WEEK01 – Free movement of goods (chapter 12)
Art. 28(1) TFEU creates a customs union covering all trade in goods. It entails the establishment of
uniform rules for goods coming from third countries. A customs union has an external and an
internal dimension.
External dimension uniform common rules which apply to products originating from third
countries: a common customs tariff (art. 31 TFEU) and the common commercial policy in trade with
third countries (art. 207 TFEU).
Internal dimension abolition of barriers to trade between member states. This is achieved
through:
a) The prohibition of customs duties and charges of equivalent effect or CEEs (art. 30 TFEU on
fiscal matters).
b) The prohibition of quantitative restrictions and measures of equivalent effect or MEEs (art.
34 to 36 TFEU on non-fiscal matters).
c) The prohibition of internal discriminatory taxation (art. 110 TFEU on fiscal matters).
Art. 28 applies to goods originating in a member state or goods that are in free circulation (art. 29
TFEU). The free movement rules are indistinctly applicable to goods originating in member states and
goods that are in free circulation.
The definition of ‘goods’ was defined in Commission v Italy (Works of Art), where the court defined
goods as: products which can be valued in money and which are capable, as such, of forming the
subject of commercial transactions. This definition is not exhaustive: waste is to be regarded as
goods, so is electricity, and so are corpses and human body parts.
The principle of free movement of goods does not prevent member states from imposing restrictions
under certain limited restrictions.
Customs duties and charges having equivalent effect
Customs duties are charges levied on goods by reason of the fact that they cross a frontier between
member states.
Art. 30 TFEU also prohibits CEEs. The treaty contains no definition of CEEs, so the task of defining this
concept has been left to the court. The landmark ruling on CEEs is the Diamonds case, due to the
specific features of the disputed tax.
Belgium had established a Social Fund for Diamond Workers, the purpose of which was to award
social benefits to those workers. All imports of unworked diamonds were subject to aa
contribution intended to enable the fund to fulfil its tasks. The amount of the contribution was
0.33 per cent of the value of unworked diamonds imported. The court ruled:
“… any pecuniary charge, however small and whatever its designation and mode of application, which
is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and
which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the
meaning of art. 28 and 30 TFEU, even if it is not imposed on the benefit of the state, is not
discriminatory or protective in effect or if the product on which the charge is imposed is not in
competition with any domestic product.”
Aspects of this definition:
1. A CEE is a pecuniary charge, in other words, a sum of money must be paid.
2. The charge must be imposed by reason of the fact that the goods cross a frontier.
3. It is irrelevant that the amount of the charge is minimal. Art. 34 and 36 TFEU are not subject
to a de minimis rule.
4. The designation and mode of application are also irrelevant.
, 5. CEEs are not confined to charges imposed to the benefit of the state. CEEs are prohibited
independently of any consideration of the purpose for which they were introduced and the
destination of the revenue obtained.
6. Charges may constitute CEEs even if they are not discriminatory or protective. This means,
e.g., that a charge imposed on imports and exports can still be a CEE.
7. The court has consistently held that the prohibition of customs duties and CEEs constitutes a
fundamental rule which does not permit of any exceptions. Exceptions of this fundamental
rule must be strictly construed.
There are two situations which may escape the prohibition of art. 30 TFEU, namely:
a) Where the payment is consideration for a service rendered;
a. The service must confer a specific advantage on the importer or exporter and the
charge must be proportionate to the benefit conferred. Charges levied on account of
obtaining statistical information cannot be regarded as a service rendered: the court
rejected this argument on the ground that the statistical information was beneficial
to the economy as a whole, but not to the individual importer or exporter
(Bresciani).
b) Where it relates to inspections required by the EU.
a. Where health inspections are required by EU law, member states are entitled to
recover the costs, subject to certain conditions:
i. The charge must not exceed the actual costs of the inspection.
ii. The inspection in question must be obligatory and uniform for all products in
the EU.
iii. The inspection must be required by EU law.
iv. They promote the free movement of goods by eliminating obstacles which
could arise from unilateral measures of inspection adopted by member
states in accordance with art. 36 TFEU.
In contrast: where EU law merely permits member states to carry out the inspection, this exception
does not apply.
These are not exceptions to the prohibition on CEEs, these charges are not CEEs at all.
In the case of Bresciani, the court decided on an issue concerning inspection fees on cow hides. Italy
imposed an ‘inspection fee’ on imports of cow hides in the interest of public health:
“In order to ascertain whether the inspection duty collected on imported hides constitutes a CEE,
the first thing to be established it whether it is also levied on corresponding national products. It
appears that this is not the case. There is, in fact, for hides taken from animals slaughtered in the
state, no inspection corresponding to that for which the charge under consideration in this case is
levied.
(…)
The import charge under consideration here could, in the absence of a corresponding domestic
charge, only escape the prohibition if it could be regarded as consideration for a service rendered.
This is impossible however, since, as we have seen, the examination in question is imposed in the
public interest.”
The imposition of a charge on the crossing of an internal border, may also constitute a CEE. The court
held that a levied charge at a regional border undermines the unity of the customs union and creates
an obstacle to free movement of goods at least as serious as a charge levied at a national border.
, The consequence of breaching the prohibition of CEEs is that member states must eliminate the CEE.
Where charges have been unlawfully levied, the persons concerned have the right to repayment.
Quantitative restrictions and measures having equivalent effect
According to art. 34 TFEU, quantitative restrictions (QR) and measures having equivalent effect
(MEQR/MEE) on imports between member states are prohibited. These provisions are intended to
eliminate non-fiscal barriers to trade between member states.
The TFEU does not define the concept of QRs. However, the court has held that:
“the prohibition on quantitative restrictions covers measures which amount to a total or partial
restraint of, according to the circumstances, imports, exports or goods in transit”.
A total restraint is an import or export ban.
A partial restraint is a system of import or export quotas.
The definition is QRs is the same, whether imports or exports are concerned. In contrast, the
definition on MEQRs on imports is fundamentally different from that of MEQRs on exports.
Measures of equivalent effect: imports
In Dassonville Belgian law required Scotch Whiskey to have a certificate or origin in order to be sold
in Belgium. Dassonville purchased Scotch whisky in France, to sell in Belgium. He forged certificates
of origin in order to satisfy Belgian law. This certificate requirement made it more difficult for a seller
such as Dassonville to sell in Belgium, and was to be regarded as an MEQR.
The classic definition on MEQRs is to be found in Dassonville, where the court held:
“all trading rules enacted by member states, which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade are to be considered as measures having equivalent
effect to quantitative restrictions.”
Because the Dassonville formula involves an examination of the actual or potential, direct and or
indirect effect of the measure in question, the court considers the inherent nature of that measure
without regard to any economic or statistical analysis.
Some measures do not constitute even potential or indirect hindrance to imports and therefore fall
outside the formula altogether. In a handful of cases the court held that measures fell outside the
scope of art. 34 TFEU because the possibility of their affecting imports was ‘too uncertain and
indirect”.
Another consequence of the breadth of the concept of MEQRs on imports is that the court has ruled
that art. 34 TFEU ‘covers in general all barriers to imports which are not already specifically covered
by other treaty provisions.’ In relation to these articles, each of which constitutes a lex specialis, art.
34 TFEU has been described as a lex generalis.
A further obvious characteristic of the Dassonville formula is that is refers explicitly to the effects of a
measure, and not its purpose.
What the court did not do in Dassonville was to give any indication as to whether discrimination is a
necessary ingredient of an MEQR. The early cases all concerned so-called ‘distinctly applicable’
measures (discriminatory). The court first encountered indistinctly applicable measures in the
celebrated case of Cassis de Dijon.
A German liquor importer was refused permission to import ‘Cassis de Dijon’ liquor into Germany
from France, as ‘Cassis de Dijon’ would violate German law requiring fruit liquors to contain a
Art. 28(1) TFEU creates a customs union covering all trade in goods. It entails the establishment of
uniform rules for goods coming from third countries. A customs union has an external and an
internal dimension.
External dimension uniform common rules which apply to products originating from third
countries: a common customs tariff (art. 31 TFEU) and the common commercial policy in trade with
third countries (art. 207 TFEU).
Internal dimension abolition of barriers to trade between member states. This is achieved
through:
a) The prohibition of customs duties and charges of equivalent effect or CEEs (art. 30 TFEU on
fiscal matters).
b) The prohibition of quantitative restrictions and measures of equivalent effect or MEEs (art.
34 to 36 TFEU on non-fiscal matters).
c) The prohibition of internal discriminatory taxation (art. 110 TFEU on fiscal matters).
Art. 28 applies to goods originating in a member state or goods that are in free circulation (art. 29
TFEU). The free movement rules are indistinctly applicable to goods originating in member states and
goods that are in free circulation.
The definition of ‘goods’ was defined in Commission v Italy (Works of Art), where the court defined
goods as: products which can be valued in money and which are capable, as such, of forming the
subject of commercial transactions. This definition is not exhaustive: waste is to be regarded as
goods, so is electricity, and so are corpses and human body parts.
The principle of free movement of goods does not prevent member states from imposing restrictions
under certain limited restrictions.
Customs duties and charges having equivalent effect
Customs duties are charges levied on goods by reason of the fact that they cross a frontier between
member states.
Art. 30 TFEU also prohibits CEEs. The treaty contains no definition of CEEs, so the task of defining this
concept has been left to the court. The landmark ruling on CEEs is the Diamonds case, due to the
specific features of the disputed tax.
Belgium had established a Social Fund for Diamond Workers, the purpose of which was to award
social benefits to those workers. All imports of unworked diamonds were subject to aa
contribution intended to enable the fund to fulfil its tasks. The amount of the contribution was
0.33 per cent of the value of unworked diamonds imported. The court ruled:
“… any pecuniary charge, however small and whatever its designation and mode of application, which
is imposed unilaterally on domestic or foreign goods by reason of the fact that they cross a frontier, and
which is not a customs duty in the strict sense, constitutes a charge having equivalent effect within the
meaning of art. 28 and 30 TFEU, even if it is not imposed on the benefit of the state, is not
discriminatory or protective in effect or if the product on which the charge is imposed is not in
competition with any domestic product.”
Aspects of this definition:
1. A CEE is a pecuniary charge, in other words, a sum of money must be paid.
2. The charge must be imposed by reason of the fact that the goods cross a frontier.
3. It is irrelevant that the amount of the charge is minimal. Art. 34 and 36 TFEU are not subject
to a de minimis rule.
4. The designation and mode of application are also irrelevant.
, 5. CEEs are not confined to charges imposed to the benefit of the state. CEEs are prohibited
independently of any consideration of the purpose for which they were introduced and the
destination of the revenue obtained.
6. Charges may constitute CEEs even if they are not discriminatory or protective. This means,
e.g., that a charge imposed on imports and exports can still be a CEE.
7. The court has consistently held that the prohibition of customs duties and CEEs constitutes a
fundamental rule which does not permit of any exceptions. Exceptions of this fundamental
rule must be strictly construed.
There are two situations which may escape the prohibition of art. 30 TFEU, namely:
a) Where the payment is consideration for a service rendered;
a. The service must confer a specific advantage on the importer or exporter and the
charge must be proportionate to the benefit conferred. Charges levied on account of
obtaining statistical information cannot be regarded as a service rendered: the court
rejected this argument on the ground that the statistical information was beneficial
to the economy as a whole, but not to the individual importer or exporter
(Bresciani).
b) Where it relates to inspections required by the EU.
a. Where health inspections are required by EU law, member states are entitled to
recover the costs, subject to certain conditions:
i. The charge must not exceed the actual costs of the inspection.
ii. The inspection in question must be obligatory and uniform for all products in
the EU.
iii. The inspection must be required by EU law.
iv. They promote the free movement of goods by eliminating obstacles which
could arise from unilateral measures of inspection adopted by member
states in accordance with art. 36 TFEU.
In contrast: where EU law merely permits member states to carry out the inspection, this exception
does not apply.
These are not exceptions to the prohibition on CEEs, these charges are not CEEs at all.
In the case of Bresciani, the court decided on an issue concerning inspection fees on cow hides. Italy
imposed an ‘inspection fee’ on imports of cow hides in the interest of public health:
“In order to ascertain whether the inspection duty collected on imported hides constitutes a CEE,
the first thing to be established it whether it is also levied on corresponding national products. It
appears that this is not the case. There is, in fact, for hides taken from animals slaughtered in the
state, no inspection corresponding to that for which the charge under consideration in this case is
levied.
(…)
The import charge under consideration here could, in the absence of a corresponding domestic
charge, only escape the prohibition if it could be regarded as consideration for a service rendered.
This is impossible however, since, as we have seen, the examination in question is imposed in the
public interest.”
The imposition of a charge on the crossing of an internal border, may also constitute a CEE. The court
held that a levied charge at a regional border undermines the unity of the customs union and creates
an obstacle to free movement of goods at least as serious as a charge levied at a national border.
, The consequence of breaching the prohibition of CEEs is that member states must eliminate the CEE.
Where charges have been unlawfully levied, the persons concerned have the right to repayment.
Quantitative restrictions and measures having equivalent effect
According to art. 34 TFEU, quantitative restrictions (QR) and measures having equivalent effect
(MEQR/MEE) on imports between member states are prohibited. These provisions are intended to
eliminate non-fiscal barriers to trade between member states.
The TFEU does not define the concept of QRs. However, the court has held that:
“the prohibition on quantitative restrictions covers measures which amount to a total or partial
restraint of, according to the circumstances, imports, exports or goods in transit”.
A total restraint is an import or export ban.
A partial restraint is a system of import or export quotas.
The definition is QRs is the same, whether imports or exports are concerned. In contrast, the
definition on MEQRs on imports is fundamentally different from that of MEQRs on exports.
Measures of equivalent effect: imports
In Dassonville Belgian law required Scotch Whiskey to have a certificate or origin in order to be sold
in Belgium. Dassonville purchased Scotch whisky in France, to sell in Belgium. He forged certificates
of origin in order to satisfy Belgian law. This certificate requirement made it more difficult for a seller
such as Dassonville to sell in Belgium, and was to be regarded as an MEQR.
The classic definition on MEQRs is to be found in Dassonville, where the court held:
“all trading rules enacted by member states, which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade are to be considered as measures having equivalent
effect to quantitative restrictions.”
Because the Dassonville formula involves an examination of the actual or potential, direct and or
indirect effect of the measure in question, the court considers the inherent nature of that measure
without regard to any economic or statistical analysis.
Some measures do not constitute even potential or indirect hindrance to imports and therefore fall
outside the formula altogether. In a handful of cases the court held that measures fell outside the
scope of art. 34 TFEU because the possibility of their affecting imports was ‘too uncertain and
indirect”.
Another consequence of the breadth of the concept of MEQRs on imports is that the court has ruled
that art. 34 TFEU ‘covers in general all barriers to imports which are not already specifically covered
by other treaty provisions.’ In relation to these articles, each of which constitutes a lex specialis, art.
34 TFEU has been described as a lex generalis.
A further obvious characteristic of the Dassonville formula is that is refers explicitly to the effects of a
measure, and not its purpose.
What the court did not do in Dassonville was to give any indication as to whether discrimination is a
necessary ingredient of an MEQR. The early cases all concerned so-called ‘distinctly applicable’
measures (discriminatory). The court first encountered indistinctly applicable measures in the
celebrated case of Cassis de Dijon.
A German liquor importer was refused permission to import ‘Cassis de Dijon’ liquor into Germany
from France, as ‘Cassis de Dijon’ would violate German law requiring fruit liquors to contain a
