Understanding Quantitative Restrictions in EU Internal Market, Study notes of Law

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Session 3

Free Movement of Goods

in the EU internal market.

Congratulations!

Your imports or exports from / to another member- state cleared customs.

No duties / tariffs to pay! (see session 2)

But is there anything else to worry about?

Topic outline

1. What is the internal market?
2. Treaty provisions prohibiting member-states to impose quantitative restrictions and charges having equivalent effect as barriers to trade.
3. Uses and abuses of the prohibition.
4. Examples of national trade measures

not allowed.

4. Examples when member-states are allowed

to restrict or prohibit the free movement of goods.

What is the internal market?

• A Common Market was established in 1957 between

member states.

• Internal market is a term adopted in 1986

to signal the deeper and more intensive nature of trade and economic integration between the member states.

• In other words: the national markets of the member states are integrated in ONE internal market for all of them.

CU: law-makers and Free Movement of Goods

in the EU internal market

PROHIBITION OF QUANTITATIVE RESTRICTIONS

(QRs) and OF MEASURES HAVING EQUIVALENT EFFECT (MHEE to QR) ON TRADE BETWEEN MEMBER STATES Art. 34, 35, 36 TFEU (see notespage)

QR & MHEE to QR on imports & exports

are prohibited.

• Quantitative restrictions on imports and measures having equivalent effect shall be prohibited between member-states.
• Quantitative restrictions on exports and all measures having equivalent effect, shall be prohibited between member states. (Articles Art. 34 & Art. 35 TFEU)

What are Measures Having

Equivalent Effect to QR (MHEEtoQRs)

• Mr. Dassonville imported Scotch whisky from France into Belgium.
• Belgian law requires a certificate of origin to prove the authenticity of the Scotch whisky.
• This certificate can only be obtained in Scotland.

Questions

• Is Mr. Dassonville breaking the law? What do you think?

Is Mr. Dassonville breaking the law?

• On the face of it, yes.
• But he bought the whisky in France and imported it into Belgium = legitimate free movement of goods between Britain – France – Belgium.
• France did not require a certificate.
• Should Mr. Dassonville go all the way to Scotland to try and get the certificate before moving the whisky to Belgium?
• And if the certificate is no longer available in Scotland?

What constitutes a state measure prohibited

under Art. 34 & 35 TFEU?

Are ‘buy national products’ campaigns a prohibited MHEE? NO, if campaign conducted by private bodies. YES, if campaign conducted by the state. What exactly is the state?

• The Irish Goods Council?
• The Apple and Pear Development Council?
• The Pharmaceutical Society? YES, because of statutory (by law) link to the state. (see details in notespage).

So, how do we know what constitutes

QR and MHEE to QR?

• Directive 70/50/EEC Guidance as to what constitutes QR and MHEEtoQRS of value in identifying prohibited acts or conduct; non-exhaustive list of MEQRs
• ECJ developed the concepts of
  • Distinctly applicable measures.
  • Indistinctly applicable measures

Indistinctly applicable measures

These are tricky to identify! They appear lawful because they do not distinguish / discriminate between national and imported goods. They apply to both BUT have a harsher effect on imported goods.

Examples of indistinctly applicable

(non-discriminatory) measures

• Origin marking (UK).
• National quality standard (Irish water pipes case)
• Administrative practices (approval of postal franking machines)
• Price-fixing (selling below minimum proce required by law)
• See notespage for details.

Landmark case: Cassis de Dijon

see notespage for Court extract.

The Court ruled that there was no valid reason that a product lawfully marketed in one member state should not be introduced in another member state. Principle of mutual recognition.

Result: wide opening of the gates for intra-Community trade.

Dual burden measures

Cassis is example of dual-burden rules: rules apply to both domestic and imported goods but affect imported goods because manufacturer would have to comply with rules of state of origin AND rules of import state Two sets of rules = dual burden.

Another example: Belgian law that margarine be packed in cube shaped containers so consumers do not confuse it with butter. ( Walter Rau Lebensmittelwerke v De Smedt PVBA Case 261/81)