EU Law Articles 34 and 35 TFEU Quiz

Non-Fiscal Barriers to Trade

• This week's topic focuses on non-fiscal barriers to trade, following last week's discussion of fiscal barriers.
• Learning objectives include identifying quantitative restrictions (QRs) and measures having equivalent effect (MEQRs).
• Students will understand the difference between distinctly and indistinctly applicable measures.
• The role of mutual recognition and exceptions to free movement of goods will be explored.
• Students will understand the concept of mandatory requirements and identify selling arrangements.

Articles 34 and 35 TFEU

• Article 34 prohibits quantitative restrictions on imports and measures with equivalent effect between member states.
• Article 35 prohibits quantitative restrictions on exports and measures with equivalent effect between member states.
• These articles are central to the free movement of goods within the EU.

Two Prohibitions

• The focus is primarily on Article 34, as cases related to it are more frequent than those related to Article 35.
• Quantitative restrictions on imports/exports and measures equivalent to quantitative restrictions (MEQRs) on imports/exports are significant obstacles.

Quantitative Restrictions

• Quantitative restrictions include quotas, numerical restrictions, and restraints on imports.
• The prohibition on quantitative restrictions covers measures that restrict imports, exports, or goods in transit, either totally or partially.
• Case C-2-73, Geddo, para. 7, provides further details on quantitative restrictions.

What is a MEQR?

• A measure having equivalent effect to a quantitative restriction (MEQR) is any trading rule enacted by a member state that can hinder intra-EU trade, directly or indirectly, actually or potentially.
• The Dassonville case (C-8/74) defined "all trading rules enacted by the MS which are capable of hindering, directly or indirectly, actually or potentially, intra-EU trade".
• It's extremely broad, potentially applying to many aspects of trade.

Distinctively vs. Indistinctly Applicable Measures

• Subsequently, case law differentiated between distinctly applicable measures (DAMs), which do not apply equally to foreign and domestic goods, and indistinctly applicable measures (IAMs), which do apply equally to all goods.
• An example of a DAM is a campaign that states "buy national" (even if it is ineffective).

Examples of DAMs

• Direct overt discrimination, although uncommon in practice, are often easily identified as DAMs.
• "Buy national" campaigns, even if ineffective, are a common form of discriminatory practice, as seen in Commission v. Ireland (Buy Irish).
• Certificates of origin (if unrelated to quality) can also be DAMs, as in Commission v. Ireland (Irish souvenirs, Case 113/80).

Examples of IAMs

• A rule requiring liqueurs to contain a minimum alcohol content (e.g., Cassis de Dijon).
• Restrictions on stocking horse meat (Groenveld), as this applies to both domestic and imported goods, is an indistinctly applicable measure.
• Rules requiring a certificate of origin for imports are considered indistinctly applicable, as it applies equally to both domestic and imported goods (Dassonville).

Indistinctly Applicable Measures

• A key question is whether indistinctly applicable measures are covered by Article 34, as it's not always clearly defined.
• The Cassis de Dijon case addressed this, establishing significant principles.

Cassis de Dijon: Landmark Case

• The Cassis de Dijon case determined that national laws that hinder the marketing of goods should be accepted if necessary for legitimate mandatory requirements like fiscal supervision, public health, and consumer protection.
• This principle established the principle of mutual recognition, ensuring similar treatment of products lawfully marketed in other Community member states.

Mutual Recognition

• Obstacles created by variations in national laws for marketing products must be accepted as necessary for specified mandatory requirements.
• Article 34 does not allow unjustified discrimination, especially with regard to restrictions that exceed the necessary limitations.

Post-Cassis Jurisprudence

• The case led to numerous subsequent cases challenging various restrictions, leading to a greater degree of complexity and uncertainty in applying the relevant articles.
• The interpretation of Article 34 has been seen as going too far in some instances.
• Specific cases such as Rau highlight potential issues in cases involving selling arrangements.

Limits of the scope of Article 34 TFEU - selling arrangements

• The Torfaen case raised discussion about the scope of Article 34 regarding Sunday trading.
• The courts have adjusted their approach, particularly following criticism of previous interpretations (as seen in Keck cases).

Keck - selling arrangements

• The court used the Keck case to refine and narrow the scope of Article 34 TFEU to prohibit measures affecting the marketing of goods differently from those regulating domestic products.
• The Keck test defines the limits of how much individual member states can constrain the selling arrangements for goods.
• The Keck test establishes that selling arrangements only violate Article 34 if they treat foreign products differently in law or in fact.
• Specific selling arrangements, such as when goods can be sold, where goods can be sold, and advertising restrictions, are considered.

Result of Keck

• The Keck judgment clarified the scope of Article 34, specifically addressing product-bound measures and those relating to selling arrangements.
• The Keck test created a more precise and limited interpretation of Article 34 to avoid overly broad application.
• Some measures are still covered under Article 34 depending on whether the measure affects foreign products differently in law 'or in fact'.

Examples of Selling Arrangements

• Restrictions on when, and where goods can be sold, as well as advertisement restrictions impact different markets and products.
• Differing regulations about selling arrangements often reflect variations in domestic regulations in individual countries.

Different in Law and Fact

• The criteria for identifying when measures relate to the inherent product versus the selling arrangement can be complicated.
• Courts may consider whether the regulations impact foreign products differently in law or in fact (e.g, De Agostini or Gourmet International cases).

Product Use Rules – a third type

• Further case law has expanded the scope of Article 34 to address different product-related regulations, as opposed to only selling arrangements (e.g., concerning how a product can be used).
• Product use rules raise further questions about the extent of the scope of individual member state mandates.

Market Access

• There is some debate about whether restrictions hindering market access should be considered a violation of Article 34 (MEQRs).
• Whether such restrictions amount to overly broad interpretations of existing regulations is a point of contention.

Where is the Law Currently?

• The current legal status of non-fiscal barriers to trade is still subject to interpretation.
• Courts continue to interpret and adjust the boundaries of Article 34 and 35 TFEU.
• The effect on member states' abilities to regulate remains a complex consideration.

What ability do Member States have to regulate?

• Restrictions might be deemed permissible if justified under different circumstances (or mandatory requirements).
• Justifications include public policy, public security, public health, the protection of animals and plants, protection of cultural heritage, or commercial regulations.

What if the measure is prohibited under Art. 34?

• Prohibitions on imports are potentially justified by Article 36 (e.g., public health, safety, or public policy).
• "Mandatory requirements" developed in Cassis de Dijon cases can be used to justify otherwise problematic regulations.

Justifications for barriers to trade (Article 36 TFEU)

• Various justifications exist for trade restrictions, such as protecting national treasures or the fairness of commercial transactions.
• Trade restrictions based on these grounds may not violate EU trade law under specific conditions.

Treaty-based justifications

• Public morality, public policy, public security, and protection of persons, animals, or plants can be used to justify trade restrictions, as seen in specific case law.
• Members states are also permitted to regulate specific requirements or products in the best interest of the aforementioned factors.

Court-developed Justifications

• Mandatory requirements, like public health, consumer protection, and commercial fairness, are justified in case-law, as seen with Cassis de Dijon, or cases pertaining to German beer.
• Courts have expanded the grounds for permissible restrictions beyond the specific treaties, resulting in mandatory requirements.
• The scope of such requirements is often judged based on the 'rule of reason' analysis, whether the constraints are necessary and not disproportionate given the public interest concerns involved.

Proportionality Requirement

• Trade restrictions must not exceed what is necessary to achieve the legitimate aims for which they are imposed (e.g., safeguarding public health or other mandatory requirements).
• Methods for achieving goals through less restrictive means must be weighed against the potential harm to trade by the targeted restrictions.

IAMs and DAMs

• In principle, IAMs and DAMs are justified differently under EU law.
• DAMs may be justified based only on Article 36 TFEU, whereas IAMs might require justification using Article 36 TFEU or additional mandatory requirements.
• There may be limited distinction between the two, as case law, such as environmental protection, has been used for both measures.

Summary - flowchart

• This outlines a method for determining if a trade limitation is a QR, MEQR, or a selling arrangement.
• It addresses applying thresholds to rule-out non-applicable classifications to expedite the issue categorization step.

Summary

• Article 34/35 prohibits EU-wide import/export restrictions relating to quantitative restrictions (QRs) and measures having an equivalent effect (MEQRs).
• Article 34 is significantly more common in case law than Article 35.
• Quantitative restrictions are relatively easy to identify, while identifying MEQRs may require a more in-depth analysis leveraging case law.

Workshop

• A 'fact pattern' on Brightspace will be used for guided practice in classifying different types of measures or selling arrangements.

Questions?

• There is an anticipated opportunity for Q&A session about clarified aspects of the discussed topics.