1. Podpora cizojazyčného profilu výuky práva na PF UP reg. č.: CZ.1.07/2.2.00/15.0288 EU Customs Union Václav Stehlík 9/3 and 16/3/2011

2. A. Structure of the provision on the free movement of goods - art. 28-30 TFEU (23-25 TEC ) – prohibition of customs duties and measures of equivalent effect - art. 110-113 TFEU (90-93 TEC ) – prohibition of discriminatory and protectionist taxes - art. 34-37 TFEU (28-31 TEC ) – prohibition of quantitative restrictions and measures of equivalent effect

3. B. Prohibition of customs duties and measures of equivalent effect Article 28 (ex Article 23 TEC) 1. The Union shall comprise a customs union which shall cover all trade in goods and which stall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries. 2. The provisions of Article 30 and of Chapter 2 of this Title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States.

4. Article 29 (ex Article 24 TEC) Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges. Article 30 (ex Article 25 TEC) 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. Article 31 (ex Article 26 TEC) Common Customs Tariff duties shall be fixed by the Council on a proposal from the Commission.

5. Article 32 (ex Article 27 TEC) In carrying out the tasks entrusted to it under this Chapter the Commission shall be guided by: (a) the need to promote trade between Member States and third countries; (b) developments in conditions of competition within the Union in so far as they lead to an improvement in the competitive capacity of undertakings; (c) the requirements of the Union as regards the supply of raw materials and semi-finished goods; in this connection the Commission shall take care to avoid distorting conditions of competition between Member States in respect of finished goods; (d) the need to avoid serious disturbances in the economies of Member States and to ensure rational development of production and an expansion of consumption within the Union.

6. Summary – key points: –customs union –prohibition of customs duties and charges of equivalent effect –Common Customs Tariff –goods with EU origin –goods with third countries origin –direct effect – Van Gend en Loos

7. 2. The notion of „customs duties“ - customs duties – charges applicable on the import/export of goods to/from a Member State - the effect, not the purpose of the charges is important - the customs union deals with all kinds of goods Definition of „goods“: „all products which can be valued in money and which are capable of forming a subject of commercial transactions“ (7/68 Commission v Italy) What are the reasons for introducing art. 28 TFEU?

8. Reasons for introducing art. 28 TFEU: - prohibition of charges which, by altering the price of the product, has the restrictive effect on the free circulation of the product Should there be any exceptions to the prohibition of customs duties?

9. Cases - 7/68 Commission v. Italy – tax/duty on the export of artistic, historical and archaeological items - 2-3/69 Diamantarbeiders – customs duty on the imported diamonds to Belgium

10. 3. The notion of „charges of equivalent effect“ - 24/68 Commission v. Italy „ANY PECUNIARY CHARGE, HOWEVER SMALL AND WHATEVER ITS DESIGNATION AND MODE OF APPLICATION, WHICH IS IMPOSED UNILATERALLY ON DOMESTIC OR FOREIGN GOODS BY REASON OF THE FACT THAT THEY CROSS A FRONTIER, AND WHICH IS NOT A CUSTOMS DUTY IN THE STRICT SENSE, CONSTITUTES A CHARGE HAVING EQUIVALENT EFFECT … EVEN IF IT IS NOT IMPOSED FOR THE BENEFIT OF THE STATE, IS NOT DISCRIMINATORY OR PROTECTIVE IN EFFECT AND IF THE PRODUCT ON WHICH THE CHARGE IS IMPOSED IS NOT IN COMPETITION WITH ANY DOMESTIC PRODUCT.“ - charges of equivalent effect – the same rules as the prohibition of customs duties

11. Cases: 24/68 Commission v. Italy – „statistical levy“ 87/75 Bresciani – „the charges for obligatory veterinary inspections on imported cowhides at the borders “ The result: no exceptions to this prohibition

12. 18/87 Commission v. Germany - „fees for inspections on the importation of live animals based on EU law“ The inspections may be charged on condition that: - they do not exceed the actual costs of the inspections in connection with which they are charged; - the inspections in question are obligatory and uniform for all the products concerned in the Community; - they are prescribed by Community law in the general interest of the Community; - they promote the free movement of goods, in particular by neutralizing obstacles which could arise from unilateral measures of inspection adopted in accordance with art. 36 TFEU

13. Recovery of unlawful charges - Member States are obliged to return it - with respect to national procedural rules - with the exception that the trader has not passed the loss on consumers - the Member States may be liable also for the damage incurred

14. Summary: charges levied at the borders may be acceptable only if: -they are levied for a specific service for the trader -they are prescribed by EU law -they form a part of the national tax system

15. C. The prohibition of the discriminatory tax provisions 1. Treaty provisions: Article 110 (ex Article 90 TEC) 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.

16. Key points: - prohibition of discriminatory taxes - prohibition of protectionist taxes - art. 110 does not create a common tax system for MSs The aim of the art. 110: -to complement art. 28 TFEU

17. 2. What is a tax? Can a MS levy a tax on products that it does not produce? If yes,what would be the difference to the prohibition of customs duties – art. 28 TFEU? Case 193/85 Co-Frutta „tax on the importation of bananas to Italy“

18. 3. The prohibition of direct discrimination 3. The prohibition of direct discrimination 21/79 Commission v. Italy – „regenerated oil“ - taxes on the regenerated oil were lower than on the ordinary oil, not applicable for imports 196/85 Hansen – „tax reliefs on spirits“ - tax relief available to spirits made from fruit by small business must be equally applicable to similar imported spirits - tax relief available to spirits made from fruit by small business must be equally applicable to similar imported spirits 55/79 Commission v. Ireland – „tax procedure“ - domestic producers were treated more leniently as regards payment of the tax - domestic producers were treated more leniently as regards payment of the tax

19. 4. The prohibition of indirect discrimination 112/84 Humblot – „annual car tax“

20. 5. National autonomy and fiscal choices 196/85 Commission v. France – „sweet v. liqueur wines“ - sweet wines produced in a tradition manner with a lower tax – produced in areas with worse growing conditions – acceptable if not directly discriminatory 132/88 Commission v. Greece - „tax for cars“ - no direct discrimination, objectives of social policy - acceptable

21. 6. The relation between art. 110/1 and 110/2 TFEU - art. 110/1 TFEU – prohibition of discrimination - art. 110/2 TFEU – prohibition of protective taxes How to determine similarity of products?

22. Cases: 243/84 John Walker - is liqueur wine similar to whisky? - ECJ analysed: - characteristics of the product - alcohol content - manner of production - perception of products by consumers (ECJ used 110/2) 184/85 Commission v. Italy – „consumer tax on bananas“ - are bananas a similar product to other kinds of fruits? (ECJ used 110/2)

23. 170/78 Commission v. United Kingdom – „tax on beer and wine“

24. Summary: The determination of similarity: –interchangeability of products –elasticity of supply and demand (price increase) –views of the consumers

25. Questions: What is customs union? What are the measures equivalent to customs duties? Are there any exceptions to the prohibition of customs duties? What is the relationship between prohibition of customs duties and discriminatory taxes? What is a discriminative tax and protectionist tax? Could you summarize the conclusions of following cases? - 193/85 CoFrutta - 170/78 Commission v. United Kingdom

26. Reading: Craig, P, de Búrca, G: EU law text, cases and materials, Oxford UP, 4 th edition, pages 637-665 Case-law - 193/85 CoFrutta - 170/78 Commission v. United Kingdom Website:http://europa.eu/pol/cust/index_en.htm http://curia.eu

27. Thank you for your attention Thank you for your attention See you next week