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Law of the Internal Market OG 1

CASE 1 WRITTEN ASSINGMENT

When Ms Bosak seeks to have the jewels transported to Croatia, she finds out that she will have to
pay €540 per pierce of jewel to the Austrian Ministry of Arts and Culture. The contribution is stated to
fund the cultural heritage maintenance service which ensures that all Austrians are able to maintain
a certain amount of cultural heritage of said time period in Austria.

The main article of the free movement of goods within the EU is art. 26 (2) TFEU. Whether this
financial barrier is legal or not, depends on the following conditions.

1. The jewels falls underneath the definition of goods, stated by The Court in the case
Commission v Italy – Art Treasures?

= “All products which can be valued in money and which are capable of forming the subject
of a commercial transaction”

 Jewels can be valued in money

 Jewels are capable of forming the subject of a commercial transaction (you can buy and
sell it)
 If it is not a good, then we are in an entirely different area

Conclusion: Jewels are goods

2. Is there a financial restriction?

 Art. 28-30 TFEU: prohibition of customs duties and charges / charges having equivalent
effect (CEEs)
 Arts 110-113 TFEU: prohibition of discriminatory tax provisions (internal taxation)

Article 30 TFEU: Customs duties on imports and exports and charges having equivalent effect
shall be prohibited between Member States.

 In this case it is not a custom duty, but a charge having equivalent effect (CEE) because
the money is not for importing or exporting, but for another purpose.
 Commission v Italy (Statistical Levy): No matter how small the charge and whether it
benefits the state (levy means heffing)

Conclusion: There is a financial restriction

3. Can it be justified?

 Duties/CEEs caught by art. 30 TFEU are unlawful per se and cannot be justified
 The CJEU has permitted Member States two (narrow) exceptions:
- Charge imposed on imports is a payment for a service rendered by the state to the
importer
- Charge levied to cover the cost of a mandatory EU health inspection

In Commission v Italy – Art Treasures, the court made it clear that the application of article 30
TFEU depends on the effect of the duty or charge, and not on its purpose.
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 The reason of a charge doesn’t matter, if it is a charge it is not allowed.

 The heritage reason isn’t relevant
 The purpose is irrelevant (Sociaal Fonds voor Diamantarbeiders)

So are the exceptions applicable in this case?

 Charge imposed on imports is a payment for a service rendered by the state to the importer
 No
 Charge levied to cover the cost of a mandatory inspection required by EU law
 No
 Art. 110 TFEU internal taxation (exception)
 No

Conclusion: the charges cannot be justified, because it goes to the heritage of art and culture

OVERAL CONCUSION: The charges on the jewels are not allowed under EU law and prohibited by art.
30 TFEU. Seeing that art. 30 TFEU has direct effect (Van Gend & Loos, Dubois), she can go to an
Austrian court for a reimbursement (rb voor terugbetaling) (San Giorgio, Comateb). She payed the
charges, so they have to give her money back.

If she already payed there is a duty to reimburse  San Giorgo case

SCHEME: CROSSING BOARDER – Art. 30 TFEU

1. Is it a good?

The art treasures case (commission v Italy)

 valued in money
 capable of forming the subject of a commercial transaction

2. Is there a financial restriction

Article 30 TFEU = crossing a boarder (also regional: casbonati aquasi, legros)

 Custom duties (CET)  benefits state
 CEES (charges having equivalent effect)  does not benefit state, but something else
o Case statistical levies = definition CEE
 The purpose is irrelevant
o Diamantarbeiders, statistical levies, art treasures
 Not internal  art. 110 TFEU
o Differential taxes when goods are ‘in country

3. Can it be justified?

Exceptions
 Charge imposed on imports is a payment for a service rendered by the state to the
importer (Commission v Belgium - warehousing, Commission v Italy - customs offices and
Bresciani)
o Specific and direct benefit actually conferment
o Payment in proportion to the service
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o Inspections in the general interest are not a service rendered to importer

 Charge levied to cover the cost of a mandatory health inspection by the EU, because the EU
mandates this in EU law (Commission v Germany - health inspection)
o Not exceed the actual costs of the inspections
o Inspections must be obligatory and uniform
o In the general interest of the Union
o Inspection must promote the free movement of goods

SCHEME: INTERNAL – Art. 110 TFEU

1. Is it a good?

The art treasures case (commission v Italy)

 valued in money
 capable of forming the subject of a commercial transaction

2. Is there a tax?

Definition of internal taxation: “A charge is an internal tax if it relates to a general system of

internal dues applied systematically to categories of products in accordance with objective criteria
irrespective of the origin of the products” (Co-Frutta).

3. Is there an objective justification, is there a reason for the distinction of goods unrelated to
origin?

There are four justification grounds (not limitative)

 CJEU Bergandi (gambling machines)
 CJEU Commission v France (natural sweet wine)
 CJEU Chemial Farmaceutici SpA (alcohol)
 CJEU Commission v Greece (cars)

4. Are the goods similar or in competition?

When similar : art. 110, §1 TFEU

 Similarity-test (johhny walker case) = factual comparison compared to economic use
 Direct discrimination = directly related to origin and prohibited = No justification
 Indirect effect = Prohibited unless objectively justified = justification possible on the 4
grounds
When in competition : art. 110, §2 TFEU
 Cross-elasticity test (Commission v UK - beer and wine case)
 Protective effect = you need to remove it (protect own products against foreign
products)
 No protective effect = no violation
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Where the Austrian collector lives demands the symbolic payment of one or two silver coin per jewel.

1. Is it a good?  art treasures

 Yes, can be valued in money and be subject of commercial transaction

2. Is there a financial restriction?

 Yes, we are crossing a boarding according to art. 30 TFEU, also regional boarders are
included in this article. Is has an equivalent effect and it is a CEE because you have to pay
something when you cross a boarder. Purpose is irrelevant.
 Vienna is imposing the charges. It will cross a boarder

3. Can it be justified
- Service rendered  no, Vienna is not cleaning the jewels
- Inspection imposing by EU law  no

 No, the exceptions are not applicable

If the charge was already payed there is a duty to reimburse.

Conclusion: The charge is prohibited, she could go the court and invoke article 30 (direct effect).
She will get her money back.

The Croatian government has recently changed rules and the government levies a 20% eco-tax, a tax
payable by everyone in Croatia who wants to buy a car that the government deems to be excessively
bad for the environment. Modern, eco-friendly cars with a combustion engine are levied with a 5%
tax, whereas electric cars are exempt from this tax.

1. Is it a good?  give always the definition from goods from the art treasures

 Yes, cars can be valued in money and be subject of commercial transaction

2. Is there a tax?

Definition of internal taxation: “A charge is an internal tax if it relates to a general system of internal
dues applied systematically to categories of products in accordance with objective criteria
irrespective of the origin of the products” (Co-Frutta).

Commission v Germany: adding co-fruta, the same criteria need to be the same for domestic and
imported goods
It’s an general system because it applies to every car with that criteria
Is there an objective criteria to impose the taxation?

 Yes, there is a tax

3. Is there an objective justification, is there a reason for the distinction of goods unrelated to
origin?
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 Yes, justification by environment is a potential and objective justification as stated in

Commission v Greece (cars)
 Court would stop here

4. Are the goods similar or in competition?  Jonnie Walker case

 What is the test to see  cross-elasticity (commission v. UK)
 Here in the case it’s similar
 The consequences: there is no breach of EU law immediately  look to direct or indirect
discrimination

 Similar: the competition between car producers stay the same because overall, electric
cars are more expensive
 Indirect discrimination possible if they predominantly made electric cars

Conclusion: The tax is not prohibited and Ms. Bosak must pay it.

These cars would be ideal for the production, so she wonders how much she would have to pay to
import these cars from the US into Croatia (in addition to transportation costs, of course).

You can find this in the TARIC data-base. It holds 10% of the value of the car
870.390

DE INTERNE MARKT

- Wat is de interne markt?

De interne markt is één van de kerntaken van de Europese Unie volgens artikel 3, lid 3 VEU.

Artikel 26, lid 2 VWEU: De interne markt omvat een ruimte zonder binnengrenzen waarin het vrij
verkeer van goederen, personen, diensten en kapitaal is gewaarborgd volgens de bepalingen van de
verdragen

Shul arrest: afschaffing van alle belemmeringen van het intracommunautaire handelsverkeer
teneinde de nationale markten te verenigen tot één enkele markt die de omstandigheden van een
binnenlandse markt zoveel mogelijk benadert.

De economische integratie:
- Negatieve integratie: afschaffen van alle belemmeringen voor het vrije verkeer
- Positieve integratie: het nader tot elkaar brengen van nationale regelgeving, harmonisatie

Vrij verkeer van goederen (artikel 28-37 VWEU)

Definitie goederen uit Art Treasures: de waren die op geld waardeerbaar zijn en als zodanig het
voorwerp van handelstransacties kunnen vormen.

Verbod van:
- Financiële belemmeringen
- Niet-financiële belemmeringen

Financiële belemmeringen
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Artikel 30 VWEU stelt dat in- en uitvoerrechten of heffingen van gelijke werkingen tussen lidstaten
zijn verboden. Zulks geldt eveneens voor douanerechten van fiscale aard.

Heffingen van gelijke werking = een geldelijke last, hoe gering ook, die eenzijdig wordt opgelegd
wegens grensoverschrijding (zaak 24/68)

Rechtvaardiging?
Er zijn geen rechtvaardigingsgronden mogelijk voor financiële belemmeringen.

Er zijn wel heffingen die niet gekwalificeerd worden als heffingen van gelijke werking, en dus niet
verboden zijn:
- Vergoeding voor een verleende dienst
- Heffingen in uitvoeringen van een unieregeling
- Binnenlandse belastingen, een lidstaat moet belastingen kunnen heffen (artikel 110 VWEU)
Geen hogere belastingen voor gelijkaardige producten / non-discriminatoir
Nagaan welke inlandse producten gelijksoortig of substitueerbaar zijn ten aanzien van de
betrokken ingevoerde producten
Vervolgens dient worden te onderzocht in welke mate de belasting die weegt op de
ingevoerde (of uit te voeren) producten leidt tot een discriminatie van ingevoerde producten
of tot een bescherming van inlandse producten.

Niet-financiële belemmeringen
 Artikel 34 VWEU Import
Artikel 34 VWEU bepaalt dat kwantitatieve invoerbeperkingen en alle maatregelen van
gelijke werking tussen lidstaten verboden zijn.

 Artikel 35 VWEU Export

Artikel 35 VWEU bepaalt dat kwantitatieve uitvoerbeperkingen en alle maatregelen van
gelijke werking tussen de lidstaten verboden zijn.

ON EXAM: not mentioned whether a country is member of the EU or not, so we have to know them

With thirt countries there can be custom duties because they are not within the EU.