1. Treaty provisions

Free movement of goodsProhibition of Quantitative Restrictions Václav Stehlík23/3/ and 30/3/2011

1. Treaty provisions Art. 34 TFEU (ex 28 TEC) – prohibition of quantitative restrictions on imports „Quantitative restrictions on imports and all measures having equivalent effect shall be prohibited between Member States.“ Art. 35 TFEU (29 TEC) – prohibition of quantitative restrictions on exports „Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.“

Art. 36 TFEU (30 TEC) – exceptions from the prohibition Art. 37 TFEU (31 TEC) – State monopolies of a commercial character „1. Member States shall adjust any State monopolies of a commercial character so as to ensure that no discrimination regarding the conditions under which goods are procured and marketed exists between nationals of Member States. The provisions of this Article shall apply to any body through which a Member State, in law or in fact, either directly or indirectly supervises, determines or appreciably influences imports or exports between Member States. These provisions shall likewise apply to monopolies delegated by the State to others. 2. Member States shall refrain from introducing any new measure which is contrary to the principles laid down in paragraph 1 or which restricts the scope of the articles dealing with the prohibition of customs duties and quantitative restrictions between Member States. 3. If a State monopoly of a commercial character has rules which are designed to make it easier to dispose of agricultural products or obtain for them the best return, steps should be taken in applying the rules contained in this Article to ensure equivalent safeguards for the employment and standard of living of the producers concerned.

2. Quantitative restrictions and measures of equivalent effect Case 2/73 Geddo „measures which amount to a total or partial restraint of imports, exports or goods in transit“

Directive 70/50- the abolition of measures which have an effect equivalent to quantitative restrictions on imports - demonstrative list of prohibited actions in art. 3: The measures referred to must be taken to include those measures which: (a) lay down, for imported products only, minimum or maximum prices below or above which imports are prohibited, reduced or made subject to conditions liable to hinder importation; (b) lay down less favourable prices for imported products than for domestic products; (c) fix profit margins or any other price components for imported products only or fix these differently for domestic products and for imported products, to the detriment of the latter; (d) preclude any increase in the price of the imported product corresponding to the supplementary costs and charges inherent in importation; (e) fixthe prices of products solely on the basis of the cost price or the quality of domestic products at such a level as to create a hindrance to importation; (f) lower the value of an imported product, in particular by causing a reduction in its intrinsic value, or increase its costs; (g) make access of imported products to the domestic market conditional upon having an agent or representative in the territory of the importing Member State; (h) lay down conditions of payment in respect of imported products only, or subject imported products to conditions which are different from those laid down for domestic products and more difficult to satisfy;

(i) require, for imports only, the giving of guarantees or making of payments on account; (j) subject imported products only to conditions, in respect, in particular of shape, size, weight, composition, presentation, identification or putting up, or subject imported products to conditions which are different from those for domestic products and more difficult to satisfy; (k) hinder the purchase by private individuals of imported products only, or encourage, require or give preference to the purchase of domestic products only; (l) totally or partially preclude the use of national facilities or equipment in respect of imported products only, or totally or partially confine the use of such facilities or equipment to domestic products only; (m) prohibit or limit publicity in respect of imported productsonly, or totally or partially confine publicity to domestic products only; (n) prohibit, limit or require stocking in respect of imported products only ; totally or partially confine the use of stocking facilities to domestic products only, or make the stocking of imported products subject to conditions which are different from those required for domestic products and more difficult to satisfy; (o) make importation subject to the granting of reciprocity by one or more Member States; (p) prescribe that imported products are to conform, totally or partially, to rules other than those of the importing country; (q) specify time limits for imported products which are insufficient or excessive in relation to the normal course of the various transactions to which these time limits apply; (r) subject imported products to controls or, other than those inherent in the customs clearance procedure, to which domestic products are not subject or which are stricter in respect of imported products than they are in respect of domestic products, without this being necessary in order to ensure equivalent protection; (s) confine names which are not indicative of origin or source to domestic products only.

8/74 Procureur du Roi v. Dassonville Measures of an effect equivalent to quantitative restrictions : „all trading rules enacted by Member States which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade“ Note.: • The restricting effect does not have to appear

3. Discriminatory restrictions a) Import and export restrictions - import and export licences (154/85 Commission v. Italy) - phyto-sanitary inspections (4/75 Rewe) - quality inspections only on goods for export (53/76 Bouhlier)

b) promotion or favouring of domestic products Member State - engages in a campaign to promote the purchase of domestic as opposed to imported products (249/81 Commission v. Ireland) - has rules on the origin-marking of certain goods (207/83 Commission v. United Kingdom) - favours domestic companies in public procurement (45/87 Commission v. Ireland, Dundalk Water Supply) - discriminates in favour of domestic goods inadministrative practice (21/84 Commission v. France)

c) price-fixing - minimal prices (82/77 Van Tiggele) - maximum prices (181/82 Roussel)

4. National measures versus private action - 222/82 Apple and Pear Development Council – (statutory obligation on fruit growers to pay certain levies to the Council – public body) - 265/95 Commission v. France – „strikes of farmers“

5. Exceptions to the discriminatory restrictions „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.“

Note: - exceptions are applied in a strict manner - art. 36 creates a closed category of exceptions - proportionality principle applies - burden of proof rests on the Member State that uses the art. 36

Cases: - public morality (34/79 Henn and Darby, 121/85 Conegate) - public policy (231/83 Centre Leclerc) - public security (72/83 Campus Oil) - the protection of health and life of humans, animals or plants (40/82 Commission v. United Kingdom, 174/82 Sandoz, 124/81 Commission v. United Kingdom – UHT milk)

7. The relationship between harmonisation and art. 36 TFEU - exhaustive harmonisation of a certain area excludes a recourse to art. 36 (190/87 Moormann) - in case ofminimum harmonisation Member States may introduce more restrictive rules (34-36/95 De Agostini)

8. Non-discriminatory rules/ indistinctly applicable rules: Cassis de Dijon line of case-law Are non-discriminatory rules prohibited under art. 30 TFEU? - Directive 70/50 - case 8/74 Dassonville - case 120/78 Cassis de Dijon - rule of reason - mandatory requirements of public interest - mutual recognition rule - prohibition of dual burden

Subsequent case-law - 286/86 Déserbais (Edam cheese) - 261/81 Rau (margarine in cube-shaped packages)

10. Case C-267-268/91 Keck and Mithouard - case-law before Keck - case Keck - national rules relating to the goods itself – packaging, designation, form, size, composition, labelling – art. 30 applies - selling arrangements- art. 30 does not apply if the rules does not discriminate directly or indirectly - case-law after Keck – example – opening hours in shops (Saturday, Sunday, Holiday shopping)

Subsequent case-law qualifying Keck - C-368/95 Familiapress - C-34-36/95 DeAgostini - C-405/98 Gourmet

Non-discriminatory rules/ indistinctly applicable rules: exceptions - consumerprotection –178/84 Commission v. Germany (additives to beer) - publichealth - 178/84 Commission v. Germany - fairness of commercial transactions - protection of environment –302/86 Commission v. Denmark (returnable containers for drinks)

Non-discriminatory rules/ indistinctly applicable rules: exceptions - plurality of press – C-368/95 Familiapress - support of certain forms of art – 60-61/84 Cinétheque - national traditions/social policy –145/88 Torfaen

Indistinctly applicable rules versus discriminatory rules – exceptions - different origin - case law (Cassis de Dijon) x 36 TFEU - different exceptions - indistinctly applicable rules – not a closed list, boarder - discriminatory rules – a closed list - the dividing line between them maynot by always clear

Broader perspectives of Cassis • mutual recognition of rules on goods • „competition“ among legal orders – companies tend to produce in MSs with lower standards • dissatisfaction of MSs with high standards • deregulatory effect of the case-law

EU Commission focuses on the still allowed exceptions • procedure on the exchange of information between the Commission and MSs on the rules that might affect the free movement of goods • effects on the customer – labelling jungle

- overload of the ECJ - regulation versus protective nature of national legal orders - distribution of competence between MSs and EU – EU decides in more areas, cases due to expansive attitude of the ECJ - division of competence between the executive, legislative and judicial branch of EU

Questions: How do we divide restriction of free movement of goods? What are discriminatory restrictions of free movement of goods? What are non-discriminatory restrictions of free movement of goods? What are the exceptions from non-/discriminatory restrictions of free movement of goods? What is the rule of reason? When do we apply it? What were the effects of Dassonville and Cassis de Dijon case? What is the effect of Keck judgment?

Thank you for your attention

1. Treaty provisions