product but protective features in effect
Case 112/84: Humbolt (tax on cars over 16CV)
Market Freedoms I, Smaragda Rigakou
03/12/2018

17. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Discriminatory tax provisions
ECJ: “In its present stage of development Community law does not restrict the freedom of each Member State to lay down tax arrangements which differentiate between certain products on the basis of objective criteria”
Accepted results
Restrain in the importation but also equivalent economic effect in the national territory
Case 140/79 Chemial
Market Freedoms I, Smaragda Rigakou
03/12/2018

18. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Discriminatory tax provisions
EU law does not prohibit the use of tax policy to attain social ends, provided that the tax was based on an objective criterion, was not discriminatory and did not have a protective effect
Commission v Greece (C-132/88):
Differential rates to encourage the use of more environmentally friendly car models
Market Freedoms I, Smaragda Rigakou
03/12/2018

19. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
TFEU: Discriminatory tax provisions
a.110 (1) TFEU: Similar Goods
a.110 (2) TFEU: Goods not strictly similar but in competition with each other(e.g. wine/bier)
Cross-elasticity of demand (when the price of one rises, consumers switch to the lower-priced product)
Consumers perceive them to be interchangeable (more scrutiny on the imposed tax)
Market Freedoms I, Smaragda Rigakou
03/12/2018

20. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
a v TFEU
Mutually exclusive sets of articles
Both: Imposition of fiscal charges by the state
Customs duties: enacted AT THE TIME /on account of importation Unlawful per se
Tax: internal fiscal policy MS to impose taxes
if discriminates : 110 (1) TFEU
Unlawful
if protective : 110 (2) TFEU
Market Freedoms I, Smaragda Rigakou
03/12/2018

21. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
a v TFEU
Levies imposed on importers
Custom or tax?
Tax if related to a general system of internal duties applied systematically and in accordance with the same criteria to domestic products alike.
at the same rate
at the same marketing stage
at the basis of an identical chargeable event
Case C-441 and 442/98 Michailidis
Market Freedoms I, Smaragda Rigakou
03/12/2018

22. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
a v TFEU
Imports taxed but not produced by the importing state
Custom or tax?
Tax if related to a general system of internal duties & tax revenue identical to other tax revenue
If it was considered as CEE
It would be automatically unlawful (condemned under 30 TFEU)
The importing MS would not be able to tax goods that it did not produce
Draconian solution with severe economic, social and political impact
Not necessarily lawful- To be assessed under a. 110(2)TFEU
Case C-193/85, Co-Frutta (taxes on bananas from Italy)
Market Freedoms I, Smaragda Rigakou
03/12/2018

23. Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
8/12/2014
Free Movement of Goods (I) CUSTOMS DUTIES, CHARGES, TAXES
a v TFEU
Selective tax refund
Refund linked to a specific tax levied on the goods (not a TFEU)
Custom or tax?
if wholly offsets the tax CEE under a. 30
if partially offsets the tax Discriminatory tax under a. 110
Case C-347/95, Fazenda Publica
Market Freedoms I, Smaragda Rigakou
03/12/2018

24. 8/12/2014
CASE STUDY 1
The German law provides for the establishment of a Fund “to promote the marketing and use of German agricultural, forestry and food products by opening up and developing domestic and foreign markets through the use of modern methods and techniques". For the financing of the Fund, the German law sets the contribution from undertakings presenting for inspection meat from pigs slaughtered for commercial purposes at €1 per pig. Mr. Butcher operates a wholesale meat business and a slaughterhouse in Germany. It presented a number of slaughtered pigs for inspection. Most of the pigs came from the Netherlands and he marketed the pork in Germany under a trade description indicating the country of origin of the animals. The German authorities issued a notice to Mr. Butcher demanding payment of an amount corresponding to the inspections. Following the rejection of its objection, he commenced proceedings before the German court, for annulment of that demand for payment. The German court referred to the ECJ for a ruling: Does such a contribution qualify as custom, CEE, internal tax? Is there a discrimination? What should the ECJ answer?
Case C-72/92, Firma Herbert Scharbatke GmbH v Federal Republic of Germany
Market Freedoms I, Smaragda Rigakou
03/12/2018

25. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
34-37 TFEU: prevent MS from placing quotas on the amount of goods
Quotas + measures having equivalent effect to quantitative restrictions (“MEQRS”)
Even with no discrimination inhibiting the free flow of goods
Discrimination is a sufficient but not necessary condition for invocation of a. 34 TFEU! (compare with customs/taxes)
Market Freedoms I, Smaragda Rigakou
03/12/2018 25

26. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
34 TFEU catch both Quantitative restrictions + MEQRS
Prohibits any restrain of imports/exports/ movement of goods in transit
MEQRS: All trading rules enacted by MS which are capable of hindering, directly or indirectly, actually or potentially, intra- community trade
Market Freedoms I, Smaragda Rigakou
03/12/2018 26

27. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
1) Discriminatory Barriers to trade
import/export restrictions: e.g. registration costs
promotion/favouring of domestic products:
e.g.1 engaging in a campaign to promote the purchase of domestic as opposed to imported goods
e.g.2 origin marking
e.g.3 public procurement (national standard or equivalent)
price fixing: e.g. not below the publisher’s recommendation for importers
imports more costly/difficult than domestic sales: e.g. certificate of conformity for imported vehicles
Market Freedoms I, Smaragda Rigakou
03/12/2018 27

28. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
2) Dassonville
Case 8/74: The seminal early judicial decision!
Case facts
Belgian law: Goods bearing designation of origin to be accompanied by governmental certificate
Scotch whisky from France in Belgium
Significance of ECJ’s ruling
MEQRS, rule of reason, irrespective of discriminatory intention
Market Freedoms I, Smaragda Rigakou
03/12/2018 28

29. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
2) Dassonville
MEQR: Capable, potentially, indirectly
Crucial: the effect of the MEQR not required to have a discriminatory intention (seeds for Cassis)
Reasonable restrictions not by a.34 TFEU (seeds for rule of reason)
Market Freedoms I, Smaragda Rigakou
03/12/2018 29

30. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
3) Indistinctly Applicable Rules - “Cassis de Dijon”
Case 120/78: Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein
Case facts
Import of liqueur Cassis de Dijon into Germany from France
Not of sufficient alcoholic strength
Significance of ECJ’s ruling
Result & reasoning
Market Freedoms I, Smaragda Rigakou
03/12/2018 30

31. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
3) Indistinctly Applicable Rules - “Cassis de Dijon”
Result:
Affirmed and developed Dassonville
a.34TFEU apply even if not discriminatory measures
Measures that inhibit trade because they were different from trade rules applicable in the country of origin
Lawfully marketed in one MS should be admitted in any other MS
Deregulatory effect-common standard-least demanding rules
Mutual recognition
Market Freedoms I, Smaragda Rigakou
03/12/2018 31

32. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
3) Indistinctly Applicable Rules - “Cassis de Dijon”
Reasoning:
Assertion of MS’ rights to regulate whatever not yet harmonized…
but insofar...
these rules could be justified by mandatory requirements
Market Freedoms I, Smaragda Rigakou
03/12/2018 32

33. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
3) Indistinctly Applicable Rules – Limits?
Equal- Burden rules v dual burden rules
Keck and Mithouard (Cases C-267 and 268/91)
Sunday Trading cases (Case 145/88)
Selling arrangements/Impact too indirect and uncertain
Market Freedoms I, Smaragda Rigakou
03/12/2018 33

34. 8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS Defenses to Treaty Provisions
36 TFEU for:
discriminatory measure
indistinctly applicable rules
public morality, public policy or public security;
protection of health and life of humans, animals or plants; the protection of national treasures;
protection of industrial and commercial property.
Market Freedoms I, Smaragda Rigakou
03/12/2018 34

35. 8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS Defenses to Treaty Provisions
ECJ’s mandatory requirements:
defenses only to indistinctly applicable rules
Rationale: rules that serve objectively justifiable purposes of public interest
Principle: rule of reason
List of mandatory requirements: Set out in Cassis ruling but ECJ adds new defenses
Market Freedoms I, Smaragda Rigakou
03/12/2018 35

36. 8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS Defenses to Treaty Provisions
ECJ’s mandatory requirements:
Open-ended list
consumer protection
fairness of commercial transactions
public health
pluralism of press
protection of fundamental rights
etc
Market Freedoms I, Smaragda Rigakou
03/12/2018 36

37. 8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS Defenses to Treaty Provisions
Proportionality Test
The measure must be the least restrictive possible to attain the end in view
Burden of proof
Rests with the MS invoking the defense
Strict interpretation by the ECJ
All defenses/ exceptions to the freedoms
Market Freedoms I, Smaragda Rigakou
03/12/2018 37

38. 8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS Defenses to Treaty Provisions
Proportionality Test
The rules must be:
necessary, appropriate and not excessive to satisfy aim
serve a compelling purpose of the general interest
essential for such a purpose to be attained,
i.e. The means that are the most appropriate and at the same time least hinder trade
Market Freedoms I, Smaragda Rigakou
03/12/2018 38

39. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
ECJ’s contribution to the internal market
The ECJ’s jurisprudence constituted an alternative means for ensuring the free flow of goods even in the absence of EU harmonizing legislation
Adjudicates the balance between market integration and the attainment of other societal goals when deciding on legitimacy of such defenses
Market Freedoms I, Smaragda Rigakou
03/12/2018 39

40. Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
8/12/2014
Free Movement of Goods (II) QUANTITATIVE RESTRICTIONS
Free movement of Goods and Cassis:
The Broader Perspective
Cassis fostered single market integration
Tips the balance towards a deregulated free market
Proportionality test
Mutual recognition = regulatory competition
Allocation of regulatory competence between EU and MS
Commission’s enforcement & legislative strategy
Commission’s enforcement under 258TFEU for inadmissible rules and harmonization for those rules that were still lawful under the Cassis formula
Market Freedoms I, Smaragda Rigakou
03/12/2018 40

41. 8/12/2014
CASE STUDY 2
The German Law provides for the utilization of the designation “Bier" (beer), which apply both to beer brewed in Germany and to imported beer. Under this law only beverages satisfying the production requirements set out in the same law could marketed under the designation “Bier". This provision entails merely a partial prohibition on marketing in so far as beverages not manufactured in conformity with the aforementioned manufacturing rules may be sold under other designations. The Commission has brought an action under a.258 TFEU for a declaration that, by prohibiting the marketing of beers lawfully manufactured and marketed in another member state if they do not comply with “Beer Law” on Germany has failed to fulfill its obligations under a.34 TFEU. The German Government concedes that this law was exclusively intended to protect consumers, since consumers associate the designation “Bier" with a beverage manufactured from only the raw materials listed the relevant. It deems necessary to prevent them from being misled as to the nature of the product. The German Government maintains that its rules are not protectionist in aim. What should ECJ’s ruling be?
Case 178/84, Commission v Germany
Market Freedoms I, Smaragda Rigakou
03/12/2018