Law of the internal market
L 1: INTERNAL MARKET / FREE MOVEMENT OF GOODS: FINANCIAL RESTRICTIONS
WHAT IS AN INTERNAL MARKET?
Art 26 TFEU: “The internal market shall comprise an area without internal frontiers in which the free movement of
goods, persons, services and capital is ensured in accordance with the provisions of the Treaties”.
[CJEU Schul Douane Expediteur BV v. Inspecteur der Invoerrechten en Accijnzen, 1982]
para. 33: “Such an interpretation accord with the need to take account of the objectives of the treaty which are laid
down in art 2 and 3 among which appears, in the first place the establishment of a common market. The concept of a
common market as defined by intra-community trade in order to merge the national markets into a single market
bringing about conditions as close as possible to those of a genuine internal market. It is important that not only
commerce as such but also private persons who happen to be conducting an economic transaction across national
frontiers should be able to enjoy the benefits of that market.”
Internal market - essential elements [CJEU Schul]:
• As close as possible to a domestic market
• Removal of all obstacles (relates to functioning)
The golden idea of the internal market, to set up rules in such a way that a market can function in certain way
WHY AN INTERNAL MARKET?
Instrumental function: 2 TEU
Essence of European integration process Peace
How assure peace through an internal market? cooperation: if u need each other, you won’t start a war,
you create interdependence [=onderlinge afhankelijkheid].
Why we don’t fight against Russia together with Ukraine? Because we need Russia for so many things. The
interdependence is also outsid²e the EU. When people are happy/content, they are less likely to start a fight. If there is
a crisis like in Greece, then you have more colorizing opinions. That can be a breeding ground for a new war.
Internal market is a tool, in a toolbox of EU in order to achieve the goals of the EU.
Art 3(3) TEU: “The Union shall establish an internal market. It shall work for…
– Economic growth and price stability
– Highly competitive social market economy
– Full employment and social progress
– Protection and improvement of environment
– Etc.
As an instrument (to achieve certain goals) the internal market works as follows:
• Increases availability and the quality of factors of production
• Enhanced ↑ efficiency in production
• Increased production levels
• Improved international position
How we achieve higher standard in the EU with internal market?
Comparative benefits (classical economic: Ricardo)
1
, Countries need to specialise in products where they are the best. If u trade between 2 countries and when they
specialises on the products they can produce the best, the total amount of the produces products of both countries
increase for both countries. Economic growth out of nothing.
Invisible hand (classical economic: Smith)
When people pursue their own interest on the free internal market, the perfect society arises, like if there was an
invisible hand above all. + supply & demand curve
Why create free movement of GPSC? Why those 4?
Cause they are economic handy. These are the 4 factors of production. We want to create a situation that comes as
close as a national market (Ricardo). It gives an invisible multiplying.
Political view: It gives also an improved international position towards other international blocks.
Fortress Europe: protect our market, the walls should be solid.
HOW DOES THE INTERNAL MARKET WORK?
Internal Market is created through:
• Negative integration (prohibition of barriers) in this course
• Positive integration (coordination/harmonisation/common policies)
o Rules for products for e.g. jam. Sit together and set up rules, but harmonization cost a lot of
time.
o Result mutual recognition
Integration removal of barriers
What are barriers? Barriers may result from:
• Discrimination on nationality (dual burden [=last] in law)
o Distinctly [=duidelijk] applicable rules
o Direct discrimination
• Different effect of legislation (equal burden in law; different burden in fact)
o Indistinctly applicable rules
o Indirect discrimination
• Non-discrimination (equal burden in law; equal burden in fact)
French producer want import a product to Netherlands. The law in NL is that you have to fill in forms when you want to
import, Dutch producers don’t need to do that = discrimination on nationality.
When all countries need to fill in the form and the forms are available in all languages of EU, it seems okay. But then
French producer says, in my country I don’t have to do that. So he needs to make extra effort, so the effect of that rule
still ways heavier for the French producer. = indirect discrimination
Mutual recognition: forms are a barrier, if some countries don’t have it, the other ones should leave out them as well.
Reverse discrimination: Dutch producers will still have to fill in the forms even though French producers wouldn’t have
to base on the mutual recognition.
Direct discrimination through state measures is prohibited on the basis of the Treaty.
Justifications are only possible on the basis of the Treaty.
Indirect/Non-discrimination is prohibited on the basis of case law.
Justifications are possible on the basis of the Treaty and case law.
Prohibition/justifications of Direct discrimination Prohibition/justifications of indirect/non-discrimination
• Goods Art 34-35 (pro.) and 36 (just.) • Goods [ECJ Cassis de Dijon, 1979]
• Workers Art 45 (pro. and just.) • Workers [ECJ Kraus, 1993; ECJ Bosman 1995]
• Establishment Art 49 (pro) + 51-52 (just.) • Services [ECJ Säger, 1991]
• Services Art 56 (pro.) and 61 (just.) • Establishment [ECJ Gebhard, 1995]
• Capital Art 63 (pro.) and 65 (just.) • Capital [ECJ Svensson, 1995]
2
, FREE MOVEMENT OF GOODS
Relevant Treaty Articles:
• 26 TFEU: Internal market
• 28 TFEU: Customs Union
• 29 TFEU: ‘Free Circulation’
• 30 TFEU: Prohibition of Duties & Charges having equivalent effect
• 34-35 TFEU: Prohibition of Quotas & Measures having equivalent effect
• 36 TFEU: Exceptions on the prohibitions of articles 34 & 35 TFEU
• 110 TFEU: Internal Taxation
28 TFEU: Customs union Free movement of Goods:
• Def.: foundation of the EU and essential to the functioning of the single market, with the implication that the
27 MS must act as they were one.
• Difference between free trade area and customs union: common extern policy
• Originating in Member States
• Goods from Third Countries which are in free circulation
• No extension of cu benefits for TC:
o [CJEU Bouhelier]
o [CJEU EMI]
o [CJEU Polydor]
• WTO treaty: most favourite nation treatment for all the other trading partners (=non-discrimination clause)
Definition Goods [CJEU Commission v Italy (Art Treasures)]
“All products which can be valued in money and which are capable of forming the subject of a commercial
transaction”
But not qualified as goods (limits):
[CJEU Jagerskiold v Gustafsson: Fishing License]
[CJEU Schindler: Lottery Tickets]
A right of something that you have is not a good.
29 TFEU: Goods in free circulation:
“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.“ (= you have to pass through the gates of fortress Europe)
Customs duty: what’s the reason for import duties when u order things from outside the EU. It is a mechanism that
government (EU) uses to make it less attractive for us to buy outside the EU. (= protectionism) It is not applied within
the EU herself.
There is no such thing as “free circulation of persons”!
Since Schengen there are no border controls anymore free movement
FINANCIAL RESTRICTIONS
Prohibition of CD & CEE:
• Real CD are extinct between MS See eg [CJEU Van Gend & Loos] which concerned a
violation of the standstill clause on Import Duties in old article 12 EEC now art 30 TFEU.
• Focus lies on “CEE” that create a similar barrier to trade to customs duties
• MS are creative in camouflaging “import duties” in all kinds of measures.
• There are no financial restrictions anymore in the EU.
• But there is still a level of protection between MS’s.
Definition CEE [CJEU Commission v Italy (Statistical Levy)]:
3
L 1: INTERNAL MARKET / FREE MOVEMENT OF GOODS: FINANCIAL RESTRICTIONS
WHAT IS AN INTERNAL MARKET?
Art 26 TFEU: “The internal market shall comprise an area without internal frontiers in which the free movement of
goods, persons, services and capital is ensured in accordance with the provisions of the Treaties”.
[CJEU Schul Douane Expediteur BV v. Inspecteur der Invoerrechten en Accijnzen, 1982]
para. 33: “Such an interpretation accord with the need to take account of the objectives of the treaty which are laid
down in art 2 and 3 among which appears, in the first place the establishment of a common market. The concept of a
common market as defined by intra-community trade in order to merge the national markets into a single market
bringing about conditions as close as possible to those of a genuine internal market. It is important that not only
commerce as such but also private persons who happen to be conducting an economic transaction across national
frontiers should be able to enjoy the benefits of that market.”
Internal market - essential elements [CJEU Schul]:
• As close as possible to a domestic market
• Removal of all obstacles (relates to functioning)
The golden idea of the internal market, to set up rules in such a way that a market can function in certain way
WHY AN INTERNAL MARKET?
Instrumental function: 2 TEU
Essence of European integration process Peace
How assure peace through an internal market? cooperation: if u need each other, you won’t start a war,
you create interdependence [=onderlinge afhankelijkheid].
Why we don’t fight against Russia together with Ukraine? Because we need Russia for so many things. The
interdependence is also outsid²e the EU. When people are happy/content, they are less likely to start a fight. If there is
a crisis like in Greece, then you have more colorizing opinions. That can be a breeding ground for a new war.
Internal market is a tool, in a toolbox of EU in order to achieve the goals of the EU.
Art 3(3) TEU: “The Union shall establish an internal market. It shall work for…
– Economic growth and price stability
– Highly competitive social market economy
– Full employment and social progress
– Protection and improvement of environment
– Etc.
As an instrument (to achieve certain goals) the internal market works as follows:
• Increases availability and the quality of factors of production
• Enhanced ↑ efficiency in production
• Increased production levels
• Improved international position
How we achieve higher standard in the EU with internal market?
Comparative benefits (classical economic: Ricardo)
1
, Countries need to specialise in products where they are the best. If u trade between 2 countries and when they
specialises on the products they can produce the best, the total amount of the produces products of both countries
increase for both countries. Economic growth out of nothing.
Invisible hand (classical economic: Smith)
When people pursue their own interest on the free internal market, the perfect society arises, like if there was an
invisible hand above all. + supply & demand curve
Why create free movement of GPSC? Why those 4?
Cause they are economic handy. These are the 4 factors of production. We want to create a situation that comes as
close as a national market (Ricardo). It gives an invisible multiplying.
Political view: It gives also an improved international position towards other international blocks.
Fortress Europe: protect our market, the walls should be solid.
HOW DOES THE INTERNAL MARKET WORK?
Internal Market is created through:
• Negative integration (prohibition of barriers) in this course
• Positive integration (coordination/harmonisation/common policies)
o Rules for products for e.g. jam. Sit together and set up rules, but harmonization cost a lot of
time.
o Result mutual recognition
Integration removal of barriers
What are barriers? Barriers may result from:
• Discrimination on nationality (dual burden [=last] in law)
o Distinctly [=duidelijk] applicable rules
o Direct discrimination
• Different effect of legislation (equal burden in law; different burden in fact)
o Indistinctly applicable rules
o Indirect discrimination
• Non-discrimination (equal burden in law; equal burden in fact)
French producer want import a product to Netherlands. The law in NL is that you have to fill in forms when you want to
import, Dutch producers don’t need to do that = discrimination on nationality.
When all countries need to fill in the form and the forms are available in all languages of EU, it seems okay. But then
French producer says, in my country I don’t have to do that. So he needs to make extra effort, so the effect of that rule
still ways heavier for the French producer. = indirect discrimination
Mutual recognition: forms are a barrier, if some countries don’t have it, the other ones should leave out them as well.
Reverse discrimination: Dutch producers will still have to fill in the forms even though French producers wouldn’t have
to base on the mutual recognition.
Direct discrimination through state measures is prohibited on the basis of the Treaty.
Justifications are only possible on the basis of the Treaty.
Indirect/Non-discrimination is prohibited on the basis of case law.
Justifications are possible on the basis of the Treaty and case law.
Prohibition/justifications of Direct discrimination Prohibition/justifications of indirect/non-discrimination
• Goods Art 34-35 (pro.) and 36 (just.) • Goods [ECJ Cassis de Dijon, 1979]
• Workers Art 45 (pro. and just.) • Workers [ECJ Kraus, 1993; ECJ Bosman 1995]
• Establishment Art 49 (pro) + 51-52 (just.) • Services [ECJ Säger, 1991]
• Services Art 56 (pro.) and 61 (just.) • Establishment [ECJ Gebhard, 1995]
• Capital Art 63 (pro.) and 65 (just.) • Capital [ECJ Svensson, 1995]
2
, FREE MOVEMENT OF GOODS
Relevant Treaty Articles:
• 26 TFEU: Internal market
• 28 TFEU: Customs Union
• 29 TFEU: ‘Free Circulation’
• 30 TFEU: Prohibition of Duties & Charges having equivalent effect
• 34-35 TFEU: Prohibition of Quotas & Measures having equivalent effect
• 36 TFEU: Exceptions on the prohibitions of articles 34 & 35 TFEU
• 110 TFEU: Internal Taxation
28 TFEU: Customs union Free movement of Goods:
• Def.: foundation of the EU and essential to the functioning of the single market, with the implication that the
27 MS must act as they were one.
• Difference between free trade area and customs union: common extern policy
• Originating in Member States
• Goods from Third Countries which are in free circulation
• No extension of cu benefits for TC:
o [CJEU Bouhelier]
o [CJEU EMI]
o [CJEU Polydor]
• WTO treaty: most favourite nation treatment for all the other trading partners (=non-discrimination clause)
Definition Goods [CJEU Commission v Italy (Art Treasures)]
“All products which can be valued in money and which are capable of forming the subject of a commercial
transaction”
But not qualified as goods (limits):
[CJEU Jagerskiold v Gustafsson: Fishing License]
[CJEU Schindler: Lottery Tickets]
A right of something that you have is not a good.
29 TFEU: Goods in free circulation:
“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.“ (= you have to pass through the gates of fortress Europe)
Customs duty: what’s the reason for import duties when u order things from outside the EU. It is a mechanism that
government (EU) uses to make it less attractive for us to buy outside the EU. (= protectionism) It is not applied within
the EU herself.
There is no such thing as “free circulation of persons”!
Since Schengen there are no border controls anymore free movement
FINANCIAL RESTRICTIONS
Prohibition of CD & CEE:
• Real CD are extinct between MS See eg [CJEU Van Gend & Loos] which concerned a
violation of the standstill clause on Import Duties in old article 12 EEC now art 30 TFEU.
• Focus lies on “CEE” that create a similar barrier to trade to customs duties
• MS are creative in camouflaging “import duties” in all kinds of measures.
• There are no financial restrictions anymore in the EU.
• But there is still a level of protection between MS’s.
Definition CEE [CJEU Commission v Italy (Statistical Levy)]:
3
