Week 9 - Free movement of goods
The internal market as a legal concept (see also Art 3(3) TEU)
Article 26 TFEU
1. The Union shall adopt measures with the aim of establishing or ensuring the functioning
of the internal market, in accordance with the relevant provisions of the Treaties.
2. 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.
Types of integration: positive and negative
★ Positive integration → harmonisation (Art. 5 TEU → Art. 114 TFEU) → harmonising
through EU law;
★ Negative integration →
○ Free movement of goods, services, capital, establishment and persons →
removing barriers/restrictions (national laws) by prohibiting them (Art. 30, 34
TFEU);
○ Competition law → prohibitions of cartels, abuse of market power & state aid.
2. The Customs Union
Art 28(1) 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.
★ No internal customs barriers (custom duties and all CEE) between Member States
(internal dimension)
★ One common external trade policy & customs tariff towards the rest of the world
(external dimension)
2.1 The Customs Union: external dimension
★ Geographical scope of customs Union
★ Articles 28(2) and 29 TFEU
★ Goods originating in third countries “definitely and wholly assimilated to products
originating in Member States” (Case 41/76 Donckerwolcke [1976], para 17)
2.2 The Customs Union: internal dimension (between MS)
Tariff barriers (fiscal rules) Non-tariff barriers
Art. 3o TFEU; bans custom duties and CEE Art. 34-36 TFEU; ban quotas (quantitative
Art. 110 TFEU; bans discriminatory internal restrictions) and measures having equivalent
taxation. effect.
, Boundaries:
★ Mutually exclusive;
★ Art. 30 TFEU; customs duties always
unlawful;
★ Art. 11o TFEU: internal taxation only
unlawful when it discriminates against
foreign products or protects domestic
products.
Goods move freely within the EU customs union as if it were one single country.
3. EU customs union today
★ Internal customs union completed; all internal custom duties between MS abolished
since 1968;
★ But common external duties and common commercial policy remain highly relevant.
4. Non-tariff barriers to free movement of goods
4.1 Quantitative restrictions and measures of equivalent effect (regulatory measures)
Two types of prohibited measures;
★ Art. 34 TFEU → quantitative restrictions on imports and all measures having equivalent
effect shall be prohibited between member states;
★ Art. 35 TFEU → quantitative restrictions on exports and all measures having equivalent
effect, shall be prohibited between member states;
★ Case 2/73 Geddo.
Definition of goods
Case 7/68 Commission v Italy → by goods, within the meaning of (art. 28), there must be
understood products which can be valued in money and which are capable, as such, of forming
the subject of commercial transactions.
Restrictions of free movement of goods, Art. 34-36 TFEU
Legal analysis consists of a two-step test by the CJEU:
1. Is there a restriction? → a quota or a MEE? (scope of Art. 34/35 TFEU);
a. Prohibit national measures that restrict trade between MS;
b. Quota/import/export bans/embargoes +
c. Measures Having Equivalent Effect (MEEs) → All trading rules enacted by
Member States which are capable of hindering, directly or indirectly, actually or
potentially, intra-Community trade;
i. Product requirements (cassis de dijon);
1. For indistinctly applicable measures (apply to domestic &
imported goods):
a. The Court allows non-Treaty justifications, such as:
i. Consumer protection
ii. Fair trading
iii. Environmental protection
iv. Road safety
, v. Effectiveness of fiscal supervision
2. These cannot justify direct discrimination;
ii. Selling arrangements (Keck doctrine);
2. If so, is the restriction justified (Art. 36 TFEU)?
a. Allows limited justifications for such restrictions → shifts burden to MS;
i. A restriction may be justified on grounds of:
1. Public morality;
2. Public policy;
3. Public security;
4. Protection of health and life of humans, animals or plants;
5. Protection of national treasures;
6. Protection of industrial and commercial property;
ii. Member states cannot invent new grounds under Art. 36;
3. Proportionality test;
a. Suitable → does it achieve the stated aim?
b. Necessary → is there a less restrictive aim?
i. If the aim can be achieved by;
1. Labelling instead of banning;
2. Mutual recognition;
ii. Measure fails proportionality;
c. Balancing → individual interests vs public interests.
★ Originally: a traditional, anti-protectionist reading of Art. 34/35 (discrimination on the
basis of country origin matters!);
★ Since 1970s: a gradual expansion of scope of application (step 1) to include all regulatory
barriers;
★ Ergo: justification (step 2) decides if MS measure is accepted → CJEU as arbiter of
national law and policy;
★ Key case law milestones: Dassonville, Cassis de Dijon, Keck.
4.2. Step 1: MEE definition
Case 8/4 Procurer du Roi v Dassonville (1974)
★ Belgian rules requiring certificate of origin for import of whiskey;
★ All trading rules enacted by MS which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade are to be considered as measures having
equivalent effect.
MEE: (very broad) scope
The CJEU has adopted a very broad interpretation of what counts as an MEE, and the term
covers a wide range of national trading rules that could potentially or actually hinder intra-EU
trade.
All trading rules:
★ Includes also national policies and practices, case 249/81 Buy Irish (1982), para 27-28;
★ The CJEU said that MEEs include any national measures that could directly or indirectly
hinder trade between Member States, even if they aren’t overt barriers like tariffs or
, quotas. This broad interpretation means that even minor regulations that affect trade
could be considered an MEE if they make it harder for goods to move freely within the
EU;
★ Case 249/81 Buy Irish (1982)
○ In this case, the CJEU clarified that national policies or practices, even those that
seem domestic in nature, like promoting local products over imports, can also be
MEEs if they discourage the purchase of goods from other Member States.
○ Facts: Ireland had a public policy to encourage the consumption of domestic
goods, and they promoted this through advertising campaigns urging people to
"Buy Irish";
○ The CJEU concluded that such a policy could be a measure having equivalent
effect because it indirectly influenced trade by giving domestic goods an
advantage in the market;
○ Key takeaway: Even if a policy doesn't directly ban or restrict imports, if it affects
how goods are sold and potentially discourages or disadvantages imported goods,
it might still be considered an MEE;
Enacted by MS:
For a measure to be considered an MEE under Art. 34, it needs to be enacted by a Member
State, and that can include:
★ National laws and regulations;
★ Policies or practices adopted by public authorities (state bodies or quasi-state bodies);
★ Vertical direct effect: state bodies and quasi-state bodies;
○ Vertical direct effect means that Art. 34 can be directly invoked against the State
or state bodies (including public authorities and quasi-state actors), i.e., public
institutions that enact such measures;
★ Case C-265/95 Commission v France (Spanish strawberries): indirect responsibility of
government;
○ In this case, France had a law against the importation of strawberries from Spain,
but the CJEU found that French farmers, acting without direct state intervention,
were obstructing imports by violently blocking roads and harassing Spanish
trucks;
○ Even though these actions were private, the French state was held responsible
because it had failed to prevent them. The CJEU ruled that France was indirectly
responsible for the actions of private individuals if the government didn’t take
appropriate measures to stop it;
○ Key takeaway: Even though private individuals weren’t directly part of the
government, the CJEU held France accountable because the government had a
duty to prevent such actions that hindered trade;
★ But: no horizontal direct effect of art. 34 TFEU;
○ Horizontal direct effect means that Art. 34 cannot be directly invoked in disputes
between private parties (i.e., individuals or companies), only against the state.
○ If a private party enacts a measure that restricts trade, Art. 34 TFEU does not
apply directly. Instead, national courts must rely on other legal principles (like
the free movement of goods provisions from the EU treaties or direct effect of
directives in some cases) to resolve disputes.
The internal market as a legal concept (see also Art 3(3) TEU)
Article 26 TFEU
1. The Union shall adopt measures with the aim of establishing or ensuring the functioning
of the internal market, in accordance with the relevant provisions of the Treaties.
2. 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.
Types of integration: positive and negative
★ Positive integration → harmonisation (Art. 5 TEU → Art. 114 TFEU) → harmonising
through EU law;
★ Negative integration →
○ Free movement of goods, services, capital, establishment and persons →
removing barriers/restrictions (national laws) by prohibiting them (Art. 30, 34
TFEU);
○ Competition law → prohibitions of cartels, abuse of market power & state aid.
2. The Customs Union
Art 28(1) 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.
★ No internal customs barriers (custom duties and all CEE) between Member States
(internal dimension)
★ One common external trade policy & customs tariff towards the rest of the world
(external dimension)
2.1 The Customs Union: external dimension
★ Geographical scope of customs Union
★ Articles 28(2) and 29 TFEU
★ Goods originating in third countries “definitely and wholly assimilated to products
originating in Member States” (Case 41/76 Donckerwolcke [1976], para 17)
2.2 The Customs Union: internal dimension (between MS)
Tariff barriers (fiscal rules) Non-tariff barriers
Art. 3o TFEU; bans custom duties and CEE Art. 34-36 TFEU; ban quotas (quantitative
Art. 110 TFEU; bans discriminatory internal restrictions) and measures having equivalent
taxation. effect.
, Boundaries:
★ Mutually exclusive;
★ Art. 30 TFEU; customs duties always
unlawful;
★ Art. 11o TFEU: internal taxation only
unlawful when it discriminates against
foreign products or protects domestic
products.
Goods move freely within the EU customs union as if it were one single country.
3. EU customs union today
★ Internal customs union completed; all internal custom duties between MS abolished
since 1968;
★ But common external duties and common commercial policy remain highly relevant.
4. Non-tariff barriers to free movement of goods
4.1 Quantitative restrictions and measures of equivalent effect (regulatory measures)
Two types of prohibited measures;
★ Art. 34 TFEU → quantitative restrictions on imports and all measures having equivalent
effect shall be prohibited between member states;
★ Art. 35 TFEU → quantitative restrictions on exports and all measures having equivalent
effect, shall be prohibited between member states;
★ Case 2/73 Geddo.
Definition of goods
Case 7/68 Commission v Italy → by goods, within the meaning of (art. 28), there must be
understood products which can be valued in money and which are capable, as such, of forming
the subject of commercial transactions.
Restrictions of free movement of goods, Art. 34-36 TFEU
Legal analysis consists of a two-step test by the CJEU:
1. Is there a restriction? → a quota or a MEE? (scope of Art. 34/35 TFEU);
a. Prohibit national measures that restrict trade between MS;
b. Quota/import/export bans/embargoes +
c. Measures Having Equivalent Effect (MEEs) → All trading rules enacted by
Member States which are capable of hindering, directly or indirectly, actually or
potentially, intra-Community trade;
i. Product requirements (cassis de dijon);
1. For indistinctly applicable measures (apply to domestic &
imported goods):
a. The Court allows non-Treaty justifications, such as:
i. Consumer protection
ii. Fair trading
iii. Environmental protection
iv. Road safety
, v. Effectiveness of fiscal supervision
2. These cannot justify direct discrimination;
ii. Selling arrangements (Keck doctrine);
2. If so, is the restriction justified (Art. 36 TFEU)?
a. Allows limited justifications for such restrictions → shifts burden to MS;
i. A restriction may be justified on grounds of:
1. Public morality;
2. Public policy;
3. Public security;
4. Protection of health and life of humans, animals or plants;
5. Protection of national treasures;
6. Protection of industrial and commercial property;
ii. Member states cannot invent new grounds under Art. 36;
3. Proportionality test;
a. Suitable → does it achieve the stated aim?
b. Necessary → is there a less restrictive aim?
i. If the aim can be achieved by;
1. Labelling instead of banning;
2. Mutual recognition;
ii. Measure fails proportionality;
c. Balancing → individual interests vs public interests.
★ Originally: a traditional, anti-protectionist reading of Art. 34/35 (discrimination on the
basis of country origin matters!);
★ Since 1970s: a gradual expansion of scope of application (step 1) to include all regulatory
barriers;
★ Ergo: justification (step 2) decides if MS measure is accepted → CJEU as arbiter of
national law and policy;
★ Key case law milestones: Dassonville, Cassis de Dijon, Keck.
4.2. Step 1: MEE definition
Case 8/4 Procurer du Roi v Dassonville (1974)
★ Belgian rules requiring certificate of origin for import of whiskey;
★ All trading rules enacted by MS which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade are to be considered as measures having
equivalent effect.
MEE: (very broad) scope
The CJEU has adopted a very broad interpretation of what counts as an MEE, and the term
covers a wide range of national trading rules that could potentially or actually hinder intra-EU
trade.
All trading rules:
★ Includes also national policies and practices, case 249/81 Buy Irish (1982), para 27-28;
★ The CJEU said that MEEs include any national measures that could directly or indirectly
hinder trade between Member States, even if they aren’t overt barriers like tariffs or
, quotas. This broad interpretation means that even minor regulations that affect trade
could be considered an MEE if they make it harder for goods to move freely within the
EU;
★ Case 249/81 Buy Irish (1982)
○ In this case, the CJEU clarified that national policies or practices, even those that
seem domestic in nature, like promoting local products over imports, can also be
MEEs if they discourage the purchase of goods from other Member States.
○ Facts: Ireland had a public policy to encourage the consumption of domestic
goods, and they promoted this through advertising campaigns urging people to
"Buy Irish";
○ The CJEU concluded that such a policy could be a measure having equivalent
effect because it indirectly influenced trade by giving domestic goods an
advantage in the market;
○ Key takeaway: Even if a policy doesn't directly ban or restrict imports, if it affects
how goods are sold and potentially discourages or disadvantages imported goods,
it might still be considered an MEE;
Enacted by MS:
For a measure to be considered an MEE under Art. 34, it needs to be enacted by a Member
State, and that can include:
★ National laws and regulations;
★ Policies or practices adopted by public authorities (state bodies or quasi-state bodies);
★ Vertical direct effect: state bodies and quasi-state bodies;
○ Vertical direct effect means that Art. 34 can be directly invoked against the State
or state bodies (including public authorities and quasi-state actors), i.e., public
institutions that enact such measures;
★ Case C-265/95 Commission v France (Spanish strawberries): indirect responsibility of
government;
○ In this case, France had a law against the importation of strawberries from Spain,
but the CJEU found that French farmers, acting without direct state intervention,
were obstructing imports by violently blocking roads and harassing Spanish
trucks;
○ Even though these actions were private, the French state was held responsible
because it had failed to prevent them. The CJEU ruled that France was indirectly
responsible for the actions of private individuals if the government didn’t take
appropriate measures to stop it;
○ Key takeaway: Even though private individuals weren’t directly part of the
government, the CJEU held France accountable because the government had a
duty to prevent such actions that hindered trade;
★ But: no horizontal direct effect of art. 34 TFEU;
○ Horizontal direct effect means that Art. 34 cannot be directly invoked in disputes
between private parties (i.e., individuals or companies), only against the state.
○ If a private party enacts a measure that restricts trade, Art. 34 TFEU does not
apply directly. Instead, national courts must rely on other legal principles (like
the free movement of goods provisions from the EU treaties or direct effect of
directives in some cases) to resolve disputes.
