EU Common Market

EU Common Market
Freedom of movement of goods (most developed and most court decisions)
Freedom of movement of persons
Freedom of movement of services
Freedom of movement of capital
Freedom of establishment

EU Common Market
Meaning of “Freedom”
A principle of EU internal market
A subjective right of EU citizens and firms
A complex of rights and obligations, connected with such “freedom”
Rule for freedoms – “All EU principles applicable”

EU Common Market - movement of goods
Goods – all products rightfully produced within the EU, as well as all third country products imported with all formalities completed and custom duties paid)
The “movement of goods” is applied also to possible barriers within each EU country

EU Common Market - movement of goods
“Community should be based on custom
union, which should include prohibition of all
custom duties and all charges having similar
effect, as well as introduction of common
custom tariff with respect to third countries”
This prohibits quotation and any
discriminative taxation.

EU Common Market - movement of goods
“Effect test”
Procureur de Roi v. Dassonville.

EU Common Market - movement of goods
Belgium had no right to stop the Scotch whiskey import from France, on the grounds of non-availability of a certificate of origin from a Scottish producer.
Reason – whiskey was already rightfully imported into the EU.

EU Common Market - movement of goods
Dassonville results:
Any rules which can directly or indirectly hinder the intergovernmental trade (actually or potentially) should be banned
Consumer protection trade rules should be “reasonable”, “should not create a trade obstacle” and “should be available to all EU citizens”

EU Common Market - movement of goods
Any charges regardless of size, aim, collection
Imposed single-handedly on EU or EU-imported goods
Fact of crossing the border
Non-custom duties

EU Common Market - movement of goods
Allowed, if:
Charge is part of national tax system;
Charge is the compensation for services, provided to importer;
Charge compensates the cost of legal inspection.

EU Common Market - movement of goods
What about the rules which apply to both national and non-national producers?
Cassis de Dijon

EU Common Market - movement of goods
Real case name - Rewe-Zentral AGRewe-Zentral AG v Bundesmonopolverwaltung für Branntwein
German legislation had imposed several provisions concerning the minimum alcohol content for beverages – 25%.
Importer had 20%. Can’t advertise.

EU Common Market - movement of goods
Court statement – “Not reasonable”
“If there is no EU rule on a certain matter, states can make such rules by themselves, aimed at fiscal control, public health, honesty and consumer protection, as long as they are reasonable and proportionate”.

EU Common Market - movement of goods
Cassis results:
Reason test
Proportionality
Mutual recognition rule (if produced in one, can be sold in another)

EU Common Market - movement of goods
Lots of discrimination cases:
“Comission v. Italy” – difficult registration
“Rewe” – plant sanitation inspection
“Bouhelier” – export “quality” control
“Commission v Germany”
(“Beer Purity” law)….

EU Common Market - movement of goods
Quotas and such – any full or partial quantitive limitation of legal and administration nature, whether in money or pcs
2/73, Geddo v. Ente Nazionale Risi

EU Common Market - movement of goods
Limitations to movement of goods
Public morale
Public order/security
Health protection
National heritage protection
Commercial or industrial property protection

EU Common Market - movement of goods
Public Morale
The court approved the prohibition of pornographic materials import from Netherlands to UK, because such products could not be made in UK.
The court cancelled the prohibition of rubber dolls import (based on same legislation) from Germany, because such production was legal within UK.

EU Common Market - movement of goods
Health protection
“Special beer recipe” for sales in Germany was prohibited, as well as special pasta recipe for sales in Italy
However, the requirement for food producers to print out potential risk informaiton about artificial additives on food packages was held legal

EU Common Market - movement of goods
Public security
Campus Oil v Minister for Industry and Energy.
Essence: All petroleum importers had to buy 35% of their import from a state oil refinery.
Court approved with remarks.

EU Common Market - movement of goods
Public order
Very wide range of different cases.
Court finally stated, that only dangers to fundamental public interests can be defended by this concept, and not some specific areas, for example, consumer rights protection.
A state should first try all other instruments.

EU Common Market - movement of persons
Parts of freedom
Residence movement
Workers and their families
Non-EU Workers and their families
Shengen agreements

EU Common Market - movement of persons
“Absence of all discrimination on the grounds of citizenship of member-states workers concerning hire, reimburcement and other terms of work and hiring”
A “worker” is any EU citizen carrying out a work for hire in another member state.
This includes part-time, below-min-wage workers, anyone performing “a real and effective activity”
Only EU law can interpret what a “worker” is.
Students and entrepreneurs are not workers.

EU Common Market - movement of persons
Most important features:
A worker can accept any job offer in any member state.
After retiring from it, a worker can stay and look for work on the same ground with the host country citizens
The same goes for their family members
All issues concerning medical and social care, wage level should be the same as
An arriving worker can also receive the pension in the host state

EU Common Market - movement of persons
Limitations to movement of persons
Public order/security
Public service
Health protection

EU Common Market - movement of persons
Public order/security
Van Duyn v Home office
Essence: The British government denied Yvonne Van Duyn an entry permit because she was affiliated with the Scientology religion, which the government had believed to be socially harmful.

EU Common Market - movement of persons
Van Duyn results:
Participation in a certain organization can be a ground for movement of persons limitation
It’s the views of the destination state on issue that matter
Absolute equality between host and visiting persons is not achievable

EU Common Market - movement of persons
Public service
The movement of persons freedom is not applicable to public service positions
Public service – “a number of posts, which are connected with authority execution in accordance with public law and a duty to protect national interests”
Police, military, public officers, having real authority (not just financed by state budget)

EU Common Market – freedom of establishment
“Freedom of movement of persons” for legal entities
Entrepreneur movement
Legal entity establishment freedom

EU Common Market – freedom of establishment
An entrepreneur will have no restrictions for setting up and management of companies, branches, agencies and associated firms
For the purposes of this freedom, a legal entity will be equated to a person.
Non-commercial organizations limitation

EU Common Market – freedom of establishment
Limitations
Official duties execution (each state decides)
Public order
Public security
Health protection

EU Common Market - movement of services
All payable activities not falling under the regulations of goods, persons and capital movement shall be considered to be “services”
Two types:
Services provided at the producer turf
Services provided at the consumer turf

EU Common Market - movement of services
All restrictions, access limitations and discrimination aimed at service provision at the territory of another member-state, should be removed.
No need to comply with all the national rules regulating the provision of similar services by host citizens.
Capital and transport are not regulated by this freedom. Most services require a separate “liberalization” regulation by the EU.
Official duties limitation.

EU Common Market - movement of capital
Freedom
Capital Current payments

EU Common Market - movement of capital
Capital freedom:
Finance operations connected with investment
Other member-state investment itself
Non-return of invested funds to deriving country for a reasonable period
Luisi and Carbone v Ministero del Tesoro

EU Common Market - movement of capital
Current payments freedom:
Simple transfer of foreign currency between two states
Such transfer should be a payment for a service
The member-state currency should used (either creditor or beneficiary)

EU Common Market - movement of capital
Limitations:
Taxation law usage
National law infringement prevention
Administrative and statistics information gathering procedures
Public policy and security provisions
Most regulations – in national law (FDI, Financial services, Securities governance)

EU Common Market – Consumer right protection
Approach difference
Rights protected:
Health and security
Economic interests
Loss reimbursement
Information and training
Representation