FUNDAMENTAL FREEDOMS

Lecture VII
Dr. Mamuka Andguladze, LL.M. Eur
 FUNDAMENTAL FREEDOMS
Free Movement of Goods

34 TFEU: “Quantitative restrictions on imports and all measures having

equivalent effect shall be prohibited between Member States”;

 One of the Fundamental Freedoms;

Aim:
• Ensuring the free movement of goods within the European Internal Market;
ax
 Prohibition of the obstacles set by the MS;
 Strengthening the competition;
 Ensuring the equal access and sale of the goods produced in the MS;

Based on the Free Movement of Goods a numbers of the Secondary Law is

adopted (Directive on the protection of the rights of consumers, DR
2000/13/EC);
 FUNDAMENTAL FREEDOMS

Main Criteria's:

 Cross Boarding of Goods (34 f. TFEU);

 Internal Movement of Good may become a subject of the internal
regulations may have an impact on the free movement within the
internal market; (Case: C-321, “Pestre”);
 Good – Substance, Value, Subject of the Trade, Should cross the border
(Garbage - Case: C-2/90 Commission/Belgium, Electricity - Case: C-
393/92 “Almelo”); Payment means are not goods (Coins may seen as
good if the aim is f.e. gathering coins and not paying debts etc. Case:
C-7/78 “Thompson);
 The purpose of the free movement should not be avoiding the national
regulations(Case: C-322/01, DocMorris);
 FUNDAMENTAL FREEDOMS

 No quantity restriction including price restriction

and suspension of cross boarding (even temporarily
unjustified restriction);

 Measures should not have an equivalent effect;

 FUNDAMENTAL FREEDOMS
Case: C-120/78. “Cassis de Dijon”
• The case concerned the sale of "cassis de Dijon" (a type of creme) in Germany by
an importer and retailer (Rewe). Crème de cassis is a blackcurrant liqueur
produced in France containing 15% to 20% alcohol by volume.
• The German government had a law stipulating that products sold as fruit liqueur
should contain not less than 25% alcohol by volume. Therefore, the
Bundesmonopolverwaltung für Branntwein told Rewe that the cassis de Dijon
could not be imported into Germany and marketed as a fruit liqueur. The
importer argued that this represented a quantitative restriction on trade in
breach of treaty.
• Judgment:
 In the absence of common rules, obstacles to movement within the community
resulting from disparities between the national laws relating to the marketing of
a product must be accepted in so far as those provisions may be recognized as
being necessary in order to satisfy mandatory requirements relating in particular
to the effectiveness of fiscal supervision, the protection of public health , the
fairness of commercial transactions and the defence of the consumer .
 FUNDAMENTAL FREEDOMS

 The concept of measures having an effect

equivalent to quantitative restrictions on imports
contained is to be understood to mean that the
fixing of a minimum alcohol content for alcoholic
beverages intended for human consumption by
the legislation of a MS also falls within the
prohibition laid down in that provision where the
importation of alcoholic beverages lawfully
produced and marketed in another member state
is concerned.
 FUNDAMENTAL FREEDOMS
Case 8-74, “Dassonville”

• In Belgium there was a rule preventing the sale of products such

as scotch whisky, without a certificate of authenticity.
• The trader had purchased his whisky in France, where no such
measure existed, therefore he made his own certificate of
authenticity.
• The trader was accused of forging the certificate, and was held by
the Belgian court to be in breach of the law.

• The trader argued that this represented a quantitative restriction

on trade, which would be in breach of EC of the Treaty of Rome.
The Belgian court therefore referred the case to the ECJ as is
permitted under Article 267 of the TFEU (Preliminary ruling - at
the time 234 EC).
 FUNDAMENTAL FREEDOMS

Judgment:

• In the absence of a community system guaranteeing for consumers the authenticity of

a product's designation or origin, member states may take measures to prevent unfair
practices in this connexion, on condition that such measures are reasonable and do not
constitute a means of arbitrary discrimination or a disguised restriction on trade
between member states .
• Consequently, the requirement by a member state of a certificate of authenticity
which is less easily obtainable by importers of an authentic product which has been
put into free circulation in a regular manner in another member state than by
importers of the same product coming directly from the country of origin constitutes a
measure having an effect equivalent to a quantitative restriction as prohibited by the
treaty.
• Dassonville Formula: All trading rules enacted by MS which are capable of hindering,
directly or indirectly, actually or potentially, intra-community trade are to be
considered as measures having an effect equivalent to quantitative restrictions .
 FUNDAMENTAL FREEDOMS
Joined cases C-267/91 and C-268/91. Keck and Daniel Mithouard

 Mr. Keck and Mr Mithouard, who were being prosecuted for

reselling products in an unaltered state at prices lower than their
actual purchase price ("resale at a loss"), contrary to French Law.

 In their defence Mr Keck and Mr Mithouard contended that a

general prohibition on resale at a loss, as laid down by those
provisions, is incompatible with the Treaty and with the
principles of the free movement of persons, services, capital and
free competition within the Community.
mamuka andRulaZe
doqtori, LLM (Saarbrücken)

Judgment:
The fact that undertakings selling in different MS are subject to different legislative provisions,
some prohibiting and some permitting resale at a loss, does not constitute discrimination for the
purposes of the Treaty. The national legislation at issue in the main proceedings applies to any
sales activity carried out within the national territory, regardless of the nationality of those
engaged in it;
National legislation imposing a general prohibition on resale at a loss is not designed to regulate
trade in goods between Member States.
By contrast, contrary to what has previously been decided, the application to products from other
MS of national provisions restricting or prohibiting certain selling arrangements is not such as to
hinder directly or indirectly, actually or potentially, trade between MS within the meaning of the
Dassonville judgment, so long as those provisions apply to all relevant traders operating within
the national territory and so long as they affect in the same manner, in law and in fact, the
marketing of domestic products and of those from other Member States.
Provided that those conditions are fulfilled, the application of such rules to the sale of products
from another MS meeting the requirements laid down by that State is not by nature such as to
prevent their access to the market or to impede access any more than it impedes the access of
domestic products. Such rules therefore fall outside the scope of Article of the Treaty.
 FUNDAMENTAL FREEDOMS

 Only rules relating to product requirements (shape,

size, color, etc.) should be illegal, while those
relating to selling arrangements (opening hours,
staff training requirements, etc.) will mostly not be.

 Keck regulations would not be applied if the

measure creating obstacles for the access to the
market or ,making the access more difficult;
 FUNDAMENTAL FREEDOMS

• Beneficiaries – All persons including citizens

of third countries;
• Adressats – MS, EU bodies;
• Territory – EU and EFTA;
• Restricting Measures don’t mean automatic
violation; Restriction may justified based on
treaty– 36 TFEU or through principles defined
by the court (Casis)
 FUNDAMENTAL FREEDOMS

Article 36 TFEU

The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions

on imports, exports or goods in transit justified on grounds of public morality,
public policy or public security; the protection of health and life of humans,
animals or plants; the protection of national treasures possessing artistic, historic or
archaeological value; or the protection of industrial and commercial property.

Such prohibitions or restrictions shall not, however, constitute a means of

arbitrary discrimination or a disguised restriction on trade between Member
States.

 The list in the treaty is not exhaustive;

• Based on Nat. Fundamental Freedoms; and based on the principle of Schranken-
Schranken may be restricted the fundamental freedom;
 FUNDAMENTAL FREEDOMS

Free Movement of Workers 45 TFEU

The definition of the term “worker” comes from the

Case Law:
 Working during a specific time and getting a salary
(including teachers and professors)(Case: C-66/85,
“Lawrie-Blum”);
 The interests of the EU citizens are protected firstly;
 Secondary Law provides some protection for the
citizens of third countries;
 FUNDAMENTAL FREEDOMS

Statistic:

 1973 - 900 000 persons enjoyed with the fundamental

freedom;
 1987 - 2,35 mln from the MS and plus 2,83 mln persons
from third countries;
 2004 – only in Germany 2,1 mln registered foreign
workers lived in Germany;
 2004 – several old MS temporarily banned the citizens
from the new MS to work in their countries;
 FUNDAMENTAL FREEDOMS

Case C-415/93, Bosman Ruling

• Bosman was a player in the Belgien First Division in Belgium. He wanted to change teams
and move to Dunkerque, a French team. However, Dunkerque did not offer his Belgian club
Liege enough of a transfer fee, so Liège refused to let him go.
• In the meantime, Bosman's wages were reduced as he was no longer a first-team player. He
took his case to the ECJ in Luxemburg and sued for restraint citing FIFA’s rules regarding
football.
• Prior to the Bosman ruling, professional clubs in parts of Europe (but not, for example, in
Spain and France) were able to prevent players from joining another club even if their
contracts had expired.
• Judgment
• the court ruled that the system, as it was constituted, placed a restriction on the free
movement of workers and was prohibited by the EC Treaty. Bosman and all other EU
football players were given the right to a free transfer at the end of their contracts, with the
provision that they were transferring from a club within one EU Association to a club within
another EU Association.
 FUNDAMENTAL FREEDOMS

 Addressats – MS, EU bodies, Persons;

 Restriction 45 (3) TFEU:
 It shall entail the right, subject to limitations justified on grounds of public
policy, public security or public health;

Secondary Law:

 REGULATION (EEC) No 1612/68 OF THE COUNCIL of 15 October 1968 on

freedom of movement for workers within the Community;
 Directive 2004/38/EC of the European Parliament and of the Council of 29 April
2004 on the right of citizens of the Union and their family members to move
and reside freely within the territory of the Member States;
 Regulation (EC) No 883/2004 of the European Parliament and of the Council of
29 April 2004 on the coordination of social security systems;
 FUNDAMENTAL FREEDOMS

Right to Establishment
 Beneficiaries – Citizens of the EU; No matter
the place of residence inside the EU and
whether he/she is a citizen of a third country
simultaneously.
 However, in order to open a daughter
company or filial the residency in the EU is
necessary; (49 (2) TFEU);
 FUNDAMENTAL FREEDOMS

 Beneficiaries – Legal persons as well including companies

registered in the EU (54 TFEU)
 The Treaty defines the terms “Company” and “Firm” (54 TFEU
(2):

"Companies or firms" means companies or firms constituted

under civil or commercial law, including cooperative societies,
and other legal persons governed by public or private law, save
for those which are non-profit-making”.

 Companies registered in a third country can be a beneficiary if

one of filial is registered in the EU;
 FUNDAMENTAL FREEDOMS
Criteria's:

 Cross Boarding;
 Independent Commercial/Business Activity; Carrying own financial risk;
 Not limited in time;

 Addressats – MS, Persons;

Restriction:
Article 52 (1) TFEU
• The provisions of this Chapter and measures taken in pursuance thereof shall not prejudice the
applicability of provisions laid down by law, regulation or administrative action providing for
special treatment for foreign nationals on grounds of public policy, public security or public
health.
• Fundamental right may be restricted by the unwritten principles as well;
 FUNDAMENTAL FREEDOMS
Case C-210/06 “Cartesio”

 Cartesio was formed on 20 May 2004 as a limited partnership under Hungarian law.
Its seat was established in Baja (Hungary). Cartesio was registered in the commercial
register. Cartesio filed an application with the Regional Court for registration of the
transfer of its seat to Gallarate (Italy) and, in consequence, for amendment of the
entry regarding Cartesio’s company seat in the commercial register.

 That application was rejected on the ground that the Hungarian law in force did not
allow a company incorporated in Hungary to transfer its seat abroad while
continuing to be subject to Hungarian law as its personal law.

Judgment:
 As Community law now stands, Articles 49 TFEU and 54 TFEU are to be interpreted
as not precluding legislation of a Member State under which a company incorporated
under the law of that Member State may not transfer its seat to another Member
State whilst retaining its status as a company governed by the law of the Member
State of incorporation.
Thank you very much ! ! !