FREE MOVEMENT OF GOODS PART II :

NON- MONETARY BARRIERS

 Article 34 TFEU ( ex 28 EC): Quantitative restrictions on imports and all measures having
equivalent effect shall be prohibited between Member States.

 Article 35 TFEU (ex Art. 29 EC) : Quantitative restrictions on exports, and all measures having
equivalent effect, shall be prohibited between Member States.

 Article 34 and 35 of the TFEU will cover

(a) Goods
(b) State measures
(c) Trade between the member states and;
(d) Quantitative restrictions and all measures having equivalent effect.

(a) GOODS The range of goods covered is as wide as the range of goods in existence, so
long as they have economic value: In Commission v Italy defined goods as,’ within the
meaning of the ... Treaty, there must be understood products which can be valued in
money and which are capable, as such, of forming the subject of commercial
transactions’.No legal aid/ charity will qualify for Article 34/35 TFEU .In its rulings the
Court of Justice has clarified on several occasions the proper designation of a
particular product. The following were considered as goods
1. Works of art Thompson [1978] ECR 2247
2. Coins which are no longer in circulation as currency Bordessa and Others
[1995] ECR I-361
3. Bank notes and bearer cheques are ci Persche [2009] ECR I-359
4. Waste is to be regarded as goods even when it is non-recyclable, but the
subject of a commercial transaction.
5. Electricity Almelo v Energiebedrijf Ijsselmij
6. Natural Gas Commission v France

Not considered as goods:Television signals Sacchi [1974] ECR 409

(b) STATE MEASURES: Articles 34–35 TFEU deal with measures taken by the
Member States. In this context, however, ‘Member States’ have been
interpreted broadly
1. In the joined cases Aragonesa de Publicidad Exterior and Publivía [1991]
to include all the authorities of a country, be they central authorities, the
authorities of a federal state or any other territorial authorities
 2. The requirements laid down by these articles apply equally to law-
making, judicial or administrative bodies of a Member State Allen &
Hanburys [1988] ECR 1245.
3. This evidently covers measures taken by all bodies established under
public law as ‘public bodies’.
4. In Commission v Ireland (Buy Irish) [1982], the Irish Goods Council was
found to have state funding and direct state involvement in the
appointment of its Management Committee. As such, the Council was a
public authority capable of issuing relevant state measures. The Court of
Justice held that its activities were, therefore, subject to Article 34 TFEU

 The mere fact that a body is established under private law does not
prevent the measures it takes from being attributable to the state .In
the joined cases R v Royal Pharmaceutical Society of Great Britain [1989]
ECR 1295; Case C-292/92 Hünermund and Others [1993] ECR I-6787 , the
Court held that measures taken by a professional body which has been
granted regulatory and disciplinary powers by national legislation in
relation to its profession may fall within the scope of Article 34 TFEU.

(c) QUANTITATIVE RESTRICTIONS / MEQR :

Quantitative Restriction:

1. The notion of a quantitative restriction was defined in Geddo v Ente

Nazionale Risi [ 1973] ‘measures which amount to a total or partial
restraint of, according to the circumstances , imports , exports or
goods in transit.
2. A quantitative restriction may be based on statutory provisions or
may just be an administrative practice. Thus, even a covert or
hidden quota system will be caught by Article 34 TFEU.An example
of a quantitative restriction is the Spanish Provision at issue in
Establissements Delhaize Freres et Compagnie Le Lion SA and AGE
Bodegas Unidas Spanish laws set quota on the bulk export of its wine
whilst placing no restrictions on domestic sales. When Delhaize from
Belgium ordered 3,000 hectoliters of the wine , the export was not
permitted under the Spanish rules. The law was held to be a QR on
exports and illegal under Article 35 of the TFEU ( ex Article 29)

MEASURES HAVING EQUIVALENT EFFECT:

1. Meaning of a MEQR :
 Facts of Procureur du Roi v Dassonville : 7, Dassonville was prosecuted in
Belgium for selling Scotch whisky without the certificate of origin required by
Belgian law. He had imported the whisky from France where such a certificate
was not required and thus argued that the Belgian rule prevented the free
movement of whisky from France to Belgium.
The ECJ agreed, and said that Article 34 TFEU covers: all trading rules enacted
by Member States which are capable of hindering, directly or indirectly,
actually or potentially, intra-Community trade.

This definition focuses on ‘hindrance’ rather than discrimination. Because the

certificate was less easy to obtain for a foreign importer than for a Belgian
distributor buying direct from the manufacturer, the Belgian requirement was
a MEQR in breach of Article 34 TFEU. The Court acknowledged that Member
States might need to have reasonable measures to protect consumers, but
these should not be more difficult for some importers than others to comply
with.According to Craig and De Burca ‘ the crucial element in proving a MEQR
is its effect; a discriminatory intent is not required

2. Types of MEQR : The directive 70/50 is a non- binding guideline

which made a distinction between two types of MEQRS namely :

(i) According to Article 2 of the Directive 70/50 distinctly

applicable measures are measures, which are clearly
discriminatory and apply only to foreign goods.
(ii)According to Article 3 of the Directive 70/50 indistinctly
applicable measures apply both to domestic and foreign goods
equally in law, but may have an adverse effect in fact.

3. Approach to distinctly applicable measures

(i) Commission v Ireland ( the buy irish case) – a national

campaign giving preference to domestic goods amounted to
a distinctly applicable measure.
(ii) Firma Denkavit Fittermittel GmbH v Minister Fur Ernhgung -
a requirement that imported goods should be inspected held
to be a distinctly applicable measure because of the delays
in the inspections process and the increased transport cost.

4. Approach to indistinctly applicable measures

The case of Casis Dijon is noteworthy for the following reasons :

(i) It expressly extended the reach of Article 28 (Article 34) EC to
catch indistinctly applicable measures. In Casis the rule at
issue was the German requirement that fruit liqueurs must
have alcohol strength of 25 percent. The French black currant
liqueur, ‘ Cassis ‘, had strength of 15-20 percent and therefore
could not be sold in Germany. The German rule, although
apparently not discriminatory, in fact made it impossible for
French manufacturers to export Cassis to Germany. To change
the strength would be uneconomic. The German rule
effectively amounted to an import ban.

Although such rules apply equally in law, in fact they do

impose an extra burden on imported goods. This is because
domestic goods have been manufactured to comply with the
rules applicable in their home state but now also have to
comply with the rules of the importing state. Thus the
exporter has to satisfy two sets of rules. Whereas goods sold in
the domestic market will only have to comply with one set of
rules, those of the home state. Indistinctly applicable rules
are referred to as dual burden rules.

(i) It brought it the concept of the principle of mutual

recognition:In this case, the ECJ laid down the ‘ principle of
mutual recognition ‘, that is, that the goods, ‘lawfully
produced and marketed in one Member State should be able
to be freely marketed in all others. The Court also ruled in
Cassis that, where there are no harmonized Community
rules on the matter in question, Member States can still have
their own rules for domestic producers, but they can require
imported goods to comply with their national rules only if
the following conditions are fulfilled:
(ii) The Cassis ‘ mandatory requirements’: The so- called
‘mandatory requirements doctrine’, which has its origins in
the Cassis ruling provides an additional list of grounds on
which Member States can justify imposing their national
rules on imported goods, but unlike Article 30 EC grounds ,
mandatory requirements can only justify indistinctly
applicable rules.The list of mandatory requirements is not a
closed group. The list by the court is not exhaustive- and no
doubt new issues of public concern can be added .It is more
flexible than Article 30 EC. The original four mandatory
requirements were consumer protection, fiscal measures,
public health and fairness of commercial transactions. Since
then other public interests have been added, such as
environmental protection , media pluralism , preservation of
national culture ( emphasis added later).
5. MEASURES WHICH FALL OUTSIDE THE SCOPE OF AN MEQR :

(i) The case of Keck and Mithouard limited the scope of an

MEQR :Almost 20 years after Dassonville, the Court found it
necessary to point out some limitations to the scope of the
term ‘ measures having equivalent effect’ in Article 34 TFEU.
arrangements’ are exempt from In Keck and Mithouard
(case c-267/91) [1993] ECR I-6097, the French legislation
banned the resale of goods at a lower than the purchase
price, a form of predatory pricing. Such laws are designed to
stop powerful companies from abusing position and
distorting the market by undercutting smaller rivals. Two
supermarket managers Bernard Keck and Daniel Mithouard,
were prosecuted under this legislation for reselling products
(coffee and beer, respectively) at lower than their purchase
price. The two men argued that the French law hindered
trade, and they relied on Article 34. The ECJ introduced the
concept of ‘selling arrangements’. In the present case, the
French rules were held to be ‘selling arrangements’ and
therefore fell outside Article 34.

(ii) In the landmark ruling in Keck and Mithouard(1993), the ECJ

announce that there was distinction to be drawn between:

Product requirements: these are laws regulating the goods

themselves, which are still governed by Article 34 and the
Dassonville formula and are prohibited. Such rules are prima
facie contrary to EU law and require justification under
either article 36 or Cassis de Dijon (1979) principles. These
rules which are referred to as the dual-burden rules impose
requirements that maybe applied in the state of origin,
creating an extra burden for producers. The cube shaped
requirement in Walter Rau is an example.

Selling arrangements: these are laws connecting not the

goods themselves, but rather how, when and where they are
marketed. They are described as ‘equal burden’ because
they impose an equal burden on domestic and imported
products. They have an impact on the overall volume of
sales, and therefore on imports, but they have no greater
impact on imported products than on domestic products.
The rules fall outside of the scope of article 34 altogether
and hence de not require justification. In Keck, the ECJ said
that these rules were prima facie lawful, although they were
subject to two preconditions.
(iii) Examples of selling arrangments

 Sunday trading legislationPrior to Keck, the ECJ’s

policy was that national legislation regulating the
freedom of retailers to trade on Sunday infringed
Article 34 because it had the potential to reduce intra-
Community trade. One such example was the UK’s
Shops Act 1950 (subsequently amended by the Sunday
Trading Act 1994). In Torfaen BC v B&Q plc(1989) and
Stoke-on-Trent CC v B&Q plc(Case C-169/91) [1992]
ECR I-6635 the ECJ held that Article 34 was infringed.
However, after Keck, the ECJ held that Article 34 did
not apply to such legislation at all. This new approach
was set down in a series of cases concerning Italian
Sunday trading legislation (Punto casa and PPV (Cases
C-69 and 258/93) [1994] ECR I-2355, and Semeraro
Casa Uno and Others(Cases C-418 to 421/93) [1996]
ECR I-2975.

 Opening hours :In Tankstation t’ Heukske and J B E

Boermans(Cases C-401 and 402/92)[1994] ECR I-2199,
concerning Dutch rules on the opening hours of petrol
stations, the ECJ stated the rules laid down Keck were
satisfied. National licensing legislation (such as that in
England and Wales, whereby the normal closing hours
for public houses is 11p.m.) would also within this
heading.

 Sale of goods only through specific outlets ;With the

benefit of hindsight, the case of Quietlynn(1990) ) falls
into this category. UK legislation allowing only licensed
retailers to sell alcohol would be classified as a selling
arrangement. Another example is Commssion v Greece
(processed Milk) (Case C-391/92)[1995] ECR I-1621,
where Greek legislation prohibited the sale of
processed milk for infants except from pharmacies. The
ECJ stated that the Greek rules concerned selling
arrangements, and not goods themselves, and were
therefore exempt freedom Article 34. In Banchero,
Italian law reserved the sale of tobacco products to
authorised retail outlets only. The ECJ disagreed;
following Keck and Mithouard, the Dutch rules simply
constituted a selling arrangement. This case clearly
demonstrated the purpose of the Keck judgment,
preventing the Union system from being clogged up
with issues not relating to market access: the Court did
not want to extend Article 34 TFEU in such a way as to
become embroiled in what are essentially questions of
domestic policy. Such cases also reveal that selling
arrangements relate to measures determining when or
how goods may be sold. Furthermore, the Processed
Milk case shows that selling arrangements include by
whom and where products are sold.

Regulating designated methods of sale were also

considered in Ker-Optika, where contact lenses were
required by Hungarian law to be only sold in speialised
shops or by ‘home delivery for final consumption’. The
claimant company operated online with delivery
through mail order. The Court noted that the limitation
on the mailing of the products to which the ‘electronic
contract’ had pertained ‘deprives traders from other
Member States of a particularly effective means of
selling those products and thus significantly impedes
[market] access’ and therefore did not fulfil the Keck
criteria of applying equally in fact as well as law.

An interesting example of where the Court held that a

‘selling arrangement’ discriminated against foreign
traders in fact is: Case 254/98 Schutzverband gegen
unlauteren Wettbewerb v TK-Heimdienst GmbH
[2000] ECR I-151. Under the Austrian Code of Business
and Industry 1994, traders such as bakers, butchers
and grocers were only permitted to sell on rounds from
locality to locality or from door-to-door those goods
which they also sold from a permanent establishment
in the area or in an adjacent municipality. The
Schutzverband, an association for the protection of the
economic interests of undertakings, brought an action
against TK-Heimdienst to restrain it from offering for
sale on rounds groceries which it did not sell in
permanent establishments in that municipality or any
adjacent one. The Court held that the legislation in
question related to ‘selling arrangements for certain
goods’ but that it did not affect in the same manner the
marketing of domestic products and that of products
imported from other Member States. As such, the rule
did not apply equally in law and in fact but rather
impeded access to the market of the Member State of
importation for products from other Member States
more than it impedes access for domestic products.
Therefore the Austrian law did fall within the scope of
 Article 34 TFEU despite being described by the Court of
Justice as a selling arrangement

 Restrictions on certain forms of sale promotions

In a pre-keck case, Oostheok’s(Case 286/81)[1982] ECR

4575, the ECJ ruled that Dutch legislation prohibiting,
the legislation prohibiting the offering of free gifts as a
sales promotion strategy was prohibited by Article 34,
Similarly, in Buet and EBS (Case 382/87) (1989) ECR
1235, the ECJ ruled that very similar French legislation
prohibiting door –to-door canvassing of educational
materials could hinder trade. However, it can now be
argued that the Dutch and French laws in question
were ‘selling arrangements’.

For example, in Burmanjer&Others (Case C-20/03)

(2005) ECR 1-4133, three Dutch nationals were accused
of breaching Belgian legislation prohibiting the sale of
subscriptions to periodicals (such as magazines) on the
street without prior authorization. In their defence
they argued that the Belgian law was contrary to
Article 34. The ECJ, however, held that the legislation
was a selling arrangement and therefore exempt from
Article 34. This was because the legislation did not ban
the product, or even the sale of it, it simply banned one
method of sale.

However, Familiapress v Heinrich Bauer Verlag [1997]

ECR I-3689 concerned Austria’s law on ‘unfair
competition’ which prohibited the offering of large
cash prizes for competitions in magazines. Familiapress
(a publisher of newspapers in Austria) brought
proceedings against a German publisher of weekly
magazines which were being sold in Austria and which
offered large cash prizes for crossword competitions.
This was held not to be a selling arrangement under
Keck, because [the law] bears on the actual content of
the products... the competitions in question form an
integral part of the magazine... Since it requires
traders... to alter the contents of the periodical… [it is
an MEQR and therefore falls within the scope of Article
34 TFEU]. .

In Mars [1995] ECR I-1923 where a promotion printed

on the wrapper of the Mars bar was part of the
product itself.
 Restrictions on advertising

In GE –INNO- BM (Case 362/88) (1990) ECR 1-667, the

ECJ was asked to rule on the compatibility of Article 34
with Luxembourg legislation preventing advertising
campaigns that made reference to the pre-sale of a
product. The ECJ held that the legislation was
prohibited by Article 34 because it was capable of
hindering trade. Similarly, in Aragonesa and Publvia
(1991), the ECJ held that national legislation prohibiting
the advertising of alcohol over certain strength in mass
media, on streets and highways, in cinemas and on
public transport fell within the Dassonville formula.

After Keck, it has become clear that national rules

imposing partial restrictions on advertising, at least, are
not caught by Article 34. In Hunermund (Case C -
292/92) (1993) ECR 1-6787, concerning German
legislation preventing pharmacists from advertising on
the radio, on TV or at the cinema, the ECJ stated that
the conditions in Keck were satisfied and the German
legislation was therefore exempt from Article 34. The
ECJ reached the same conclusion in Leclerc-Siplec
(Case C – 412/93) (1995) ECR 1-179, concerning French
legislation prohibiting TV advertising by the distribution
sector (which included petrol companies) and in PRO
Sieben Media (Case C -6/98) (1999) ECR 1-7599,
concerning German legislation on the division of time
between programmes and advertising on German
television. As will be seen below, however, national
rules imposing total prohibitions on advertising are not
‘selling arrangements’ and continue to be caught by
Article 34.

In Leclerc – Siplec (Case C -412/93) (1995) ECR 1-179,

the French legislation prohibited the advertising on TV
of, or by, the following: alcohol over 1.2 percent proof;
literary publications; the cinema; the Press; the
distribution sector. The idea was to get those sectors to
advertise in regional newspapers instead, thereby
protecting the particular industry. L-S, petrol
distributors, were denied access to French TV
advertising by TF 1 Publicite and M6 Publicite, two
advertising companies, L-S argued that the French law
 was incompatible with Article 34. The ECJ held that
Article 34 did not apply; it was a ‘selling arrangement’.

In two cases, concerning a total ban in advertising, the

CJ held that Art 34 TFEU did apply. De Agostini[1997]
concerned the legality of advertising laws in Sweden,
which prohibited advertising designed to attract the
attention of children under 12. The CJ was of the view
that the advertising ban may not satisfy the Keck test in
its entirely. It accepted that the advertising rules may
amount to a selling arrangement and fall outside the
scope of Art 34 TFEU, but it was not clear whether the
ban applied equally to all traders in law and in fact. It
held that, ‘it cannot be excluded that an outright ban,
applying in one Member State, of a type of promotion
for a product which is lawfully sold there might have a
greater impact on products from other Member States’
(para 42). It was for the national court to determine
whether the second limb of the Keck test had been
satisfied and whether the national law could be
justified under Art 36 TFEU or one of the Cassis
mandatory requirements.

In another case, the Court decided that another

Swedish advertising law, effectively prohibiting any
advertising of alcohol, did infringe Art 34 TFEU. In
Gourmet Internationale Products [2001], the CJ found
that this was likely to have a greater impact on
imported alcoholic products than on Swedish alcoholic
products with which Swedish consumers were more
familiar. The Court held ‘. . . a prohibition of all
advertising . . . is liable to impede access to the market
by products from other Member States more than it
impedes access by domestic products, with which
consumers are instantly more familiar . . . A prohibition
on advertising . . . must therefore be regarded as
affecting the marketing of products from other Member
States more heavily than the marketing of domestic
products and as therefore constituting an obstacle to
trade between Member States. . .’

 Requirements as to how goods are presented in shops

It is well established that national rules imposing

packaging requirements on products constitute
measures equivalent to quantitative restrictions
 (Walter Rau v De Smedt (1982) being the classic
example). However, in Morellato(Case C-416/00)
(2003) ECR 1-9343, the ECJ decided that a requirement
under Italian law that bread had to be sold wrapped
constituted a selling arrangement. The crucial
difference between Walter Rau (Article 34 and
Dassonville applies) and Morellato (2003) (Keck
applies) seems to be that in the former case the onus is
placed on the manufacturer, while in the latter
situation the onus is placed on retailer. In Morellato,
the ECJ state that the bread could be imported
unwrapped and then sold wrapped, with the retailer
carrying out the wrapping task. In this way, the
wrapping could be regarded as ‘a simple
transformation process’ and was therefore incapable of
restricting the free movement of goods.

 Price Controls

Prior to Keck, it had been held that price controls (that

is, national rules imposing either maximum or
minimum prices on certain products, or rules
preventing retailers from selling goods at a loss) could
infringe Article 34. However, price controls have now
been reclassified as selling arrangements (Keck itself is
such a case, as is Belgapom (Case C-63/94) (1995) ECR
1-2467, where Keck was applied)

 Restrictions on the use of names:

In Case 315/92 Clinique [1994] ECR I-317, a German

law prohibited the use of the name ‘Clinique’ for
cosmetics because the consumer might be confused
and think that the product had medicinal properties. It
was held by the Court of Justice to be disproportionate
to the objective of consumer protection and the health
of humans.

(iv) End of Keck ?

The application of the Keck test continues to trouble the CJEU.

Two rather peculiar cases were recently brought to the
attention of the CJEU:
 In Commission v Italy [2009] ECR I-519 the Commission
claimed that Italy had failed to fulfil its obligations under
Article 34 TFEU by maintaining rules that prohibit mopeds,
motorcycles, tricycles and quadricycles from towing a trailer.
The European Court examined whether Italian law had to be
considered as in breach of the Treaty with regard to trailers
that were specifically designed to be towed by motorcycles
and that were legally produced and marketed in Member
States other than the Italian Republic. The Court found that
the national prohibition constituted a measure having
equivalent effect to quantitative restrictions on imports within
the meaning of Article 34 TFEU. The interest of the decision
lies in the Court’s dismissal of a possible application of the
Keck threshold. The Court implicitly rejected a possible
extension of Keck to ‘use arrangements’ and embraced what
could be concisely termed as an ‘access to market’ test.

In Mickelsson [2009] the question was whether restrictions

imposed by Swedish law (whose breach was strictly
sanctioned) on the use of jet skis on inland waters could be
considered as an obstacle to free movement of goods. The
Court, relying on Cassis de Dijon case law, held that even if the
national regulations at issue do not have the aim or effect of
treating goods coming from other Member States less
favourably, the restriction which they impose on the use of a
product in the territory of a Member State may, depending on
its scope, have a considerable influence on the behaviour of
consumers, which may, in turn, affect the access of that
product to the market of that Member State. It is, therefore,
to be concluded that restrictions on product uses will not be
‘saved’ under the Keck test. It should, however, be noted that
in both cases, Italian Mopeds and Mickelsson, the Court found
that the measures in question could be justifiable on the
grounds of public aims such as road safety or protection of the
environment.

DEFENCES TO MEQRS

Derogations under Article 36

It allows Member States an exemption from one of the fundamental freedoms and
can be used to justify both distinctly applicable and indistinctly applicable rules, the
Court has construed Article 36 TFEU narrowly.

(a) Public morality

In R v Henn and Darby [1979] English customs legislation prohibited imports

of pornographic films and magazines, despite there being no absolute ban on
trade on similar material in the Uk. It was held that it was for member states
 to determine the requirments of public morality, the Court of Justice
accepted the Uk's argument that the legislation was justified on public
morality/.

In Conegate Ltd v HM Customs and Excise [1986], the Court confirmed that
Article 36 TFEU must not be used to support ‘arbitrary discrimination or
disguised restrictions’. In this case, the UK ban on inflatable ‘love dolls’ from
another Member State was disproportionate since, within the United
Kingdom, sale of such products was not banned, although there were certain
restrictions on how and where they could be sold.

(b) Public policy

Public policy has been interpreted narrowly by the Court of Justice. This
ground cannot be used as a general justifcation embracing more specific
defences such as consumer protection; Commission v Italy ( Re Ban on Pork
Imports) or purely economic reasons; Commission v Italy [1982] ECR 2187).

It was, however, successfully pleaded in

In R v Chief Constable of Sussex Exparte International Trader's Ferry ITF Ltd

[1999] animal rights protesters were blockading the port of Shoreham, trying
to prevent the exprt of veal calves into France. ITF challenged the Chief's
Constable's decision that the protection for the lorries can only be provided
for 2 days a week because of limited police resources. The Divisional Court
agreed that the decision was a restriction on exports, contrary to Article 35
TFEU, but the ruling was reversed with the Court of Appeal and the House of
Lords accepting the public policy justification : namely that the state's
responsibility to ensure that FMG should be balanced with the right of
residents to policing and the right of peaceful protests.

In R v Thompson Uk law in force prohibited the importation of gold coins

and export of silver alloy coins minted before 1947. The prohibition on the
import and export of collector's coins was justified on public policy grounds,
recognizing the State's need to prtest its right to mint coingae and to protect
coinage from destruction.

(c) Public security

In Campus Oil [1984], importers of oil products into Ireland were obliged to
buy a proportion of their requirements from the state oil refinery. It was
argued that this was a breach of Article 34 TFEU. The Court of Justice said
that the maintenance of regular oil supplies, which were fundamental to the
existence of the state, was a legitimate aspect of public security. However,
the Court questioned whether the compulsory purchasing requirement, at a
 price above the world market price, was necessary to ensure the survival of
the state oil refinery. As it was a preliminary reference, these issues of fact
were left to the national court but the judgment shows clearly the Court’s
approach to the Article 36 TFEU derogations. It is not enough for the Member
State to invoke a legitimate objective covered by Article 36 TFEU, it has also
to show that the measure in question is necessary for that purpose and
proportionate. That means asking whether there is any other way of
achieving the objective which would be less of a restriction on the free
movement of goods.

(d) The protection of health and life of humans, animals and plants

For this derogation to apply, the Court of Justice will consider whether the
risk to health is genuine, or a disguised trade restriction (Commission v UK
(Re Imports of Poultry Meat) [1982]). Public health inspections of imports
from other Member States have attracted close scrutiny from the Court. Any
inspection is, in principle, an MEQR because even if there is no charge, it
causes delay and is a hindrance to importation. The importing state must
take into account evidence of any tests already complied with in the
exporting state, and only if it can show those are insufficient can it require
additional tests .

Protection of life of humans :

In Klas Rosengen and Others v Riksaklagaren[1983] The latter case

concerned a Swedish measure prohibiting the import of alcoholic beverages
by private individuals into Sweden. Instead the individuals had to ask the
holder of the retail sale monopoly to supply and, if necessary, to import the
alcoholic drinks in question. The Court found that the measure was
unsuitable for attaining the objective of limiting alcohol consumption
generally and not proportionate for attaining the objective of protecting
young people from the harmful effects of such consumption. Therefore, the
measure fell under the scope of Article 34 TFEU and was not justified under
Article 36 TFEU.

In FransNederlandse Maatschappij voor Biologische Producten [1981] and

Klas Rosengren v Riksåklagaren [2007] The Court will take into account the
attitude of other Member States and of international health bodies such as
the World Health Organisation when assessing whether particular products
pose a real risk to health.

In Commission v Germany (Additives in Beer) [1987] Germany prohibited a

large number of additives in beer, which were permitted in other Member
States. The Court of Justice was not swayed by the argument that they posed
an increased danger to German consumers because so much beer was
consumed in Germany!

Protection of life of animals :

 In Criminal Proceedings against Ditlev Bluhme [1998] concerned the
protection of the life of animals under Article 36 TFEU. It was held that a ban
on imported bees into the Danish island of Laeso to protect the native bee
from more aggressive species was justified and proportionate.

The precautionary principle : where the health is unclear :

Where the available scientific evidence on the health impact of particular

substances is unclear, the Member State concerned can decide what level of
protection is appropriate, subject to the precautionary principle; Commission
v Denmark.

In Sandoz [1983] , which concerned vitamins added to muesli bars, the Court
found that: in so far as there are uncertainties at the present state of
scientific research it is for the Member States, in the absence of
harmonisation, to decide what degree of protection of the health and life of
humans they intend to assure, having regard however for the requirements
of the free movement of goods within the Community (para.16).

In Commission v Denmark [2003, the Court confirmed that Member States

can adopt their own precautionary measures in situations where the precise
risks to health are uncertain, but said that any such precautions must be
necessary and proportionate.

The greater the uncertainty, in science and in practice, the greater the
Member State’s discretion to apply the precautionary principle. It does not
need to wait until the existence and extent of the risks are clearly
established. For example, Commission v Netherlands [2004] ECR I-11375, the
Court said that the proper application of the precautionary principle requires:

the identification of the potentially negative consequences for health

' a comprehensive assessment of the risk for health based on the most
reliable scientific data available and; the most recent results of international
research where data on the existence or extent of the alleged risk is
insufficient, inconclusive or imprecise, ‘but the likelihood of real harm to
public health persists should the risk materialise, the precautionary principle
justifies the adoption of restrictive measures’. The burden of proving that a
particular substance is harmful lies with the Member State.

An example of a Member State failing to discharge this burden can be found

in Case Commission v Italy (Caffeine) [2003] – READ FOR HOMEWORK

(e) Protection of national treasures

No case has suceeded on these grounds. In any event it is more likely to apply
to measures taken in respect of ecports. For example a national law
preventing art treasures leaving a country might be justified; Commission v
Italy.
 (f) Protection of Industrial and Commercial Property

In Belgium v Spain (Rioja wine Exports) [2003] the ECJ upheld the provisions
of Spanish law requiring Rioja wine Intended for exports to be bottled in the
La Rioja region. Although prima facie in breach of Article 35 TFEU, the
legislation was justified. This was because Rioja wine enjoyed an international
reputation for high quality which might be tarnished if wine is transported
out of the region in bulk and then bottled elsewhere

The Cassis de Dijon ‘mandatory requirements’

The ‘mandatory requirements doctrine’ provides an additional list of grounds on

which Member States can justify imposing national rules on imported goods. But,
unlike Article 36 TFEU, mandatory requirements can only be used to justify
indistinctly applicable rules. The list of mandatory requirements is not exhaustive
and will no doubt continue togrow as new issues of public concern emerge.

The original four ‘mandatory requirements’ were consumer protection, fiscal

measures, public health and fairness of commercial transactions. Since then, other
public interests have been recognised as sometimes justifying restrictions on the free
movement of goods, including: environmental protection, media pluralism and
preservation of national culture.

(a) Consumer protection

In Walter Rau [1982] Belgian rules stated that margarine sold in Belgium must
be packaged in cube-shaped containers. Belgium based its case on the
mandatory requirement of consumer protection: that the packaging rule was to
prevent confusion with butter. The result of the rule was to make imports of
margarine from countries where margarine is normally packaged in tubs or
rectangular blocks more difficult or impossible as repackaging would make the
sale uneconomic. The Court held that the rule could not be imposed on imported
margarine because it was disproportionate – clear labelling would be enough to
prevent confusion with butter and thus protect the consumer.

Despite this, the consumer protection arguments were upheld in other cases
such as case Oosthoek [1982] ECR 4575 (the use of free gifts to sell
encyclopaedias) and Buet [1989] ECR 1235 (doorstep-selling of educational
materials). However,there is doubt as to whether these cases would be decided
in the same way today, inview of the ruling on selling arrangements in Keck).

(b) Public health

The Court of Justice has ruled that as Article 36 TFEU provides for derogation on
this ground, the Treaty Article should be used in preference to ‘mandatory
requirements’;APESA v DSSC (Aragonesa) [1991).

(c) Protection of the environment

In Commission v Austria [2005] Austria had put in place a banon lorries of over
7.5 tonnes transporting certain goods (such as waste, stone, timber) using the
A12 highway for a distance of 46 kilometres. The road is a key transit
routebetween the south of Germany and Italy.The Court of Justice accepted that
this was justified under the mandatory requirement of ‘protection of the
environment’ but held that it was not proportionate. The Austrian measures
therefore fell within the scope of Articles 34 and 35 TFEU and, although justified,
were not proportionate.

(d) Culture

This was added to the list by Cinéthéque, where French legislation prohibited
the sale or rental of films on video until 12 months had elapsed since that film’s
debut at the cinema. This was challenged by the French video retail chain,
Cinéthéque, and the case was referred to the ECJ. There it was acknowledged
that this rule was capable of restricting trade (other Member States allowing
films to be released on video much more quickly than that) but it was justified
because it encouraged cinema attendance. The ECJ stated it must be conceded
that a national system which, in order to encourage the creation of
cinematographic works irrespective of their origin, gives priority, for a limited
initial period, to the distribution of such works through the cinema, is so justified.

(e) Protection of national or regional socio-cultural characteristics

In Torfaen BC v B&Q plc [1989] , which concerned the legality of British Sunday
trading legislation, the ECJ first coined the phrase ‘sociocultural characteristics’
to describe this mandatory requirement. B&Q had been prosecuted for opening
its shops on Sundays in breach of UK law. In its defense, B &Q argued that the
ban on trading on Sundays (save for certain goods) was in breach of Art 34 TFEU,
since the effect of the law was to reduce its total turnover by 10 per cent with a
corresponding reduction in the number of sales of imports. On a reference from
the UK court, the CJ accepted that prima facie, the national law fell within the
scope of Art 34 TFEU (formerly Art 28 TEC) as defined in Dassonville.
Nevertheless, it held that the national rules governing the opening hours of retail
premises ‘reflect certain political and economic choices in so far as their purpose
is to ensure that working and non-working hours are so arranged as to accord
with national or regional socio-cultural characteristics, and that, in the present
state of Community law, is a matter for Member States’. The CJ added that such
rules must comply with the principle of proportionality, a matter to be
determined by the national court. Furthermore, it was held that the prohibition
on Sunday trading, although capable of hindering trade, was justifiable.
 (f) Plurality of the press

This was added to the list in 1997 by Familiapress, concerning a prohibition in

Austrian legislation on newspapers offering cash prizes to competition winners.
The ECJ decided that the Austrian legislation was justifiable in the interest of
helping smaller publishers to survive against fierce competition from larger
publishers (who had the potential to offer bigger prizes), thereby promoting a
diverse newspaper industry. The ECJ stated ‘Maintenance of press diversity may
constitute an overriding requirementjustifying a restriction on free movement of
goods. Such diversity helps to safeguard freedom of expression.’

(g) Protection of fundamental rights

In Schmidberger v Austria, the ECJ stated that the protection of fundamental

rights ‘is a legitimate interest which, in principle, justifies a restriction of…the
free movement of goods’. The case involved a decision made by the Austrian
authorities to allow a road to be closed for the purposes of a demonstration. The
Court acknowledged that the authorities had been placed in a difficult
position,having to balance the right of transport companies to enjoy the free
movement of goods under Art.s 34and 35, on one hand, against the rights of the
demonstrators to enjoy the freedoms of expression and assembly, under Art.s 10
and 11 of the European Convention on Human Rights, on the other. The ECJ held
that no breach of EU law had occurred.

The principle of proportionality :

- Derogations + Mandatory requirements go in line with proportionality

 In order to be justified under Article 36 TFEU or one of the mandatory

requirements established in the case law of the Court of Justice, a state
measure has to comply with the principle of proportionality.
 The measure in question has to be necessary in order to achieve the desired
objective; the objective could not be achieved by less extensive prohibitions
or restrictions having less effect on intra- EU trade.
 In other words, the means chosen by the Member States must be confined to
what is actually appropriate to safeguard the objective pursued, and must be
proportional to the said objective.
 The Member State has an obligation to opt for the ‘ less restrictive alternative
‘ and failure to do so will constitute a breach of the proportionality principle.

Article 35 TFEU and exports

Unlike the prohibition in Article 34 TFEU, the prohibition in Article 35 TFEU generally
encompasses only discriminatory measures. Indistinctly applicable measures – that
is, those that apply equally to national products and to exports – do not generally fall
under the scope of this provision .

In Jersey Produce Marketing Organisation Ltd v States of Jersey [2005], the Court
declared incompatible with Article 35 TFEU a series of rules imposed by Jersey on the
export of potatoes to the United Kingdom. These included, for instance, the
compulsory registration of growers with a local public organisation, the conclusion of
marketing agreements between that organisation and operators concerned and so
on. The CJEU reaffirmed that the UK and Jersey are considered as one Member State
for the purposes of the free movement of goods (Article 1, Protocol 3 of the
Accession Treaty). The Court, reciting its previous case law, confirmed that in
customs duties cases regional barriers are obstacles to be removed exactly as intra-
EU ones. On Article 35 TFEU, the Court held that as it was conceivable that such
potatoes, once within the United Kingdom, might then be re-exported to other
Member States, an intra-EU element was established. In this case, the Court seems
content to establish a mere potential obstacle on export without a detailed analysis
of whether the measure had to be considered discriminatory.