EU supervisions 5/6 review
Free movement of goods
Fiscal rules:
Article 28 TFEU:
‘The Union shall comprise a customs union which shall cover all trade in goods and which shall
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’
Article 30 TFEU: no customs duties or charges having equivalent effect
An absolute prohibition which applies at the frontier
Van Gend en Loos: the Court held that it was of little importance how the increase in customs duties
occurred; the fact was that customs duties were now higher than when the EEC Treaty came into force
and so the charge contravened the Treaty
Customs duties are prohibited because they are protectionist: they make the imported good more
expensive than the rival domestic product
Article 30 also prohibits CEEs, thereby preventing Member States from circumventing the prohibition
on customs duties by dressing up the charge as something else (Statistical Levy case)
There is no de minimis rule in Article 30
On the facts of Statistical Levy, the Court found that a very small charge of 10 lire on each importer to
cover the cost of collecting trade statistics breached Article 30 because it ‘hampers the
interpenetration at which the Treaty aims and thus has an effect on the free circulation of goods
equivalent to a customs duty’
Other examples include a charge imposed for health inspections on products from other Member
States (Rewe-Zentralfinanz)
Legros: Articles 28 and 30 also apply to charged levied on the crossing of a frontier internal to a
particular Member State
‘The effect of such a regional levy on the unity of the Union customs territory is not altered by the fact
that is also charged on goods from the other parts of the territory of the Member State in question’
Overlooks the fact that Article 28 expressly states that the principle of free movement applies
exclusively between the Member States
Diamantarbeiders: customs duties were prohibited independently of any consideration of the purpose
for which they were introduced, and the destination of the revenue obtained
No account is taken of either the potentially beneficial purpose to which the charge is put, or the fact
that the money is not used to benefit the national treasury
,Article 30 has vertical direct effect
What if private parties are responsible for collecting the duties? (Dubois)
In San Giorgio, the Court ruled that a restitutionary claim was available to the trader who had paid a
customs duty or a charge having equivalent effect contrary to Union law subject to unjust enrichment
Comateb: to repay the trader the amount of the charge already received from the purchaser would be
tantamount to paying it twice over while in no way remedying the consequences for the purchaser of
the illegality of the charge
If the burden of the charge had been passed on only in part, it was for the national authorities to repay
the trader the amount which had not been passed on
The likelihood of final consumers actually reclaiming the money is minimal- they are more likely to
vote with their wallets and buy the rival (probably national) product which is not subject to these
additional costs
THEREFORE the trader could also have a claim for damages for loss of sales brought about by
having to pass on the unlawfully levied charge
The principle of national procedural autonomy applies to claims for restitution and damages with the
result that national procedural rules govern the cause of action providing they are not less favourable
than those relating to similar claims regarding national charges (the principle of non-discrimination)
and are not framed so as to render virtually impossible the exercise of rights conferred by Union law
(the principle of effectiveness)
Three permissible charges recognised in Commission v Germany:
● Payments for genuine administrative services rendered to the importer/exporter
If the payment is consideration for a genuine service of direct benefit to the importer or exporter, it is
not a CEE
For the charge to fall outside the scope of Article 30, the service must confer a specific benefit on the
individual importer/exporter
In Statistical Levy, because the statistical information was beneficial to the public as a whole, it should
have been paid for by the public (through general taxation), and not by the individual
importer/exporter
See also Bresciani: because the public as a whole benefitted, the costs had to be met out of the public
purse
The case concerned veterinary health inspections on imported raw cowhides
● Charges for inspections required by Union law
According to Commission v Germany, costs for compliance with mandatory inspections required by
Union law can be passed on to the importer
, Four conditions:
1) The charges do not exceed the actual costs of the inspections in connection with which they
are charged
2) The inspections are obligatory and uniform for all the products concerned in the Union
3) They are prescribed by Union law in the general interest of the Union
4) They promote the free movement of goods, in particular by neutralising obstacles which could
arise from unilateral measures of inspection adopted in accordance with Article 36
● Charges falling within the scope of internal taxation
Article 110 TFEU: no discriminatory or protective taxation levied internally within a state
Article 110(1) TFEU prohibits discriminatory taxation in respect of goods which are similar
If the Court finds that the products are not similar, it then considers Article 110(2), which concerns
products in competition
The principle of fiscal autonomy/sovereignty
Member States are free to determine their own schemes of taxation
Considerable discretion to determine the content of their own taxation policy
Union law does not restrict the freedom of each Member State to lay down tax arrangements which
differentiated between certain products on the basis of objective criteria (unrelated to origin), such as
the nature of the raw materials used (the Johnnie Walker case)
Article 110 is therefore essentially permissive
It allows Member States both to raise revenue by taxation and to determine the content of their own
taxation policy
If the Court senses that the policy choices guiding the taxation decisions are underpinned by
discrimination on the grounds of origin, it will apply Article 110
e.g., see the line of cases concerning the taxation of alcoholic drinks where, for instance, the UK taxed
beer more leniently than wine
The Court suspected that the national taxation scheme favoured national products to the detriment of
similar or potentially equivalent products produced elsewhere, and so applied Article 110
Article 110(1)
Article 110(1) prohibits the host Member State from imposing a higher tax on goods imported into the
Member State than on similar domestic goods
A broad test is applied which combines a factual comparison of the products with an economic
analysis of their use
Commission v Denmark: ‘it is necessary first to consider certain objective characteristics of both
categories of beverages, such as their origin, the method of manufacture and their organoleptic
Free movement of goods
Fiscal rules:
Article 28 TFEU:
‘The Union shall comprise a customs union which shall cover all trade in goods and which shall
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’
Article 30 TFEU: no customs duties or charges having equivalent effect
An absolute prohibition which applies at the frontier
Van Gend en Loos: the Court held that it was of little importance how the increase in customs duties
occurred; the fact was that customs duties were now higher than when the EEC Treaty came into force
and so the charge contravened the Treaty
Customs duties are prohibited because they are protectionist: they make the imported good more
expensive than the rival domestic product
Article 30 also prohibits CEEs, thereby preventing Member States from circumventing the prohibition
on customs duties by dressing up the charge as something else (Statistical Levy case)
There is no de minimis rule in Article 30
On the facts of Statistical Levy, the Court found that a very small charge of 10 lire on each importer to
cover the cost of collecting trade statistics breached Article 30 because it ‘hampers the
interpenetration at which the Treaty aims and thus has an effect on the free circulation of goods
equivalent to a customs duty’
Other examples include a charge imposed for health inspections on products from other Member
States (Rewe-Zentralfinanz)
Legros: Articles 28 and 30 also apply to charged levied on the crossing of a frontier internal to a
particular Member State
‘The effect of such a regional levy on the unity of the Union customs territory is not altered by the fact
that is also charged on goods from the other parts of the territory of the Member State in question’
Overlooks the fact that Article 28 expressly states that the principle of free movement applies
exclusively between the Member States
Diamantarbeiders: customs duties were prohibited independently of any consideration of the purpose
for which they were introduced, and the destination of the revenue obtained
No account is taken of either the potentially beneficial purpose to which the charge is put, or the fact
that the money is not used to benefit the national treasury
,Article 30 has vertical direct effect
What if private parties are responsible for collecting the duties? (Dubois)
In San Giorgio, the Court ruled that a restitutionary claim was available to the trader who had paid a
customs duty or a charge having equivalent effect contrary to Union law subject to unjust enrichment
Comateb: to repay the trader the amount of the charge already received from the purchaser would be
tantamount to paying it twice over while in no way remedying the consequences for the purchaser of
the illegality of the charge
If the burden of the charge had been passed on only in part, it was for the national authorities to repay
the trader the amount which had not been passed on
The likelihood of final consumers actually reclaiming the money is minimal- they are more likely to
vote with their wallets and buy the rival (probably national) product which is not subject to these
additional costs
THEREFORE the trader could also have a claim for damages for loss of sales brought about by
having to pass on the unlawfully levied charge
The principle of national procedural autonomy applies to claims for restitution and damages with the
result that national procedural rules govern the cause of action providing they are not less favourable
than those relating to similar claims regarding national charges (the principle of non-discrimination)
and are not framed so as to render virtually impossible the exercise of rights conferred by Union law
(the principle of effectiveness)
Three permissible charges recognised in Commission v Germany:
● Payments for genuine administrative services rendered to the importer/exporter
If the payment is consideration for a genuine service of direct benefit to the importer or exporter, it is
not a CEE
For the charge to fall outside the scope of Article 30, the service must confer a specific benefit on the
individual importer/exporter
In Statistical Levy, because the statistical information was beneficial to the public as a whole, it should
have been paid for by the public (through general taxation), and not by the individual
importer/exporter
See also Bresciani: because the public as a whole benefitted, the costs had to be met out of the public
purse
The case concerned veterinary health inspections on imported raw cowhides
● Charges for inspections required by Union law
According to Commission v Germany, costs for compliance with mandatory inspections required by
Union law can be passed on to the importer
, Four conditions:
1) The charges do not exceed the actual costs of the inspections in connection with which they
are charged
2) The inspections are obligatory and uniform for all the products concerned in the Union
3) They are prescribed by Union law in the general interest of the Union
4) They promote the free movement of goods, in particular by neutralising obstacles which could
arise from unilateral measures of inspection adopted in accordance with Article 36
● Charges falling within the scope of internal taxation
Article 110 TFEU: no discriminatory or protective taxation levied internally within a state
Article 110(1) TFEU prohibits discriminatory taxation in respect of goods which are similar
If the Court finds that the products are not similar, it then considers Article 110(2), which concerns
products in competition
The principle of fiscal autonomy/sovereignty
Member States are free to determine their own schemes of taxation
Considerable discretion to determine the content of their own taxation policy
Union law does not restrict the freedom of each Member State to lay down tax arrangements which
differentiated between certain products on the basis of objective criteria (unrelated to origin), such as
the nature of the raw materials used (the Johnnie Walker case)
Article 110 is therefore essentially permissive
It allows Member States both to raise revenue by taxation and to determine the content of their own
taxation policy
If the Court senses that the policy choices guiding the taxation decisions are underpinned by
discrimination on the grounds of origin, it will apply Article 110
e.g., see the line of cases concerning the taxation of alcoholic drinks where, for instance, the UK taxed
beer more leniently than wine
The Court suspected that the national taxation scheme favoured national products to the detriment of
similar or potentially equivalent products produced elsewhere, and so applied Article 110
Article 110(1)
Article 110(1) prohibits the host Member State from imposing a higher tax on goods imported into the
Member State than on similar domestic goods
A broad test is applied which combines a factual comparison of the products with an economic
analysis of their use
Commission v Denmark: ‘it is necessary first to consider certain objective characteristics of both
categories of beverages, such as their origin, the method of manufacture and their organoleptic
