Introduction to

the Internal
Market
Lecture 1a
The internal market in context
EU Law Semesters 1 and 2

EU Law in semester 1 EU law in semester 2

Public law: Institutions, processes, law- Internal market: Substantive, practical
making outcome of law
Internal market – free movement

“Free movement of
Our focus: The
goods, persons,
market in goods
services and
and persons
capital”
Concrete goods on the shelf

Strawberries Prosecco from Headphones How did they

from Spain Italy from Germany get there?
People

Where are you able to go in Europe, and for how

long?

Do you have to pay a visa to get there?

Are you able to take up work there?

Lecture 1a Summary

Context Barriers to trade

The role of markets What is a barrier to trade?
European economic integration Overcoming a barrier to trade
Context: What role do markets play
in our lives?
Markets are how we reproduce ourselves in our present historical
moment

Historically, humans tended to make or find their Our society is capitalist

own food, clothing and housing

For themselves or in small communities We meet our needs through the market
Commodity exchange is at the centre of how society operates
Commodities and markets

Companies produce the Worker sell their labour-power And workers buy back the
commodities we need to as a commodity commodities needed to live
reproduce ourselves
 Markets and society
Societies can be more or less
market-focused
Food, housing, education, health
Free trade advocates Question of size of market
More and bigger markets are better Expanding beyond national level
Greater competition will mean better standards and
more choice
Idea of European
market

• Market activity mostly remained within

borders of a nation-state
• Internal market as part of attempt to expand
the market beyond national level
• Instead of French person working for a French
company and buying French goods
• French person working for Spanish company
and buying Dutch goods
Context of the
European Integration
Context of Post-War European Integration

Economics: Post-war unemployment and

economic difficulties

Geopolitics: Support for EU market from the

United States, against the Soviet Union
 European Defence Treaty (1950) –
Failed
Previous
Attempts at European Political Community (1952)
Integration – Failed

European Coal and Steel

Community (1950) - Success

European Economic Community

(1958) - Success
European Economic
Community Treaty
(1958)

• Established a Common
Market
• Signed by France,
Germany, Italy,
BeNeLux
The Internal Market and Barriers to
Trade
 ”Common market” at the heart of
European integration
What is the
Internal Internal market now defined in Art 26
Market? TFEU
• “An area without frontiers”
• “Free movement of goods, persons, services
and capital”

Key: removing barriers to trade

What barriers to the Free
Movement?

Woodhouse Beer
 Selling Woodhouse Beer in France

V.

Imported product Domestic product

What impedes
the Free
Movement of 1 3 2
Woodhouse
Beer? 1. France charges
Woodhouse beer for
crossing the border
2. France taxes
stouts higher than
beers
3. France restricts
number of beers
able to enter from
Charges, other countries

restrictions,
taxation
What Impedes France regulates
the Free
Movement of additives in beer
Woodhouse
Beer?
Regulations France regulates
packaging of alcohol
What Impedes Free Movement of Woodhouse Beer?
Restrictions on people/workers

What if Woodhouse beer wants to open factory in

France?
• France has a quota on the number of Irish people that may enter
• France regulates qualifications of workers in alcohol factories
• France limits access to schools for children of non-nationals
 Companies trading in Europe encounters
barriers to movement of goods and people
Barriers to at national borders
Trade
Many of these barriers exist for a good
reason (public health, environmental
protection)

EU focus: how to overcome these barriers to

trade and expand market beyond national
borders?
How to overcome barriers to Free Movement?
Positive and Negative Integration

E.g., regulation on packaging of alcohol

Negative integration
• Remove French rule on packaging of alcohol

Positive integration
• EU Regulation on Alcohol Packaging
 Create common EU standards

Positive
Integration
Importance of Art 114 TFEU in
Free Movement of Goods
Negative Integration

Prohibitions on national barriers to free movement

Enforced by the Court of Justice

 Free Movement of Goods – Fiscal Barriers

Charges Article 30 TFEU – Customs Charges

Taxation Art 110 TFEU – Discriminatory or Protectionist Taxation

Free Movement Quantitative Restrictions

of Goods -
• Art 34 TFEU

AND Measures equivalent to quantitative restrictions”(MEQRs)

Non-Fiscal • Art 34 TFEU

Barriers
 Art 45 TFEU:
Free Movement of
Free Movement
of People and
Workers
Workers
Arts 20 and 21 TFEU:
Free Movement of
People
 Commission: Free
Movement of Goods an From whose
EU “success story” perspective?
European Commission, Free Movement of Goods (the

Is Free ‘Commission guide’), SEC (2009) 673, 7

Movement
Good? Capitalists, workers,
racial minorities,
women, the
environment?
 Identifying barriers to free movement
Summary -
Introduction to
the Internal Distinction between positive and
Market negative integration

Who is it working for?

EU Law Teaching Team

• Andrew Woodhouse (Module co-ordinator,

lecturer)
• Andrea Gideon (lecturer, seminar tutor)
• Gregor Maucec (seminar tutor)
• Juan Collado Perez Llantada (seminar
tutor)
• Jaydon Souter (seminar tutor)
Lectures

Week 1-2: Introduction and Free Movement of Goods (Fiscal Restrictions) – AW

Weeks 3-4: Free Movement of Goods (Non-Fiscal Restrictions) - AW

Weeks 5-7: Free Movement of Persons (Workers) - AW

Week 8-10: Free Movement of Persons (Citizens) - AG

Week 12: Revision Lecture (online) - AW

Seminars and Drop-ins

Seminars Drop-ins
1 hour sessions
Ws 3 + 4: Introduction and Free Movement of Goods
(Fiscal Restrictions)
Ws 5 + 6: Free Movement of Goods (Non-Fiscal
Restrictions)
Ws 7 + 8: Free Movement of Persons (Workers) Weeks 4 + 8
Ws 9 + 10: Free Movement of Persons (Citizens)
Assessment
Formative assessment
MCQ tests at the end of each topic
Summative assessment: Reflective Summative assessment: coursework
essays (90%)
Semester 1: 5%: A reflective response to a past Released towards the end of Semester 2
essay question Essay question on Semester 1 material
Semester 2: 5%: A reflective response to a past Problem question on Semester 2 material
problem question
Free
Movement of
Goods (Fiscal
Restrictions)
Lecture 1b
Art 30 TFEU
 Overcoming barriers to
The internal free movement
market
Free Movement of
Goods
• Fiscal Restrictions
• Non-fiscal restrictions
Definition of “Goods”

• Goods are products which “can

be valued in money and which
are capable…of forming the
subject of commercial
transactions”
• Case 7/68 Commission v Italy (Art Treasures) EU:C:1968:51

• Includes ”waste whether

recyclable or not”
• Case C-2/90 Commission v Belgium
EU:C:1992:310
Fiscal policy

Fiscal = government revenue Governments need money to

function
Schools, infrastructure
Fiscal policy as barrier
to free movement

e.g. charges at the border

e.g. higher taxes on imported

products
Fiscal Restrictions

Art 30 Art 110

Fiscal
TFEU TFEU
Charges for Discriminatory
Government
crossing a or Protectionist
revenue
frontier Taxation
Charges = Tariffs
Customs Union

Common tariffs
No tariffs for
for external
internal borders
borders (Art 28
(Art 30 TFEU)
TFEU)
Common charge outside, no
charge inside

• Art 28 TFEU: Customs Union

• Common external tariff
• E.g. 25% tariff on kidney beans (e.g.
from USA
• Art 30 TFEU:
• No internal tariffs
• No tariff on kidney beans
Art 30 TFEU
Art 30 TFEU prohibits charges at border

V.
Customs Duties
(Tariffs)

• “Customs duties on imports

and exports” are prohibited
• Art 30 TFEU
• E.g. Italian charge for exports of
artistic and historical goods )

• Case 7/68 Commission v Italy (Art

Treasures) EU:C:1968:51
 Art 30 TFEU

Charges of • “…and charges having equivalent

Equivalent effect” are prohibited
Effect to
Customs Duties Broad definition
• “any pecuniary charge, however small and
whatever its mode of designation and mode of
application, which is imposed unilaterally on
domestic or foreign goods by reason of the fact
that they cross a frontier” Case 24/68 Commission v Italy(Statistical Levy)
EU:C:1969:29
Charges, duties, customs, taxes, tariffs

Art 30: Charge (or

Name of charge tax etc.) for
insignificant crossing the
border
 Italian charge protecting Case 7/68 Commission v
Italy(Art Treasures)
artistic goods EU:C:1968:51

General rule:
Purpose of
charge is Greek charge on tobacco (Joined Cases C-441/98 and C-

irrelevant export for benefit of

workers
442/98 Mikhailidis
EU:C:2000:479)

Belgium charge on
(Joined Cases 2/69 and 3/69
imported diamonds for Sociaal Fonds EU:C:1969:30)

benefit of diamond trade

 Escaping Art 30 TFEU #1
Charges for Specific Service

STATISTICAL LEVY – NO HEALTH INSPECTIONS BENEFIT

BENEFIT TO TRADERS PUBLIC, NOT TRADERS
CASE 24/68 COMMISSION V ITALY(STATISTICAL LEVY) EU:C:1969:29 CASE 87/75 BRESCIANI EU:C:1976:18
 Escaping Art 30 TFEU #2
Obligations of Union law

Charge for vet inspections required under Charge for inspections on poultry meat merely
Directive allowed by Directive
Permissible Not permissible
Case 18/87 Commission v Germany EU:C:1988:453 Case 314/82 Commission v Belgium EU:C:1984:118)
Escaping Art Charge is part of a general system of taxation
30 TFEU #3:
Art 110 TFEU • Case 29/87 Denkavit ECLI:EU:C:1988:199)

instead
Charge to imported good must be applied at the
same rate, same marketing stage and on the
basis of an identical chargeable event as to
domestic product
• Joined Cases C-441/98 and C-442/98 Michailidis EU:C:2000:479
When will Art Any tax applied at the border

30 TFEU apply • Case 24/68 Commission v Italy (Statistical Levy)

EU:C:1969:29
to a charge / tax
Any tax applied only to imports
/duty? • Case C-254/13 Orgacom EU:C:2014:2251

General tax where refund/rebate is offered

• Case C-72/92 Scharbatke EU:C:1993:858

When will a charge/duty/tax fall under Art 110 TFEU?

General system of taxation,

applying equally to Tax on imports even if there Partial offsetting of the tax
domestic products and is no domestic equivalent is allowed
imports
• (Case 29/87 Denkavit • (Case 193/85 Cooperative • (Case C-72/92 Scharbatke
ECLI:EU:C:1988:199) Co-Frutta ECLI:EU:C:1993:858)
ECLI:EU:C:1987:210)
Art 110 TFEU follows Art 30 TFEU

CHARGES ARE MORE TAXES MORE SUBTLE

DIRECT
Consequence of Breaching Art 30 TFEU

Art 30 TFEU
Case 26/62 van Gend en Loos EU:C:1963:1
has direct effect

Right to recover
charges actually Case 199/82 San Giorgio EU:C:1983:318
paid
 Treaty prohibition on any customs
duties and CEEs
Art 30 TFEU
Very limited scope for justification

Art 110 TFEU will apply instead

only if part of general system of
taxation
Next Week

Finish Topic 5 Start topic 6: Free Movement of

Goods (Non-Fiscal Restrictions)
Art 110 TFEU: Taxation Art 34 TFEU: Quantitative Restrictions and
”measures equivalent” (MEQRs)
Focus on market regulations