Student Exam Number 164971
Free Movement of Goods
The European Union works around the rationale of an internal market or the free movement of goods, capital, services, and people following Article 26 of the Treaty of the Functioning of the European Union (TFEU)1. This is so the European market resembles that of a national state. This essay will focus on the free movement of goods, ‘goods’ defined in the case Commission v Italy2 as ‘products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions’ in this particular case cheese and yoghurt. Obstacles such as frontiers or the diversity of laws and culture must be removed in order to achieve a single market as expressed in the Gaston Schul case of 19823. This would mean removing custom duties and charges having an equivalent effect, taxes discriminating against imports, imposition of quotas or measures having equivalent effect to quotas.
Michael’s first legal challenge deals with the issue of customs duties on imports and exports and charges having equivalent effect to custom duties (CEE). Under Article 284 and under Article 305 all charges of custom duties or CEE’s are prohibited. The charge imposed by France on all imported dairy products in this case can be seen as a CEE because under the definition used in Commission v Italy6 it is a pecuniary charge imposed unilaterally by reason of the fact that it has crossed a frontier. The prohibitions of custom duties or CEE’s see no exemptions or derogations. They are seen as general absolute prohibitions by the European Court of Justice. The idea of states raising money because a good has crossed a frontier is incompatible with the ideal of a common market. Even though the charge imposed by France is one that is of good purpose it is illegal nevertheless. This is followed from the Diamantarbeiders7 case where the Belgian government imposed a levy on imported diamonds in order to provide social security benefits for diamond workers. Even though the charge was acknowledged to be “for a good cause” it was still considered as a CEE to a custom duty and thus was prohibited by the Treaty. Accordingly the charge France is imposing on all imported dairy products is absolutely prohibited and on this basis Michael should be able to sell his cheese and yoghurt in France.
The second challenge Michael is facing relates to the mutual recognition presumption and also to measures relating to ingredients and composition. Portugal’s ban on Michael’s yoghurt is not a fiscal barrier and also does not fall under a quantitative restriction following the definition set in Geddo v Ente Nationale Risi8. However the ban can be recognised as a measure having equivalent effect to a quantitative restriction (MHEE). There is no treaty definition of MHEE but there is a formula to follow which was established in the Dassonville9 case defining MHEE as ‘All trading rules potentially hindering trade’10. Therefore the ban Portugal is imposing on Michael’s yoghurt is a MHEE and is prohibited under Article 3411. The legal way to deal with this obstacle is to follow the principle of mutual recognition12. This principle was formed from the Cassis de Dijon case13 where the Court of Justice held that ‘where goods have been lawfully produced and marketed in one member state they should be free to be marketed in any other member state without restriction. Therefore since Michael has produced and sold his yoghurt successfully in the UK, Portugal cannot prevent Michael’s yoghurt from being imported and sold in Portugal. However Portugal is arguing that the fruity variety in the yoghurt is unhealthy and the ECJ does allow Member States to regulate matters relating to restrictions on the use of certain food stuffs provided that the Member State can produce scientific data supporting its claim that the prohibited ingredient constitutes danger to health (Alina Kaczorowska, European Union Law, 2013)14 An...
Please join StudyMode to read the full document