Liam Coninx Law of the Internal Market
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
WEEK 2: FREE MOVEMENT OF GOODS: QUANTITATIVE
RESTRICTIONS
Case 1 – Written Assignment (not graded, but must be submitted)
Considering global crises, war in Ukraine, and inflation, businesses are not doing great.
Very few movies or TV programmes have been shot in Dubrovnik in the past two years,
but after the recent success of the HBO series “House of the Dragon”, recordings are
picking up steam.
To supplement the company’s income, Ms Bosak decided to sell some of the props
that are less valuable for her to keep in the warehouse through a webshop. Livia decides
that certain weapon-related props will be suitable for this type of online sales, and she
sells a consignment of assorted prop weapons to a Dutch movie company under Talpa
entertainment – shooting a new spin-off series of Game of Thrones. J. De Mol, the owner
of the Dutch entertainment company, is among the first clients of Ms Bosak and requests
a bill in Dutch. This bill is required because tax rules in the Netherlands only allow for
Dutch bills to be submitted to the tax authorities. Although Livia would love to give Mr. De
Mol the bill in Dutch, according to Croatian law she can only issue bills in either Croatian
or English, hence not in Dutch. Ms Bosak also decided to do something about the
costumes in the warehouse.
For the same movie production with Talpa Entertainment, Ms Bosak sends a
consignment of clothes, which also include several replicas of iconic medieval dresses.
As the show is to be recorded in Germany, Livia sent the clothes to the German subsidiary
of Talpa but is confronted with a problem. The replicas are loosely based on exhibited
pieces of clothing in the Museum of Croatian Fashion Design – yet they are made with real
materials and sewn-in gold and silver plating.
After the production ends, the German subsidiary company would like to sell the replicas
but is confronted with a problem: the German Consumer Protection Agency wants to
confiscate the replicas, as, according to the inspector, the silver and gold plates are not
hallmarked and therefore miss the German hallmark indicating the purity of the gold or
silver. Confused, Mr. De Mol requests information from Livia and she explains to him that
in Croatia gold or silver that is intended to be (part of) a clothing item does not need to
be hallmarked. The German inspector asserts that in Germany, all pieces of gold and
silver need to be hallmarked.
At home in Dubrovnik, Ms Bosak comes up with another business venture. While the
movie production on the open-air shoots is slowly restarting, indoor shoots are subject to
very strict hygiene obligations. During her trip to Paris, she came across a portable air
filter in her hotel lobby. The filters produced by the French company Breath of French
Air, are scientifically proven to effectively viral particles from the air. Ms Bosak
immediately buys 100 of these portable air filters to rent out to movie productions in
Dubrovnik. She is excited when the container with the filters arrives, however, the
excitement quickly drops. She finds out that these filters cannot be used on movie sets in
Croatia, because this filter system does not fulfil the hygiene standards that are set by
the Croatian Health Board. It is prohibited to use air filters that do not fulfil the Croatian
Health Board standards in working environments by Croatian occupational health and
safety laws.
Finally, Ms Bosak resorts to selling pregnancy self-tests in a web-shop. This venture is
more successful, and she sells thousands of self-tests in Croatia, leading her to expand
her business and have her web-shop also cater to customers in the neighbouring states of
Hungary and Slovenia. Once the web-shop is reprogrammed, translated and promoted
though Google-ads in those countries, she receives an email from the Hungarian Ministry
of Health. She is informed that in Hungary, pregnancy self-tests may not be sold online,
since they must be sold in specialised shops or pharmacies with in-person service.
1
,Liam Coninx Law of the Internal Market
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
First Issue
Applicability of EU Law and qualification as goods
Out of the Treaty of the European Union we can conclude that both Croatia and the
Netherlands are member states of the EU. This means that the treaties shall apply to both
Croatia and the Netherlands.1
In order to qualify the props as a good, we have to look at the definition of the Art
Treasury case that states that the item should (i) be able to be valued in money, and (ii)
be able to be a subject to a commercial transaction; which in this specific case are both
fulfilled because props can be sold online for money and for which in the specific case
Talpa also wants to pay money in order to obtain them. 2
Lastly we also look at whether or not this item falls under one of the exceptions, being (i)
that it is gained by winning3, and (ii) that it is something given by the State 4, which for
this specific case are both not applicable.
For this, we can conclude that Croatia and the Netherlands are both members of the
European Union and therefor should follow the rules regarding the free movement of
goods because, looking at the Art Treasures case, weapon-related props are a good in the
context of free movement of goods.
The applicability of quantitative restrictions and measures having equivalent
effect
In regards of Articles 34 and 35 TFEU, both quantitative restrictions on imports and
exports are prohibited between Member States, as well as all the measures having
equivalent effect.
Looking at this specific case we can conclude that Ms Bosak is exporting goods from
Croatia to the Netherlands, which leads to the question whether or not there is a
quantitative restriction, or a measure having equivalent effect, on this specific export.
Due to the fact that these billing rules are a globally set law within Croatia, it can not be
seen as a quantitative restriction5, which does not mean it is legal because it can still be a
measure having equivalent effect.
When it comes to MEQR’s on exports, we have to take a look at Art. 35 TFEU in
combination with the Gysbrechts case which confirmed that Art. 35 TFEU applied to
national measures, whether or not they are discriminatory. This case also created the
definition that states: ‘measures having equivalent effect to quantitative restrictions on
exports are measures which have the effect of restricting exports and which create a
difference in treatment between trade within a Member State and exports’. 6
In regards of this definition we can conclude that there, for this specific issue, is a
measures having equivalent effect to quantitative restrictions on exports because (i) the
billing law had a restricting effect on the exports of the products, and (ii) this billing law
does create a difference in treatment because bills can only be made in two possible
languages.
1
Art. 52, 1 Treaty on European Union.
2
Commission of the European Communities v Italian Republic (Art Treasures) [1968] ECR
424 CJEC.
3
Her Majesty’s Customs and Excise v Schindler [1994] 1 ECR I-1078 CJEU.
4
Jägerskiöld v Gustafsson [1999] 1 ECR I-7332 CJEU.
5
Riseria Luigi Geddo v Ente Nazionale Risi (Geddo) [1973 ECR 865 CJEU.
6
Gysbrechts and Santurel Inter BVBA [2008] CJEU C-205/07, [2008] 1 ECR I-9979.
2
, Liam Coninx Law of the Internal Market
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
Different types of measures having equivalent effect to quantitative
restrictions
When it comes to the MEQR’s, there are two types: there are either Measure that are
distinctly applicable, or indistinctly applicable.
Where the distinctly applicable MEQR’s are any national measure that discriminates
directly against imported goods7, indistinctly applicable MEQR’s are measures that are
indirectly discriminatory or hinders/inhibits market access 8.
We can conclude that in this specific case we are having an indistinctly applicable MEQR
because; although the billing rules set by the Croatian Law apply to all nationalities, and
not just the Dutch, there is still an indirect discrimination because it is much easier for
domestic procedures to follow these billing rules.
Justification
Although there is a breach of Article 35 TFEU, there are still two ways to justify it.
First we have the general justification which is stated in Article 36 TFEU which allows
justification due to public policy9, public morality10, public security11, public health of
humans, animals and/or plants, protection of industrial and commercial property, or
protection of national treasures, if the discrimination is not arbitrary and is proportionate
to the aim, and if there is respect for the fundamental rights.
Secondly, there is the Rule of Reason which states that IAMEQR’s can be justified if four
conditions are met:
1. There is no harmonization on the topic;
2. There is an indistinctly applicable rule;
3. There is a mandatory requirement in the public interest; and
4. The restriction is proportionate.
Looking at the justifications, we can conclude that there are no justifications possible. Art.
36 TFEU is not applicable because non of the grounds relate to this specific case, just like
the Rule of Reason is not applicable because, although the conditions of no harmonization
and indistinctly applicable rule are fulfilled, the law is not a mandatory requirement in the
public interest, nor a proportionate restriction because there is a better alternative, such
as making the law in a way that different languages are possible as long as there is
always a Croatian version attached to it.
Conclusion
Looking back at all the facts stated above, we can conclude that the Croatian Law
regarding the billing procedure is a violation of the free movement of goods as stated in
Art. 35 TFEU because Ms Bosak is being obligated to make the export bill in Croatian or
English without any justifications for this rule.
7
Art. 2 Directive based on the provisions of Article 33 (7), on the abolition of measures
which have an effect equivalent to quantitative restrictions on imports and are not
covered by other provisions adopted in pursuance of the EEC Treaty [1969] OJ L 13/29/17;
Procureur du Roi v Benoît and Gustave Dassonville [1974] ECR 838 CJEC.
8
Art. 3 Directive based on the provisions of Article 33 (7), on the abolition of measures
which have an effect equivalent to quantitative restrictions on imports and are not
covered by other provisions adopted in pursuance of the EEC Treaty [1969] OJ L 13/29/17;
Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon) [1979]
ECR 350 CJEC.
9
Regina v Ernest George Thompson (Thompson) [1978] ECR 2248 CJEC.
10
Regina v Maurice Donald Henn and John Frederick Ernest Darby (Henn & Darby) [1979]
ECR 3797 CJEC; Conegate Limited v HM Customs & Excise (Conegate) [1986] ECR 1017
CJEC.
11
Campus Oil Limited a.o. v Minister for Industry and Energy a.o. (Campus Oil) [1984] ECR
2730 CJEC.
3
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
WEEK 2: FREE MOVEMENT OF GOODS: QUANTITATIVE
RESTRICTIONS
Case 1 – Written Assignment (not graded, but must be submitted)
Considering global crises, war in Ukraine, and inflation, businesses are not doing great.
Very few movies or TV programmes have been shot in Dubrovnik in the past two years,
but after the recent success of the HBO series “House of the Dragon”, recordings are
picking up steam.
To supplement the company’s income, Ms Bosak decided to sell some of the props
that are less valuable for her to keep in the warehouse through a webshop. Livia decides
that certain weapon-related props will be suitable for this type of online sales, and she
sells a consignment of assorted prop weapons to a Dutch movie company under Talpa
entertainment – shooting a new spin-off series of Game of Thrones. J. De Mol, the owner
of the Dutch entertainment company, is among the first clients of Ms Bosak and requests
a bill in Dutch. This bill is required because tax rules in the Netherlands only allow for
Dutch bills to be submitted to the tax authorities. Although Livia would love to give Mr. De
Mol the bill in Dutch, according to Croatian law she can only issue bills in either Croatian
or English, hence not in Dutch. Ms Bosak also decided to do something about the
costumes in the warehouse.
For the same movie production with Talpa Entertainment, Ms Bosak sends a
consignment of clothes, which also include several replicas of iconic medieval dresses.
As the show is to be recorded in Germany, Livia sent the clothes to the German subsidiary
of Talpa but is confronted with a problem. The replicas are loosely based on exhibited
pieces of clothing in the Museum of Croatian Fashion Design – yet they are made with real
materials and sewn-in gold and silver plating.
After the production ends, the German subsidiary company would like to sell the replicas
but is confronted with a problem: the German Consumer Protection Agency wants to
confiscate the replicas, as, according to the inspector, the silver and gold plates are not
hallmarked and therefore miss the German hallmark indicating the purity of the gold or
silver. Confused, Mr. De Mol requests information from Livia and she explains to him that
in Croatia gold or silver that is intended to be (part of) a clothing item does not need to
be hallmarked. The German inspector asserts that in Germany, all pieces of gold and
silver need to be hallmarked.
At home in Dubrovnik, Ms Bosak comes up with another business venture. While the
movie production on the open-air shoots is slowly restarting, indoor shoots are subject to
very strict hygiene obligations. During her trip to Paris, she came across a portable air
filter in her hotel lobby. The filters produced by the French company Breath of French
Air, are scientifically proven to effectively viral particles from the air. Ms Bosak
immediately buys 100 of these portable air filters to rent out to movie productions in
Dubrovnik. She is excited when the container with the filters arrives, however, the
excitement quickly drops. She finds out that these filters cannot be used on movie sets in
Croatia, because this filter system does not fulfil the hygiene standards that are set by
the Croatian Health Board. It is prohibited to use air filters that do not fulfil the Croatian
Health Board standards in working environments by Croatian occupational health and
safety laws.
Finally, Ms Bosak resorts to selling pregnancy self-tests in a web-shop. This venture is
more successful, and she sells thousands of self-tests in Croatia, leading her to expand
her business and have her web-shop also cater to customers in the neighbouring states of
Hungary and Slovenia. Once the web-shop is reprogrammed, translated and promoted
though Google-ads in those countries, she receives an email from the Hungarian Ministry
of Health. She is informed that in Hungary, pregnancy self-tests may not be sold online,
since they must be sold in specialised shops or pharmacies with in-person service.
1
,Liam Coninx Law of the Internal Market
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
First Issue
Applicability of EU Law and qualification as goods
Out of the Treaty of the European Union we can conclude that both Croatia and the
Netherlands are member states of the EU. This means that the treaties shall apply to both
Croatia and the Netherlands.1
In order to qualify the props as a good, we have to look at the definition of the Art
Treasury case that states that the item should (i) be able to be valued in money, and (ii)
be able to be a subject to a commercial transaction; which in this specific case are both
fulfilled because props can be sold online for money and for which in the specific case
Talpa also wants to pay money in order to obtain them. 2
Lastly we also look at whether or not this item falls under one of the exceptions, being (i)
that it is gained by winning3, and (ii) that it is something given by the State 4, which for
this specific case are both not applicable.
For this, we can conclude that Croatia and the Netherlands are both members of the
European Union and therefor should follow the rules regarding the free movement of
goods because, looking at the Art Treasures case, weapon-related props are a good in the
context of free movement of goods.
The applicability of quantitative restrictions and measures having equivalent
effect
In regards of Articles 34 and 35 TFEU, both quantitative restrictions on imports and
exports are prohibited between Member States, as well as all the measures having
equivalent effect.
Looking at this specific case we can conclude that Ms Bosak is exporting goods from
Croatia to the Netherlands, which leads to the question whether or not there is a
quantitative restriction, or a measure having equivalent effect, on this specific export.
Due to the fact that these billing rules are a globally set law within Croatia, it can not be
seen as a quantitative restriction5, which does not mean it is legal because it can still be a
measure having equivalent effect.
When it comes to MEQR’s on exports, we have to take a look at Art. 35 TFEU in
combination with the Gysbrechts case which confirmed that Art. 35 TFEU applied to
national measures, whether or not they are discriminatory. This case also created the
definition that states: ‘measures having equivalent effect to quantitative restrictions on
exports are measures which have the effect of restricting exports and which create a
difference in treatment between trade within a Member State and exports’. 6
In regards of this definition we can conclude that there, for this specific issue, is a
measures having equivalent effect to quantitative restrictions on exports because (i) the
billing law had a restricting effect on the exports of the products, and (ii) this billing law
does create a difference in treatment because bills can only be made in two possible
languages.
1
Art. 52, 1 Treaty on European Union.
2
Commission of the European Communities v Italian Republic (Art Treasures) [1968] ECR
424 CJEC.
3
Her Majesty’s Customs and Excise v Schindler [1994] 1 ECR I-1078 CJEU.
4
Jägerskiöld v Gustafsson [1999] 1 ECR I-7332 CJEU.
5
Riseria Luigi Geddo v Ente Nazionale Risi (Geddo) [1973 ECR 865 CJEU.
6
Gysbrechts and Santurel Inter BVBA [2008] CJEU C-205/07, [2008] 1 ECR I-9979.
2
, Liam Coninx Law of the Internal Market
Schakelstudent rechten Tutor: Job VAN BEKHOVEN
Different types of measures having equivalent effect to quantitative
restrictions
When it comes to the MEQR’s, there are two types: there are either Measure that are
distinctly applicable, or indistinctly applicable.
Where the distinctly applicable MEQR’s are any national measure that discriminates
directly against imported goods7, indistinctly applicable MEQR’s are measures that are
indirectly discriminatory or hinders/inhibits market access 8.
We can conclude that in this specific case we are having an indistinctly applicable MEQR
because; although the billing rules set by the Croatian Law apply to all nationalities, and
not just the Dutch, there is still an indirect discrimination because it is much easier for
domestic procedures to follow these billing rules.
Justification
Although there is a breach of Article 35 TFEU, there are still two ways to justify it.
First we have the general justification which is stated in Article 36 TFEU which allows
justification due to public policy9, public morality10, public security11, public health of
humans, animals and/or plants, protection of industrial and commercial property, or
protection of national treasures, if the discrimination is not arbitrary and is proportionate
to the aim, and if there is respect for the fundamental rights.
Secondly, there is the Rule of Reason which states that IAMEQR’s can be justified if four
conditions are met:
1. There is no harmonization on the topic;
2. There is an indistinctly applicable rule;
3. There is a mandatory requirement in the public interest; and
4. The restriction is proportionate.
Looking at the justifications, we can conclude that there are no justifications possible. Art.
36 TFEU is not applicable because non of the grounds relate to this specific case, just like
the Rule of Reason is not applicable because, although the conditions of no harmonization
and indistinctly applicable rule are fulfilled, the law is not a mandatory requirement in the
public interest, nor a proportionate restriction because there is a better alternative, such
as making the law in a way that different languages are possible as long as there is
always a Croatian version attached to it.
Conclusion
Looking back at all the facts stated above, we can conclude that the Croatian Law
regarding the billing procedure is a violation of the free movement of goods as stated in
Art. 35 TFEU because Ms Bosak is being obligated to make the export bill in Croatian or
English without any justifications for this rule.
7
Art. 2 Directive based on the provisions of Article 33 (7), on the abolition of measures
which have an effect equivalent to quantitative restrictions on imports and are not
covered by other provisions adopted in pursuance of the EEC Treaty [1969] OJ L 13/29/17;
Procureur du Roi v Benoît and Gustave Dassonville [1974] ECR 838 CJEC.
8
Art. 3 Directive based on the provisions of Article 33 (7), on the abolition of measures
which have an effect equivalent to quantitative restrictions on imports and are not
covered by other provisions adopted in pursuance of the EEC Treaty [1969] OJ L 13/29/17;
Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein (Cassis de Dijon) [1979]
ECR 350 CJEC.
9
Regina v Ernest George Thompson (Thompson) [1978] ECR 2248 CJEC.
10
Regina v Maurice Donald Henn and John Frederick Ernest Darby (Henn & Darby) [1979]
ECR 3797 CJEC; Conegate Limited v HM Customs & Excise (Conegate) [1986] ECR 1017
CJEC.
11
Campus Oil Limited a.o. v Minister for Industry and Energy a.o. (Campus Oil) [1984] ECR
2730 CJEC.
3
