MOD004986 - EU Law

HANDOUT

Free Movement of Goods: Non-Fiscal Barriers

The free movement of goods may be restricted as a result of fiscal barriers and/or non-fiscal
barriers imposed by member states.

Non-fiscal barriers: key Treaty articles:

 Art 34 TFEU which prohibits quantitative restrictions and all measures having equivalent
effect on imports.
 Art 35 TFEU which prohibits quantitative restrictions and all measure having equivalent effect
on exports.
 Art 36TFEU which provides for derogations to the prohibitions in articles 34 and 35 justified
on certain specific grounds.

Definition of quantitative Restrictions:

“...measures which amount to a total or partial restraint of, according to the circumstances, imports,
exports or goods in transit.” (Geddo v Ente Nazionale Risi). Thus, these are restrictions on the quantity
of imports such as bans and quotas.

Definition of measures having Equivalent Effect to Quantitative Restrictions (MEQRs):

“All trading rules enacted by member states which are capable of hindering, directly or indirectly,
actually or potentially, intra-community trade” (Procureur du Roi v Dassonville).
Thus, MEQRs are State’s rules which hinder trade among MS. These rules fall into two
different categories:

1. Distinctly Applicable MEQRs = measures which do not apply equally to domestic and imported
goods (see Art. 2 of Directive 70/50 ).
Art. 36 TFEU introduces some derogations to the prohibition contained in Article 34 TFEU. This means that distinctly
applicable MEQRs are allowed if they do not constitute either a means of arbitrary discrimination in relation to foreign
products or a disguised restriction on trade between Member State and if they are proportionate.

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2. Indistinctly Applicable MEQRs = measures which apply equally to imported and domestic
goods (see Art. 3 of Directive 70/50) Governed by the presumption of Mutual Recognition (Cassis
de Dijon).

Indistinctly applicable rules: Cassis de Dijon

The Cassis de Dijon judgement (1979) confirmed for the first time that Article 34 covers measures
applying in the same way to domestic and imported goods (indistinctly applicable measures).

On the basis of this judgement has also been built the principle of mutual recognition (also
known as the principles of equivalence). Mutual recognition means that a Member State cannot,
in principle, prohibit the sale on its territory of goods which are lawfully produced and
marketed in another Member State, even if those goods are produced to technical or
qualitative descriptions that differ from those required of its own goods.

In so far as the goods in question meet, to an equivalent extent, the legitimate objective which its
legislation is designed to achieve (such as protection of human health or of the environment ), the
importing Member State may not prohibit the sale of such goods on its territory on the grounds that
the means of achieving that objective differ from those imposed on domestic goods.

The importation and marketing of goods lawfully produced and marketed in another Member State
may only be restricted in the absence of harmonisation by rules of a MS only where such rules :

 Are necessary in order to satisfy mandatory requirements such as the effectiveness of

fiscal supervision, the protection of public health, the fairness of commercial transactions
and the defence of the consumer,
 are proportionate to the desired objective (proportionality test).

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MS rules on Selling arrangements

In principle, selling Arrangements imposed by the legislation of MS are not MEQRs so long as they
apply to all relevant traders operating within the national territory (i.e. if selling arrangements do
not discriminate between domestic and foreign products. However…

Indistinctly applicable rules: Keck and selling arrangements

Another important judgement concerning the scope of application of article 34 is the Keck and
Mithouard case (1993) in relation to rules on selling arrangements (in that case a rule against
selling goods below their purchase price). The judgement has been clarified by subsequent case
law. The rules on selling arrangements relate to matters extrinsic to the goods themselves such
as when, where, by whom and at what price goods may be sold. From the judgement one can
conclude that rules on selling arrangements indistinctly applicable to domestic and imported
goods fall outside the scope of application of article 34.

HOWEVER:

The exclusion of selling arrangements from the ambit of Article 34 is moreover subject to two
important qualifications:

First, it is open to the ECJ to characterize rules which affect selling as part of the product itself,
and hence within the ambit of Article 34. (See: Familiapress).

Secondly, even if a rule is categorized as being about selling, it will still be within Article 34 if
the rule has a differential impact, in law or fact, for domestic traders and importers (See: De
Agostini and Gourmet).