#5767 - Free Movement Of Goods Ii - GDL EU Law

• MS are bound by A34 – but also MS will be held liable where they have failed to stop individuals from breaching rules – Commission v France – ‘Spanish Strawberries’ – French farmers sabotaged Spanish strawberries

• Wide definition of A34 – public or quasi-public bodies – e.g. R v Royal Pharmaceutical Society of GB, Apple and Pear Development Council v Lewis, Commission v Ireland

A34: ‘quantitative restrictions on imports and all measures having equivalent effect shall be prohibited’ (QRs) and (MEQRs)

QRs: defined in Geddo v Ente Nationale Risi – ‘measures which amount to a total or partial restraint’

• Ban: as in R v Henn and Darby (UK ban on importation of porn) - most extreme form of QR

• Imposed quotas: International Fruit Co (No 2) v Produktschap voor Groenten - licensing system

• The only way a QR can be saved is through derogations in Article 36

MEQRS: e.g. national rules which regulate physical requirements for products

Secondary legislation – D 70/50

• Transitional measure no longer in force – but indicates commission’s understanding of MEQRs: divided MEQRs into 2 groups: distinctly applicable (do not apply equally to domestic/imported goods) and indistinctly applicable (appear to be equally applicable, but the effect disadvantages imported goods)

• Walter Rau Lebensmittelwerks v de Smedt PvbA – Belgian statute required all margarine to be sold in cubic packages – effect of protecting domestic producers: Belgian defence was avoidance of consumer confusion – seen as legitimate justification but failed proportionality requirement

CJ’s definition in Dassonville

‘All trading rules enacted by MS which are capable of hindering, directly or indirectly, actually or potentially, inta-Community trade’: rule must be capable of hindering trade – very wide ambit

• Commission v Ireland (‘Buy Irish’) - didn’t achieve expected results but still enough

• Concepts of direct or indirect discrimination broadly equivalent to the concepts of distinctly/indistinctly

• Distinction important because the defences differ – indistinctly applicable defendable with reference to ‘mandatory requirements’

Case law on distinctly applicable MEQRs

1. Imposing additional requirements on imported goods: Firma Denkavit Futtermittel v Minister fur Ernahrung - requirement that imported goods should be inspected = breach because of the delays + transport costs

2. National rules giving preference to domestic goods: Buy Irish – campaign to promote Irish goods = MEQR because imports likely to be effected – Commission v Ireland (Irish Souvenirs) – imported jewellery branded with the word ‘foreign’ – CJ held that buyers didn’t need to know where it came from

3. Restricting channels of distribution for imported goods: Dassonville – requirement for certificate of origin was onerous - favoured direct importers from UK over indirect – so hindered free trade

Case law on indistinctly applicable MEQRs

• Most of the cases are to do with packaging and presentation

• List of product requirements which might constitute MEQRs is provided in Criminal Proceedings Against Keck and Mithouard - ‘designation, form, size, weight, consumption, presentation, labelling (and) packaging’

• Walter Rau – Belgian law required margarine to be cube shaped – indistinctly applicable

• Public procurement contracts which indirectly favour domestic goods – Commission v Ireland (Re Dundalk Water Supply) - contractors tendering for contract to supply water to Dundalk – requirements for pipes – but only one manufacturer (Irish one) made such pipes

Defences I: Article 36 TFEU derogations

1. Public Morality: must be irrespective of origin

• Henn and Darby – A36 could be relied upon – in accordance with its own values and not arbitrarily vs. imported

• Conegate – derogation was not available: tried to prevent import of life-size inflatable dolls – but the same goods could be lawfully manufactured in the UK

2. Public Policy

• Extremely narrow – only invoked once in R v Thompson: UK banned export of silver coins – stop destruction

• Rejected in Cullett v Centre Leclerc Toulouse: threat of unrestricted competition was not sufficient

3. Public Security

• Campus Oil Ltd v Minister for Industry and Energy: essential importance of petroleum so restriction necessary – interruption could risk public security – allowed Ireland to maintain own oil refining capacity and was proportional – contrast with Commission v Greece - state’s exclusive oil marketing not proportionate

4. The protection of health and life of humans, animals or plants;

• Most frequently invoked – only applies where EU hasn’t adopted harmonising measures

• Objective evidence must be provided – Commission v Germany (‘Beer Purity’) – German govt banned marketing of beer containing all additives: CJ examined scientific evidence and found little risk to health

• If scientific evidence is inconclusive – CJ will allow MS to decide the degree of protection required – Santoz (dearth of scientific evidence about vitamins)

• Arbitrary measure won’t be tolerated – Commission v UK (‘The Imports of Poultry Meat’) – hastily introduced at Xmas – concern about imports from France – no genuine health reason

• Protection of animals/plants – Criminal Proceedings Against Bluhme – bee keeping – biodiversity

• PreussenElektra AG v Schhleswag AG: legislative policy protecting renewable energy sources justified

5. The protection of national treasures possessing artistic, historic or archaeological value; or

• No case has yet been decided – but raise in Commission v Italy (‘Italian Art’) – but financial measure not A36

6. The protection of industrial and commercial property: Specialised area – IP etc.

ALL SUBJECT TO THE PROPORTIONALITY PRINCIPLE – e.g. C v Netherlands –blanket ban on fortified foods disproportionate – also Campus Oil and Commission v Greece

Defences II: the rule of reason for indistinctly applicable MEQRs

Rewe-Zentral v Bundesmonopolverwaltung (‘Cassis de Dijon’): German law – specified min. alcohol level (25%) for certain spirits including cassis (made in France) – applied equally to domestic and foreign – but impeded importation of French cassis (15-20% content) – 2 contradictory arguments made by CJ:

1. Presumption of mutual recognition

• If a good is produced and marketed lawfully in one country - it is entitled to be sold in another – unless rebuttable under A36

• Verein gegen Unwesen in handel under Gewerbe Koin v Mars GmbH: 10% Mars bars allowed in Germany

2. The rule of reason: mandatory requirements

• Goes beyond A36 - could potentially save an IA MEQR – ambit is limited - Germany unsuccessful in this case – but shows potential for rule of reason to protect ‘effectiveness of fiscal supervision, protection of public health, the fairness of commercial transaction and the defence of the consumer’

Developments after Cassis

• Mutual recognition – powerful tool for importers – Commission v Italy (‘Relabeling of Cocoa Products’ )– labelling of chocolate – Italy couldn’t stop foreign chocolates from describing themselves as chocolate – Italy failed to demonstrate it was in consumers’ interest – shows CJ will balance mutual rec and the rule of reason

• Mandatory requirements listed in Cassis not exhaustive – e.g. protection of cultural activities – Cinetheque SA v Federation Nationale des Cinemas Francais – ban on sale/hire of videos in 1^st year justified

• Protection of the environment – Commission v Denmark (Disposable Beer Cans)

• Schmidberger – citizens freedom of expression accepted as justified restriction on FMG

• but limits on how far mandatory requirements will be extended – PreussenElektra AG v Schhleswag AG

Keck – selling arrangements – indistinctly applicable measures that have an effect on overall volume of trade, but did not affect imports more than domestic products – A34 not even engaged at the outset

Selling arrangements not caught by A 34 TFEU: concern who sells products and how – not the physical goods

• before Keck – inconsistency as to whether they fell under A34: Torfaen Borough Council v B & Q plc – DIY stores – CJ treated trading rules (Sundays) as MEQRs – falling under A34- Stoke-on-Trent and Norwich City Council v B&Q plc : Sunday trading rules did affect trade volume but justified and proportionate – no A34

• EU wanted to clarify A34: Cassis won’t apply to selling arrangements provided: 1) apply to all affected traders operating within the national territory 2) affect in the same manner marketing of domestic/imported – if these two satisfied (as in Keck) then it won’t be an MEQR and A34 won’t apply at all

• E.g. of cases which don’t fall under A34: Criminal Proceedings against Tankstation – petrol stations at night - Herbert Karner Industrie – Auktionen GmbH v Troostwijk: Austrian restriction on advertising from insolvent firms - justified

Selling arrangements that are caught by A 34 TFEU

• Konsumentombudsmannen (KO) v De Agostini (Svenska): Swedish ban on TV advertising directed at <12 yr olds – Court accepted that these were selling arrangements:...