Internal Market Seminars
Week 1: Free Movement & the Market: Goods, Tariff Barriers & Purely Internal Situations
Internal Market
● Art 26 TFEU → Establishes IM
○ EU shall adopt measures to establish an IM in accordance with the treaties
- IM → An area where goods, services, capital & persons can move freely
● Overall rationale of allowing the 4 factors of production → Optimal allocation
○ Ex: Unemployed can easily cross the border to work
- Result: IM would grow
● There are fiscal and non-fiscal measures for goods
○ Fiscal measures → Usually pecuniary charges
- Art 30 TFEU → Custom duties
- Art 110 TFEU → Taxation
○ Non-fiscal measures
- Art 34 TFEU → Prohibits quantitative restrictions for imports
- Art 35 TFEU → Prohibits quantitative restrictions for exports
● Goal of the IM = To get rid of physical barriers in customs duties
Fiscal Measures: Art 30 & Art 110 TFEU
● Art 30 → Custom duties on import and exports and CEE shall be prohibited between MSs
○ Relevant for similar products
- CEE → Ex: Fiscal measures like sanitary checks
○ What is the reason for the prohibition of CEEs?
- Difference between discrimination & protection
- More about protection, not discrimination
- Discrimination Ex: Tomatoes from Spain being taxed more than tomatoes
from NL (similar products)
- You cannot justify a measure that happens under Art 30
- ECJ’s formula → It is in sphere of Art 30 IF:
1) A measure imposed unilaterally on a good
2) Based on the fact that it is crossing the frontier
→ Existence of similar product does not have to be proven
, ● Art 110 TFEU
1) No MS shall impose, directly or indirectly, on the products of other MSs any internal
taxation above that imposed on similar domestic products
2) No MS shall impose on the products of other MS any internal taxation of such a
nature as to afford indirect protection to other products.
○ Related to products that compete with each other, but are not similar
- Ex: Beer & cheap wine
- NL cannot tax foreign products in a way that has a protectionist effect
Distinction between Article 110(1) and (2)
1) ART 110 (1) → Products are similar
- Result: The tax on the domestic and the imported good has to be equalised
2) ART 110 (2) → Products are not similar but in competition
Art 30 and 110 are mutually exclusive → Both cannot be used to solve a case
a. Using ART 30 → You have to get rid of the measure
b. Using ART 110 → You have to get rid of protectionist or discriminatory effect
Outokumpu: Art 30 or 110?
● Facts: Finnish government charging electricity coming from abroad differently than
electricity coming nationally
● Question: Whether this tax scheme is in line with EU law?
○ First examine whether scheme falls under Art 30 or 110 TFEU
- ECJ → This was a taxing scheme under Art 110
- Lays out 2 criteria when Art 110 applies:
1) A scheme is part of a general system of internal taxation that applies
the dues or fees systematically to these products (para 221)
- Internal taxation as long as it is in the same marketing stage
2) The duty is levied both on domestic and imported products
independent of the origin of the product or the fact that it crosses a
frontier
- Usually a result of the 1st criteria
1st criteria:
, - Even though electricity was taxed in different stages of the market,
the court said it didn’t matter bc it was taxed as soon as it entered
the system
2nd criteria:
- Charged is also imposed on domestic electricity
● Decision:
○ Both conditions were fulfilled and thus this case falls under Art 110(1)
- Tax regarded as discriminatory → Tax treated similar products differently
- Practical difficulties are not considered a sound legal argument
Week 2: Free Movement of Goods: Non-Fiscal Barriers
● Non-Fiscal Measures → Prohibited under ART 34/35 TFEU
○ ART 34 → Prohibition of quantitative restrictions and MEE on imports
- More cases with regard to imports
- WHY? → MS don’t want to restrict exports
○ ART 35 → Prohibition of quantitative restrictions and MEE on exports
What is a quantitative restriction?
Quantitative restriction → Measures which amount to a total or partial restraint of imports &
exports of goods in transit (Ghetto)
- Ex: Total restraint → NL saying tomatoes from Germany cannot be imported into NL
- Ex: Partial restraint → Only 30kg of tomatoes from Germany can be imported
What is a MEE to a quantitative restriction?
MEE → Measure which directly/indirectly, actually/potentially affects intra-community trade between
MS → Dassonville formula
Dassonville
● Belgium required a certificate of origin to import Scotch whisky
○ No partial or total restraint but restraint on traders considered equal
1) Is it a custom duty yes or no?
- No → No ART 30
2) Is it taxation?
- No taxation → No ART 110
3) Is it a quantitative restriction
- No → Ex: Only 20 bottles imported a day
Week 1: Free Movement & the Market: Goods, Tariff Barriers & Purely Internal Situations
Internal Market
● Art 26 TFEU → Establishes IM
○ EU shall adopt measures to establish an IM in accordance with the treaties
- IM → An area where goods, services, capital & persons can move freely
● Overall rationale of allowing the 4 factors of production → Optimal allocation
○ Ex: Unemployed can easily cross the border to work
- Result: IM would grow
● There are fiscal and non-fiscal measures for goods
○ Fiscal measures → Usually pecuniary charges
- Art 30 TFEU → Custom duties
- Art 110 TFEU → Taxation
○ Non-fiscal measures
- Art 34 TFEU → Prohibits quantitative restrictions for imports
- Art 35 TFEU → Prohibits quantitative restrictions for exports
● Goal of the IM = To get rid of physical barriers in customs duties
Fiscal Measures: Art 30 & Art 110 TFEU
● Art 30 → Custom duties on import and exports and CEE shall be prohibited between MSs
○ Relevant for similar products
- CEE → Ex: Fiscal measures like sanitary checks
○ What is the reason for the prohibition of CEEs?
- Difference between discrimination & protection
- More about protection, not discrimination
- Discrimination Ex: Tomatoes from Spain being taxed more than tomatoes
from NL (similar products)
- You cannot justify a measure that happens under Art 30
- ECJ’s formula → It is in sphere of Art 30 IF:
1) A measure imposed unilaterally on a good
2) Based on the fact that it is crossing the frontier
→ Existence of similar product does not have to be proven
, ● Art 110 TFEU
1) No MS shall impose, directly or indirectly, on the products of other MSs any internal
taxation above that imposed on similar domestic products
2) No MS shall impose on the products of other MS any internal taxation of such a
nature as to afford indirect protection to other products.
○ Related to products that compete with each other, but are not similar
- Ex: Beer & cheap wine
- NL cannot tax foreign products in a way that has a protectionist effect
Distinction between Article 110(1) and (2)
1) ART 110 (1) → Products are similar
- Result: The tax on the domestic and the imported good has to be equalised
2) ART 110 (2) → Products are not similar but in competition
Art 30 and 110 are mutually exclusive → Both cannot be used to solve a case
a. Using ART 30 → You have to get rid of the measure
b. Using ART 110 → You have to get rid of protectionist or discriminatory effect
Outokumpu: Art 30 or 110?
● Facts: Finnish government charging electricity coming from abroad differently than
electricity coming nationally
● Question: Whether this tax scheme is in line with EU law?
○ First examine whether scheme falls under Art 30 or 110 TFEU
- ECJ → This was a taxing scheme under Art 110
- Lays out 2 criteria when Art 110 applies:
1) A scheme is part of a general system of internal taxation that applies
the dues or fees systematically to these products (para 221)
- Internal taxation as long as it is in the same marketing stage
2) The duty is levied both on domestic and imported products
independent of the origin of the product or the fact that it crosses a
frontier
- Usually a result of the 1st criteria
1st criteria:
, - Even though electricity was taxed in different stages of the market,
the court said it didn’t matter bc it was taxed as soon as it entered
the system
2nd criteria:
- Charged is also imposed on domestic electricity
● Decision:
○ Both conditions were fulfilled and thus this case falls under Art 110(1)
- Tax regarded as discriminatory → Tax treated similar products differently
- Practical difficulties are not considered a sound legal argument
Week 2: Free Movement of Goods: Non-Fiscal Barriers
● Non-Fiscal Measures → Prohibited under ART 34/35 TFEU
○ ART 34 → Prohibition of quantitative restrictions and MEE on imports
- More cases with regard to imports
- WHY? → MS don’t want to restrict exports
○ ART 35 → Prohibition of quantitative restrictions and MEE on exports
What is a quantitative restriction?
Quantitative restriction → Measures which amount to a total or partial restraint of imports &
exports of goods in transit (Ghetto)
- Ex: Total restraint → NL saying tomatoes from Germany cannot be imported into NL
- Ex: Partial restraint → Only 30kg of tomatoes from Germany can be imported
What is a MEE to a quantitative restriction?
MEE → Measure which directly/indirectly, actually/potentially affects intra-community trade between
MS → Dassonville formula
Dassonville
● Belgium required a certificate of origin to import Scotch whisky
○ No partial or total restraint but restraint on traders considered equal
1) Is it a custom duty yes or no?
- No → No ART 30
2) Is it taxation?
- No taxation → No ART 110
3) Is it a quantitative restriction
- No → Ex: Only 20 bottles imported a day
