Free Movement of Goods.CB

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Contents

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PART I...........................................................................................................1

FREE MOVEMENT OF GOODS WITHIN EU.........................................................1

INTRODUCTION...................................................................................................................1I HISTORY AND BACKGROUND OF EUROPEAN INTEGRATION.........................................................2II .THE INTERPRETATION OF THE ECJ ON THE GENERAL PROVISION OF FREE MOVEMENT OF GOODS IN THE EC TREATY..................................................................................................................3

A .The Background......................................................................................................3B. The General Provision of the Free Movement of Goods in the EC Treaty...............4C. The exeptions arising from the ECJ: Mandatory Requirements..............................11D. Non-discrimination principle and Proportionality principle....................................12

III. COMMENTS.................................................................................................................14

PART II........................................................................................................16

THE INTERNAL MARKET FOR GOODS: A CORNERSTONE OF EUROPE’S COMPETITIVENESS.......................................................................................16

I. THE INTERNAL MARKET FOR GOODS FUNCTIONS WELL….........................................................17II …BUT IT IS CHANGING FAST ….........................................................................................18III… AND THERE IS NO CAUSE FOR COMPLACENCY....................................................................19IV .TURNING TO SOLUTIONS................................................................................................20

A. Eliminating important barriers to free trade caused by national technical rules...20B. Getting products into the market: safety first!......................................................21C. Helping citizens to transfer their car to another Member State............................23

CONCLUSION....................................................................................................................23

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Part I

Free Movement of Goods within EU

Introduction

European Union, formerly called European Economic Community(EEC) or European Common Market, came into existence on March 25, 1957 at the conclusion of the Treaty of Rome or EEC Treaty or latterly called EC Treaty . The main objective of this Treaty was to promote a harmonious development of economic activities, a continuous and balanced expansion, an increase in stability, an accelerated raising of standard of living and closer relations between the states belonging to it. The principal means of achieving this objective is to establish a Common Market by allowing goods to move freely within EU States. This free movement of goods will promote efficiency in production because it will permit producers in different countries to compete directly with each other. To follow this free movement of goods notion, it is necessary to remove all internal trade barriers; physical, technical and fiscal barriers, which create discriminatory restrictions, between EU States. As a result, all EU Member States must refrain from imposing all kinds of trade restrictions on imports, exports or goods in transit between themselves.

However, although it has been nearly half century since the creation of the EC Treaty, its free movement of goods notion is still on the way of journey. It has not yet reached the star. The goods still could not enjoy true freedom to move within the European Community. There are two obstacles which impede the free movement of goods. The first obstacle is the interpretation of the European Court of Justice (the ECJ) on the general provisions concerning free movement of goods in the EC Treaty, especially on the general provisions of technical barriers under Article 28(formerly 30) and Article 29(formerly 34). The second obstacle is the exceptions to the general provisions of Articles 28(formerly 30) and 29(formerly 34) based on Article 30(formerly 36) and the mandatory requirements arising from the ECJ in the Cassis de Dijon.

In this research, Part I will touch upon the history and background of the European Integration. Part II will examine the interpretation of the ECJ on the general provisions of the free movement of goods in the EC Treaty. Part III will analyze Article 30(formerly 36) and the Cassis de Dijon case which provide the exceptions to the general provisions of Articles 28(formerly 30) and 29(formerly 34) under the EC Treaty. Finally, Part IV will be the conclusion and some comments.

I History and Background of European Integration

In 1957, the six original Member States (France, Germany, Italy, Belgium, the Netherlands and Luxembourg) agreed to sign the Treaty of Rome establishing the

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European Economic Community. After that, there were nine countries joining the Community in four times. The United Kingdom, Denmark and the Ireland joined the Community in 1973. Greece acceded to the Community in 1981. Spain and Portugal joined the Community in 1986. Austria, Finland and Sweden became members of the Community in 1995. Therefore, at present the Community numbers 15 members. The Treaty of Rome has been revised three times. The first time was in 1986 by the Single European Act with its objective to create the internal market by December 31, 1992. To reach this objective, there were some requirements of removing many conflicting domestic laws and creating European laws. Fortunately, it was succeeded.

The second time was in 1992 by the Maastricht Treaty or a Treaty on European Union(TEU) with its notion to create a New European Union. It has transformed the European Economic Community into the European Community. This can imply that the Community is now concerned not only trade but also social matters. The name of European Union(EU) has begun to appear to the international community since then. Basically, the European Union is based on three pillars. The first is the cooperation of Member States within the Community. The second is the Common Foreign and Security Policy. The third is the Common Home Affairs and Justice Policy. The third time was in 1997 by the Treaty of Amsterdam(ToA). ToA has been renumbering some old Articles, repealing some useless Articles and introducing some new Articles . Presently, one of the most interesting issue is the entry of 11 EU Member States into the third stage of Economic and Monetary Union(EMU) on January 1, 1999.

II .The Interpretation of the ECJ on the General Provision of Free Movement of Goods in the EC Treaty

A .The Background

As mentioned earlier, the objective of the European Community is to establish a Common Market which is built on a Customs Union. The first basic concept of a customs unions is the free movement of goods produced in Member States. Goods produced in one Member States should be able to move freely in all Member States without the payment of custom duties. The second is the common customs duties. If goods produced in third countries are imported into any Member States, they are subject to the payment of the common customs duties. The third is the free movement of goods from a third country. Once goods are imported into a Member State, they must be allowed to move freely in all other Member States without the payment of any further customs duties.

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Thus, the free movement of goods notion is based very much on the concept of a Customs Union. It is not the end in itself, but it is rather the means to reach the end, so called a Common Market. This free movement of goods notion goes beyond the concept of Free Trade Area because it is the creation of Common Market which establishes the common external customs tariffs and abolishes the internal customs duties and other forms of trade restrictions for goods coming from one Member State to another.

B. The General Provision of the Free Movement of Goods in the EC Treaty

The free movement of goods is the cornerstone of the European Community and appears at the heart of the EC Treaty. It is the important pillar of the internal market in which Article 14(formerly 7A) of the EC Treaty defines as:

The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty. Article 14(formerly 7A) provides the legal basis for the creation of internal market within the European Community. To create the internal market, it is required to remove internal barriers to allow goods(as well as persons, services and capital) to move freely within the Community. Barriers to free movement of goods can be divided into three categories. They are physical barriers, technical barriers and fiscal barriers. Physical barriers involve the stopping and checking system to monitor goods passing the national borders. Fiscal barriers are tariffs and other indirect taxes imposed on exports, imports, or goods in transit.

Technical barriers are quantitative restrictions or measure having a equivalent effect to quantitative restrictions which impede the free movement of goods. The common examples of technical barriers are national law and regulations for marketing goods and standard measures to protection public health and safety. Of all three barriers, technical barriers seems to be the most significant barriers because they cause the real obstacles to free movement of goods and the creation of the internal market. Thus, this research will mainly focus on technical barriers and will touch upon the others when necessary.

According to the EC Treaty, the free movement of goods provisions can be broken down into four groups.

(1). Articles 23(formerly 9) and 24(formerly 10): The rights of goods produced in a Member State and from a third country to move freely with the Community Article 23(1)(formerly 9(1)) provides: The Community shall be based upon a customs union which shall cover all trade in goods and which shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect, and the adoption of a common customs tariff in their relations with third countries. According to Article 23(1)(formerly 9(1)), the European Community shall be based upon a customs union. This union shall cover all trade in goods and shall involve the prohibition between Member States of customs duties on imports and exports and of all charges having equivalent effect. There are two important aspects arising from this Article.

(1.1). The meanings of "goods" In Art Treasures case, Commission v. Italy , the facts were that the Italian

Government prohibited the exportation of art treasures(articles of artistic, historic, archaeological or ethnographic nature) and claimed that the art treasures did not constitute "goods". The ECJ defined goods as "products which can be valued in money and which are capable, as such, of forming the subject of commercial transactions."

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Therefore, art treasures fell within the meaning of "goods" under Article 9(1)(now 23(1)). The ECJ also extended this definition in a few cases. In Region of Wallonia case, Commission v. Belgium , the facts were that Belgium prohibited the importation of waste and contended that waste did not constitute "goods" if it could not be recycled or reused because they have no commercial value. The ECJ rejected this submission and held that all waste was to be regarded as goods. In Almelo v. Energiebedriff Ijsselmij case , the ECJ made it clear that electricity constituted "goods". However, the ECJ did not come up with the conclusion that all intangibles constituted "goods".

(1.2). The application of the free movement of goods provisions The free movement of goods provisions within EC Treaty should apply to all types

of movements of goods. First and basically, they apply to movement of goods from one Member State to

be sold in another Member State. Secondly, they apply to movement of goods in transit through one Member State

to be sold in another Member State or outside the European Community. In SIOT v. Ministry of Finance case , the ECJ confirmed that the freedom of transit

within the Community constituted a general principle of Community Legislation. Thirdly, they apply to reimportation of goods which are imported from one

Member State to another, where they were produced or put on the market. Fourthly, they apply to parallel imports. Fifly, they apply to movement of goods by individuals.

In GB-Inno-BM v. Confederation du Commerce Luxembourgeois case , the ECJ confirmed that free movement of goods concerned not only traders but also individuals by holding that it requires, particularly in frontier areas, that consumers resident in one Member State may travel freely to the territory of another member State to shop under the same conditions as the local population.

In Schumacher v. Hauptzollamt Frankfurt Am Main case , the facts were that the Customs Office in German rejected the importation of personal medicines from France by Mr.Schumacher. The ECJ held that the German law was inconsistent with Article 30(now 28) because a general prohibition of individuals imports was not justified.

Finally, they apply to movement of goods involving no commercial transactions. It was confirmed by the ECJ in the waste disposal case, Commission v. Belgium. Article 24(formerly 10) of the EC Treaty recognizes the third concept of a Customs Union or the free movement of goods from a third country by providing: Products coming from a third country shall be considered to be in free circulation in a Member State if the import formalities have been complied with and any customs duties or charges having equivalent effect which are payable have been levied in that Member State, and if they have not benefited from a total or partial drawback of such duties or charges. According to Article 24(formerly 10), goods from a third country shall be freely moved within the Member States if three conditions are met. First, goods have been passed the import formalities. Secondly, goods have been paid in Import Member States any customs duties or charges having equivalent. Finally, the goods must not have benefited from a total of partial drawback of such duties or charges.

Example Company A in France imports Tuna cans from Thailand and has already paid the common customs duties in France. If Company A wants to export these tuna cans to Germany, it will have the freedom to do so without paying any other customs duties because both France and Germany are the Member States of European Union.

(2). Article 25(formerly 12): The abolition of customs duties and charges having equivalent effect .Article 25(formerly 12) of the EC Treaty deals with customs duties. It aims to abolish customs duties and charges having equivalent effect.

Article 25(formerly 12) provides:

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Member States shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect, and from increasing those which they already apply in their trade with each other. According to Article 25(formerly 12), it prohibits the introduction of new customs duties or charges having equivalent effect, and equally prohibits the increase of those which are already in existence. This prohibition applies both to imports and exports. The impact of this Article was enhanced by the ECJ in the following cases.

In Van Gend en Loos case, Van Gend en Loos v. Nederlandse Administratie der Belastingen , the ECJ held that Article 12(now 25) had direct effect (the principle that Community legislation must be applied by national courts as the law of the land) and created individual rights which national courts must protect. Therefore, individuals could invoke Article 12(now 25) before national courts.

In Sociall Fonds voor der Diamantarbeiders v. Brachfeld & Chougol Diamond Co case , the facts were that the Belgian authorities imposed a duty on diamonds to raise money for Belgian diamond workers.

The ECJ held that customs duties are prohibited independently of any consideration of the purpose for which they were introduced and the destination of the revenue obtained therefrom. Therefore, the duty came within Article 12(now 25) and was prohibited. In Re Statistical Levy case, Commission v. Italy , even though there was no definition of charges having an equivalent effect in the EC Treaty, the ECJ defined this term as "any pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic and foreign goods by reason of the fact that they cross a frontier, and which is not a customs duty in the strict sense, constitutes a charge ... even if it is not imposed for the benefit of the state, is not discriminatory or protective in effect and if the product on which the charge is imposed is not in competition with any domestic product."

However, the problematic cases concerning charges having a equivalent effect are these two following cases.

In Re: Storage Charges case, Commission v. Belgium, the facts were the Belgian authorities imposed charges on the goods undergone customs clearance in a warehouse. The ECJ held that charges for customs clearance constitutes charges having an equivalent effect if they are imposed solely in connection with the completion of customs formalities.

In Re: Animals Inspection Fees case, Commission v. Germany , the facts were that German imposed charges covering actual costs incurred in maintaining the inspection facilities. The ECJ held that the fee does not exceed the actual costs incurred as a consequence of the inspections. The inspections themselves are prescribed by European law and have the objective of promoting the free movement of goods. Hence, imposing charges genuinely incurred for such services do not amount to charges having equivalent effect to customs duties.

According to the two ECJ judgments above, charges made for services authorized by the Community legislation may not constitute charges having a equivalent effect to customs duties if they have met the following conditions.

1. The charges do not exceed the actual cost of the services. 2. The services are required by Community legislation. 3. The services promote the free movement of goods. 4. The charges must not be imposed solely in connection with the completion of

custom formalities. (3). Article 90(formerly 95): The abolition of measures of discriminatory domestic

taxation Article 90(formerly 95) provides:

No Member State shall impose, directly or indirectly, on the products of other Member States any internal taxation of any kind in excess of that imposed directly or indirectly on similar domestic products.

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Furthermore, no Member State shall impose on the products of other Member States any internal taxation of such a nature as to afford indirect protection to other products. According to Article 90(formerly 95), internal taxation may not be discriminatory imposed between domestic products and imports. This covers not only the finished products but also the raw materials or components of such products.

In Re Tax on Beer and Wine case, Commission v. United Kingdom , the facts were that the United Kingdom maintained different levels of internal taxation on wine and beer. The ECJ held that wine and beer were similar and that the differential in taxation amounted to the discrimination contrary to Article 95(now 90).

(4). Articles 28(formerly 30) and 29(formerly 34): The elimination of quantitative restrictions and measures having an equivalent effect to quantitative restrictions

Articles 28(formerly 30) and 29(formerly 34) deals with the prohibition of quantitative restrictions and measures having an equivalent effect to quantitative restrictions on imports and exports. They are the central provisions of the free movement of goods under the ECJ because they deal with the elimination of technical barriers which are the most dangerous to free movement of goods notion.

Article 28(formerly 30) provides: Quantitative restrictions on imports and all measures having equivalent effect shall, without prejudice to the following provisions, be prohibited between Member States.

Article 29(formerly 34) provides: Quantitative restrictions on exports, and all measures having equivalent effect, shall be prohibited between Member States.

According to Articles 28(formerly 30) and 29(formerly 34), they lay down the basic prohibition on quantitative restrictions on imports and exports respectively. Member States are prohibited to impose quantitative restrictions and all measures having equivalent effect on imports and exports between themselves.

(4.1). Quantitative Restrictions The ECJ has decided the meaning of quantitative restrictions in the following

cases. In Riseria Luigi eddo v. Ente Nationale Risi case , in defining the meaning of quantitative restrictions, the ECJ stated that the prohibition on quantitative restrictions covers measures which amount to a total or partial restraint of, according to the circumstances, imports, exports or goods in transit. Therefore, the concept of quantitative restrictions covers not only quotas which appears in Articles 32 and 33(now repealed by the ToA), but also the total or complete bans on imports or exports. In Import of Lamb case , Commission v. France and Import of Potatoes case , Commission v. UK, the ECJ held that the most obvious examples of quantitative restrictions on imports and exports are complete bans or quotas restricting the import or export of a given product by amount or by value.

(4.2). Measures having an equivalent effect to Quantitative Restrictions Measures having an equivalent effect to quantitative restrictions mean laws, regulations, administrative provisions, administrative practices, and all instruments issuing from a public authority including recommendation which have similar effect to quantitative restrictions. However, the ECJ has also clarified the concept of measures having equivalent effect to quantitative restrictions in the cases below.

In Procureur du Roi v. Dassonville case , the facts were that a trader imported Scotch whisky, produced in England, from France into Belgium. The Belgium laws required a certificate of origin which could only be obtained from British customs. The trader claimed that the requirement of a certificate of origin in these circumstances was equal to a measure having an effect equivalent to a quantitative restriction and therefore was prohibited by Article 30(now 28).

The ECJ defined the meaning of a measure having an effect equivalent to a quantitative restriction as all trading rules enacted by Member State which are capable of hindering directly or indirectly, actually or potentially, intra-Community trade and held that the requirement of a

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certificate of authenticity, which is less easily obtainable by importers of an authentic product than importers of a product in free circulation, constitutes a prohibited measure of equivalent effect to a quantitative restriction as prohibited by the Treaty. Therefore, Belgium laws violated Article 30(now 28).

In Re Buy Irish Campaign case, Commission v. Ireland , the facts were that Irish government sponsored advertising campaign. The ECJ held that the campaign was designed to substitute domestic products for imports, therefore, the Irish Government violated Articles 30(now 28). In Cinetheque SA v. Federation Nationale des Cinemas Francais case , the facts were that French law banned for sale of rental of videos of films during the first year in which the film was shown. This law applied equally to domestic and imported videos. The video-cassette distributors challenged the law as a violation of Article 30(now 28). The ECJ held that Article 30(now 28) of the EEC Treaty must be interpreted as meaning that it does not apply to national legislation which regulates the distribution of cinematographic works by imposing an interval between one mode of distributing such works and another by prohibiting their simultaneous exploitation in cinemas and in video-cassette form for a limited period, provided that the prohibition applies to domestically produced and imported cassettes alike and any barriers to intra-Community trade to which its implementation may give rise do not exceed what is necessary for ensuring that the exploitation in cinemas of cinematographic works of all origins retains priority over other means of distribution.

Notes: In this case, the ECJ viewed that French law fell within the scope of Article 30(now 28) but it was justified. However, the ECJ did not give the reason whether the justification was under Article 30(formerly 36) or the mandatory requirements arising from the Cassis de Dijon(see below). In Torfaen Borough Council v. B&Q PLC case , the facts were that UK trading law prohibited retail sales on Sunday. B&Q was prosecuted for violation of this law. It claimed that these laws violated Article 30(now 28). The ECJ cited Cinetheque SA v. Federation Nationale des Cinemas Francais case and held that Article 30(now 28) of the Treaty must be interpreted as meaning that the prohibition which it lays down does not apply to national rules prohibiting retailers from opening their premises on Sunday where the restrictive effects on Community trade which may result therefrom do not exceed the effects intrinsic to rules of that kind.

Notes: In this case, the ECJ also viewed that UK laws fell within the scope of Article 30(now 28) but it was justified. However, as in the Cinetheque case, the judgment was also vague in that the ECJ did not give the reason of justification. If this case had come after Keck and Mithouard case, the reason of the outcome would have been different.(see Semeraro Casa Uno Srl v. Sindaco del Commune di Erbusco case below)

In Keck and Mithouard case, the facts were that Keck & Mithouard sold French beer and coffee at retail prices lower than their own purchase price. They were prosecuted in the French courts for selling goods at a price lower than their actual purchase price(resale at a loss) which was violated French law. Keck and Mithouard claimed that the French law was contrary to Article 30(now 28). The ECJ held that:

By virtue of Article 30, quantitative restrictions and all measures having equivalent effect are prohibited between Member States. The Court has consistently held that any measure which is capable of directly or indirectly, actually or potentially, hindering intra-Community trade constitutes a measure having equivalent effect to a quantitative restriction. In view of the increasing tendency of traders to invoke Article 30(now 28) of the Treaty as a means of challenging any rules whose effect is to limit their commercial freedom even where such rules are not aimed at products from other Member States, the Court considers it necessary to re-examine and clarify its case-law on this matter.

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However, contrary to what has previously been decided, the application to products from other Member States of national provisions restricting prohibiting certain selling arrangements is not such as to hinder directly or indirectly, actually or potentially trade between Member States within the Meaning of the Dassonville judgment, provided that those provisions apply to all affected traders operating within the national territory and provided that they affect in the same manner, in law and in fact the marketing of domestic products and of those from other Member States. Accordingly, the reply to be given to the national court is that Article 30 of the EEC Treaty is to be interpreted as not applying to legislation of a Member State imposing a general prohibition on resale at a loss.

In Semeraro Casa Uno Srl v. Sindaco del Commune di Erbusco case , the facts were that Italian law prohibited all shops opened on Sundays, except in special circumstances. One shopping center challenged that Italian law violated Article 30(now 28). The ECJ held that the Italian law concerned selling arrangements and was therefore outside the scope of this Article. From Procureur du Roi v. Dassonville case to Keck and Mithouard case and Semeraro Casa Uno Srl v. Sindaco del Commune di Erbusco case, it is clear that in the past(Procureur du Roi v. Dassonville case) the ECJ defined the meaning of measure having an effect equivalent to a quantitative restriction to cover all rules which are capable of hindering directly or indirectly, actually or potentially, trade within the EU States but at present(Keck and Mithouard case) the ECJ limit Article 28(formerly 30) by drawing the distinction between measures which relate to the goods themselves such as composition, packaging and presentation and measures which relate to selling arrangements. The ECJ hold that only the measures relating to the goods fall within the scope of Article 28(formerly 30) but the measures relating to selling arrangements fall outside the scope of this Article. The ECJ also repeat this distinction in Punto Casa SpA v. Sindaco del Comune de Capena case by holding that the Italian Sunday retail closing rules fell outside the scope of Article 30(now 28) and in Tankstation case by holding that national rules governing the types of products gasoline stations could sell when opened outside the usual retail shop closing times fell outside the scope of Article 30(now 28). Nonetheless, the word "selling arrangement" is very difficult to understand and may cause some difficulties. If the selling arrangements are the rules relating to when the shops are open and close or the rules relating the length of working time, they may be easy to understand. However, if the selling arrangements are the rules relating to advertising, free offers, and the like, they may be difficult to understand because they may relate much more closely to the products.

The comments above can be illustrated by the GB-INNO-BM v. Confederation du Commerce Lusembourgeois case and the Criminal Proceedings Against Oosthoek's Uitgeversmaatschappij BV case.

In the GB-INNO-BM v. Confederation du Commerce Lusembourgeois case. , the facts were that GB-INNO-BM was a supermarket ch Notes: In the case, the ECJ also recognize that the degree of public health protection may vary from one Member State to another according to the climate conditions, the normal diet of population and its state of health.

In Oberkriesdirecktor Des Dreises v. Handelsonderneming Moorman case , the facts were that the Federal Republic of Germany maintained its legislation providing for systematic inspection of particular goods passing its border. The ECJ held that where the Community directives provide the harmonization of measures necessary to ensure the protection of animal an human health, recourse to Article 36(now 30) on the protection of health and life of humans animals or plants grounds, is no longer justified. Therefore,

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Germany legislation violated Article 30(now 28) and could not be justified by Article 36(now 30).

Notes: It is clear from this above case that the more harmonization of law within the Community, the less opportunities the Member States to justify its trade restrictions under Article 30(formerly 36).

Therefore, the harmonization of the laws will be one of the best ways to break down the technical barriers because with the harmonization of laws, the Member States could no longer justify their legislation. Article 94(formerly 100) provides the harmonization as follows: The Council shall, acting unanimously on a proposal from the Commission and after consulting the European Parliament and the Economic and Social Committee, issue directives for the approximation of such laws, regulations or administrative provisions of the Member States as directly affect the establishment or functioning of the common market.

According to Article 94(formerly 100), Council must act unanimously to issue the directives for harmonization of laws among Member States. However, Article 94(formerly 100) authorizes directives, not regulations. Therefore, they have no direct effect. They require Member States to implement into their national laws or regulations within the period of time(normally two years). (3). The restriction on the protection of national treasures possessing artistic, historic or archaeological value This ground of Article 30(formerly 36) has not been found to justify restrictions in any cases.

(4). The restriction on the protection of industrial and commercial property grounds In Deutsche Grammophon Gesellschaft mbH v. Metro-SB-Grossmarkte GmbH Co. KG case , the facts were that Deutsche Grammophon(DG) made and sold them in Germany. It exported records to France where they were marketed by Polydor, a subsidiary of DG. Metro bought records from Polydor and resold them in Germany at prices below the established price. DG claimed that the German law prohibited Metro to reimport the records to France. Metro argued that German law violated Article 30(now 28). The ECJ held that the German law prohibited on the reimportation of DG's records violated Article 30(now 28). It was not justified under Article 36(now 30) on the ground of industrial and commercial property protection.

Notes: The EC Treaty does not define the meaning of industrial and commercial property rights. Therefore, it is difficult for the ECJ to decide whether a national right should qualify on this ground. However, the ECJ may limit this ground of justification by recognizing only the industrial and commercial property rights accepted by a majority number of Member States.

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C. The exeptions arising from the ECJ: Mandatory Requirements

Besides the exceptions in Article 30(formerly 36), the ECJ has also recognized the mandatory requirements that Member States should impose on the free movement of goods such as the consumer protection, the environmental protection, the effectiveness of fiscal supervision, the fairness of commercial transactions and the public health as the exceptions to the general provisions of Articles 28(formerly 30) and 29(formerly 34). One of the most important cases for this exception is Cassis de Dijon, Rewe-Zentral AG v. Bundesmonopolverwaltung fur Branntwein . In the brief words, the facts of Cassis de Dijon were that Cassis de Dijon was a French Liqueur. The Germans prevented it from being marketed in Germany because its alcohol content was too low. The plaintiff attacked this under Article 28(formerly 30) of the EC Treaty. The Germans sought to justify their law because it was needed on three grounds. The first is the protection of public health. The second is the protection of the consumer against fraud. The third is the suppression of unfair competition.

The ECJ held that the fixing of minimum alcohol content fell within the measures having an effect equivalent to quantitative restrictions on imports contained in Article 30(now 28), therefore, it constituted an obstacle to trade. However, the ECJ has recognized the mandatory requirements as the justification of restrictions by holding:

Obstacles to movement within the Community resulting from disparities between the national laws relating to the marketing of the products in question 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 defense of the consumer.

This Cassis de Dijon case has caused many problems to the ECJ because Member States seek it to justify their restrictions, while the traders attempt to attack any national laws which restrict trade practices or commercial freedom. However, on the other hand, this case assists to clarify the principle of the free movement of goods under Articles 28(formerly 30) and 29(formerly 34) and its exception under Article 30(formerly 36) of the EC Treaty. In general, there are two principles of laws arising from this case.

The first principle is the Principle of Equivalence. The ECJ stated that: There is ...no valid reason why, provided that they have been lawfully produced

and marketed in one of the Member States, alcoholic beverages should not be introduced into any other Member State; the sale of such products may be subject to a legal prohibition on the marketing of beverages with an alcoholic content lower than the limit set by national rules.

In simple words, this principle provides that if a product meets the standards of Member State of export, that product should be regarded as meeting the standards of the Member State of import.

This principle is also confirmed in Italy v. Nespoli and Others case . The ECJ in this case held that as a general rule, if the imports are lawfully manufactured and marketed in one Member State, they are entitled to enter another Member State without obstacles of quantitative restrictions and measures having an equivalent effect.

The ECJ also stressed this principle in Wood-working machines case, Commission v. France by holding that "a Member State is not entitled to prevent the marketing of a

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product originating in another Member State which provides a level of protection of health and life of humans equivalent to that which the national rules are intended to ensure or establish".

The second principle is the Rule of Reason. The ECJ in Cassis de Dijon held that in case of no Community legislation, the exceptions of the free movement of goods principle arising from the disparities of the national legislations must be accepted if those exceptions are necessary 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 defense of the consumer. This is also confirmed in the latter case. In German Sausages case, Commission v. Germany , the facts were German law prohibited the sale of sausages containing prohibiting additives in Germany. This law applied to both German products and products from other EC Member States, even though, the additives were not prohibited by the law of origin in Member State. The ECJ held that the ban was an unlawful restriction under Article 28(formerly 30) and could not justified under the rule of reason because consumers could be adequately protected by means of proper labeling of products.

D. Non-discrimination principle and Proportionality principle

As mentioned above, the four exceptions of Article 30(formerly 36) and mandatory requirements arising from the ECJ judgments impede the free movement of goods notion within the EU. However, the ECJ has narrowly interpreted these exceptions by holding that the restriction of trade must not be discriminatory in goods originating in one Member State from those of the others. Also, it must not be discriminatory in domestic goods from the goods imported from the Member States. In Conegate Limited v. HM Customs & Excise case , the facts were that the UK law prohibited the importation of love dolls from German, but no regulation prevented their manufacture in the UK. Conegate imported love dolls from Germany to UK and the goods were seized and forfeited. Conegate argued that the UK laws violated Article 30(now 28). The ECJ held that Member States may not rely on grounds of public morality to prohibit the importation of goods from other Member States when its legislation contains no prohibition on the manufacture or marketing of the same goods on its territory. Therefore, UK law was not justified on the grounds of public morality under Article 36(now 30).

Notes: This means that the UK law preventing the importation of particular goods, while at the same time allowing nationals to manufacture such products would amount to discrimination on the ground of nationality.

In Quietlynn Ltd v. Southend Borough Council case , the ECJ held that, if there was no discriminatory effect between foreign and domestic goods, the legislation did not violate Article 30(now 28) because it did not produce discriminatory effects. Therefore, it was in consistent with Community legislation.

In Stoke-on-Trent City Council v. B&Q PLC case , the ECJ held that because there was no discrimination between imports and domestic goods, the UK Sunday trading laws did not violate Article 30(now 28).

In addition to limit these exceptions, the ECJ also holds that all measures seeking to justify the restrictions of goods should be proportionate. Proportionality means that the same result must not be achieved by means of less restrictive measures.

For example, if there is the less serious method to protect public or health than a ban of import, that method should be employed. Or, if there is sufficient labeling adequate to protect consumers, the total ban of import should not be employed.

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In UHT Milk case, Commission v. UK , the facts were that the UK law limited imports of French UHT milk by means of dealers' licenses on the ground of consumer protection. The ECJ held that the system of dealer's licenses constituted an impediment to the free movement of dairy produce which is disproportionate in relation to the objective pursued and was not therefore justified under Article 36(now 30) of the Treaty. Therefore, UK law violated Article 30(now 28).

In Re: Returnable Containers case, EC Commission v. Denmark , the facts were that Denmark enacted legislation that its National Environmental Protection Agency was only the body in charge with approving the packaging of all beer and soft drinks sold in Denmark. The Commission challenged this legislation. The ECJ held that the requirement that only containers approved by a particular body could be used to contain beer and soft drinks products was disproportionate to the purpose of these mandatory requirements. Denmark legislation therefore violated Article 30(now 28) and could not be justified under mandatory requirements.

In Italy v. Nepoli and others case , the ECJ held that the limitation on the minimum fat content of cheese could not be justified on mandatory requirements concerning consumer protection because consumers could adequately be protected by appropriate labeling of the product.

In German Beer case, Commission v. Germany , the facts were that a German law required that the word "Bier" could only be used for beer produced from malted barley, hops, yeast and water. In other Member States, beer was produced from rice and cereals with some additives. The Commission challenged that the German law violated Article 30(now 28). Germany argued consumer protection because those additives are dangerous. The ECJ held that the compulsory affixing of suitable labels giving the nature of the product sold would enable the consumer to make his choice in full knowledge of the facts and would guarantee transparency in trading and in offers to the public. Consequently, the German law prohibiting the importation of beer was contrary to the principle of proportionality and was therefore not covered by the exception provided for in Article 36(now 30) of the EEC Treaty.

III. Comments

From the all mentioned above, it is explicit that although the objective and the provisions of the EC Treaty confirm the free movement of goods notion, the freedom to move goods across border without any restrictions has still been impeded. This is because of two obstacles. The first is the interpretation of the ECJ on the general provisions of the free movement of goods. The second is the exception provisions contained in Article 30(formerly 36) of the Treaty itself and the exceptions based on mandatory requirements arising from the ECJ in Cassis de Dijon. These two obstacles hinder the true freedom to move goods across borders. The ECJ and all EU Member States are in the position to break down these obstacles.

Firstly, the ECJ must interpret the general provisions of the free movement of goods as widely as possible.

Under Article 23(formerly 9), in defining the meanings of "goods", the ECJ should define them to cover not only the commercial valued products but also the non-commercial valued products. On the same hand, the ECJ should define "goods" to cover both tangible products and intangible products such as energy etc. For the types of

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movements, the ECJ should apply the free movement of goods provisions to all types of movements i.e., traders, individuals, commercial transactions and non-commercial transactions.

Under Article 25(formerly 12), the ECJ must take care with the meaning of "charge having an equivalent effect". It must be in very exceptional circumstances according to the four criteria mentioned above that a charge may be held not to be within the scope of Article 25(formerly 12). Under Article 90(formerly 95), for the meaning of "similar" products, the ECJ should interpret it to cover "substituted products"; for example fish sauce and salt.

Under Articles 28(formerly 30) and 29(formerly 34), for the meaning of "measures having an equivalent effect to quantitative restrictions", the ECJ should still follow its interpretation in the Procureur Du Roi v. Dassonville case to cover all trading rules which are capable of hindering, directly or indirectly, actually or potentially, intra-Community trade, except only "selling arrangements", the word arising from Keck and Mithouard case. Furthermore, the ECJ should clarify the meaning of "selling arrangements" and draw the vivid distinction between measures relating to selling arrangements and measures relating to the goods.

Secondly, on the other hand, the ECJ must interpret the exception provisions under Article 30(formerly 36) as narrowly as possible. As in Bauhuis v. Netherlands case , the ECJ held that "Article 30(formerly 36) constitutes a derogation from the basic rule that all obstacles to the free movement of goods between Member States shall be eliminated and must be interpreted strictly". As early mentioned, the degrees of public morality, public policy, public security, health and life of humans, animals or plants protection and industrial and commercial property protection may vary from one Member State to another because they are for each Member State to determine in accordance with its own scale of values and the requirements of protection. However, the ECJ can limit the scope of their effects by applying the principle of non-discrimination and the principle of proportionality.

Thirdly, the ECJ must narrowly scope the meaning of mandatory requirements, the exceptions arising from Cassis de Dijon because mandatory requirements constitute a derogation from the fundamental principle of the free movement of goods. Therefore, it must be interpreted strictly, not to extend its effects further than is necessary for the protection of the public interests. Moreover, it is generally accepted that it is very hard to tell all of which constitute the mandatory requirements. For example, it is still controversial whether the protection of culture constitutes the mandatory requirements because the culture of one Member State may be totally different or even opposite from that of the others. However, the ECJ can limit its scope by applying the principle of non-discrimination and the principle of proportionality to such restrictions. These two principle must be applied hand in hand. Therefore, even though the restriction is non-discriminatory, if it is not proportionate, it must be unjustified.

Fourthly, in the cases of justification, the ECJ must specify and clarify in every judgments the ground and reason of the justification whether it is under Article 30(formerly 36) or the mandatory requirements. The ECJ should not omit the ground and reason of the justification as in the Cinetheque SA v. Federation Nationale des Cinemas Francais case.

Fifly, the burden of proof to justify the restrictions must be rested with Member State who seeks to justify their restrictions. That Member State must provide the ground for justification, the impact assessment of the restrictions and prove that the measures are non-discriminatory and proportionate.

Sixly, it is clear from the Oberkriesdirecktor Des Dreises v. Handelsonderneming Moorman case that the more harmonization of measures within the Community, the less opportunities the Member States to justify its trade restrictions under Article 30(formerly 36). Therefore, the harmonization of the legislation and directives will be one of the best ways to break down the technical barriers because with the harmonization of the legislation and directives, the Member States could no longer justify their legislation.

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Also, as early mentioned, the Council is in the power to issue the directives to harmonize the national laws. However, because the Council must act unanimously, it requires the approval of all Member States.

Finally, as mentioned above, technical barriers arising by the exceptions under EC Treaty and the judgments of the ECJ, in the forms of national regulations and standards for marketing goods and measures for the protection of public health and safety are the most significant problems to the free movement of goods. Thus, EU Member States must not exercise trade tactics by avoiding to regulate national laws or set up standards for imports, exports or goods in transit which can create the discriminatory restrictions. Thus, if all EU Member States and the ECJ jointly work through these obstacles, the impossible dream may be reality in some day.

Part II

The Internal Market for Goods: a cornerstone of Europe’s competitiveness

This Communication is presented in the context on the ongoing Review of the Single Market of the 21st Century. As such, it provides a brief analysis of one of the four freedoms – namely the free circulation of goods - and accompanies, and explains a number of concrete new initiatives designed to improve the free movement of goods.

To date, the most important technical barriers hindering the free movement of goods within the EU have either been removed or have been prevented from arising. Enterprises and citizens are generally satisfied with the way the internal market for goods currently operates.

However, the results of the public consultation on the future of the internal market reveal a number of outstanding weaknesses in the internal market for goods, which continue to have a negative effect on both businesses and consumers. For instance,stakeholders consider that national technical rules still mean that they do not really have access to free trade in the EU. That also means that consumers will not find these products ontheir national markets and that their choice will be reduced. Stakeholders also complain, for example about uncertainties and inconsistencies in existing EU requirements for the marketing of products and about shortcomings in the CE marking on products. Consumers are unsure as to the full meaning of the CE marking and some Member States are more demanding than others when applying the rules. Certificates of conformity may

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not be recognised in other countries and manufacturers may be subjected to different levels of costsfrom testing and certification bodies. Moreover, many citizens are still facing needless paperwork and extra costs for registering their car in, or transferring it to, their home country.

An integrated, borderless internal market remains the best way to enhance the competitiveness of the European economy. Given that that there is still too much bureaucracy, red tape and uncertainty involved in the trading of certain products within the EU, this Communication proposes four new initiatives to further facilitate the free movement of goods and to simplify and modernise internal market rules and principles, in accordance with the principles of Better Regulation:• A proposal for a Regulation laying down procedures on the application of nationaltechnical rules on products lawfully marketed in another Member State;• A proposal for a Regulation on accreditation and market surveillance activities;• A proposal for a Decision on a common legal framework for industrial products;• An interpretative communication on procedures for the registration of motor vehiclesoriginating in another Member State.

These four initiatives are vital elements of the re-launched strategy for Jobs and Growth. They are an integral part of the new objectives and set of initiatives which the Commission will present in the the ongoing review of the Single Market of the 21st century.

The Internal Market for Goods is a fundamental element of European Integration.What started 50 years ago as part of a customs union, involving the abolition of

customs duties inside the European Community since 1968 and the establishment of a common external tariff, became over the years one of the major building blocks of Europe’s strength and stability. Notwithstanding the huge complexity and size of the task, the Community has been able to put in place rather rapidly a legal framework that has transformed the lives of citizens and businesses for the better. The internal market for goods is not only a major catalyst of growth inside the Community but also exerts a strong influence on the capacity of the EU to compete internationally.

This communication is presented in the context of the ongoing review of the Single Market of the 21st Century, whose results will be presented in two steps during 2007: an interim report foreseen in February 2007 for the Spring European Council, to be followed up by more concrete proposals in autumn 2007. This review builds on a public consultation carried out in 2006 and will provide a global analysis of the Single Market's four freedoms. The final report will put forward a range of initiatives, which will complement what is outlined in the present Communication and its accompanying proposals.

This Communication accompanies and explains a number of new initiatives to facilitate further the free movement of goods against the background that there are still uncertainties and/or red tape involved in marketing certain products across the EU.

I. The internal market for goods functions well…

The internal market for goods has tied the European economies more closely together and trade between the Member States has expanded strongly. Intra-EU-27 trade accounts for two thirds of total trade and reveals the major importance of trade between the 27 Member States compared with trade with the rest of the world. Today it would be difficult to imagine life in the EU without products from outside one’s home country. In every store in Europe there is now a much wider choice of products of better quality. Even day-to-day products are not solely manufactured in the home country but come from all over Europe. But it is not only EU citizens who reap the benefits of the internal market for goods. Businesses can work much more efficiently by cutting compliance costs and through the economies of scale offered by the harmonisation of national technical rules.

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In the internal market for goods, almost all the promises that were made in the 1985 White Paper on the completion of the Internal Market were kept. Through the application of Articles 28 to 30 EC Treaty and through secondary EC legislation, almost all technical barriers to intra-EU trade in goods were eliminated, and in particular obstacles in the supply-chain. Most of the groundwork was done before 1992. The most important remaining barriers to intra-EU trade in goods are in the non-harmonised area or in other, equally important areas such as taxation (where the level of harmonisation is not sufficient to effectively remove all tax-driven barriers and distortions in the Single Market) and intellectual property.

Surveys show that most enterprises and citizens are satisfied with the way the internal market for goods currently operates. The results of a special edition of the Internal Market Scoreboard on “10 years of an internal market without frontiers” (2002) indicate that 76 % of companies participating in the survey and exporting to 6 or more other EU countries rated the impact of the internal market on their business as positive. Over 60 % of these companies said that the internal market had contributed to their success in selling their products in other Member States. A recent Eurobarometer shows that 3 in 4 EU citizens (75%) believe that the internal market for goods has a positive impact.

II …but it is changing fast …

Since the abolition of internal border controls as of 1st January 1993 the situation inside and outside the European Union has changed dramatically.

• The consumer enjoys the benefits of the internal market for goods: since 1993 the internal market for goods has been predicated on the elimination of alltechnical barriers in the supply chain so that the product could be sold locally tothe consumer. The product was almost exclusively offered for sale to theconsumer in his Member State of residence. Gathering information on otherproducts for sale elsewhere in the EU was difficult and time-consuming. Now, the typical supply-chain of the early ‘90s is complemented by new supply-chains.Due to growing use of the internet, the abolition of frontiers within the EU, the introduction of the Euro, falling transport costs etc., customers/consumers have a much broader choice as to where, when and how they will buy a given product. Consequently, they are increasingly buying products (such as motor vehicles) in other Member States or from a distance

• Product innovation goes very fast: New technologies are emerging that allowthe fast introduction of new products and the increased flexibility of production processes.

• Enterprises have to adapt rapidly to new challenges: Enterprises are nowfacing major challenges, some of which come from within (increasingly rapidtechnological development, skills gaps), while others are external (society’sexpectations regarding consumer, environmental and health protection). At thesame time, a new world economic system has emerged characterised by highmobility. EU businesses are confronted with the increased internationalisation of the world economy driven by improving transport links, falling communication

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costs, reduced barriers to trade and investment and more vigorous competitionwith the emergence of new global competitors.

III… and there is no cause for complacency

Despite its many successes, the Internal Market for goods is not complete. It needs to take account of the latest technological advances, the global environment and the changing demands of consumers. Improving the Internal Market is a steadily ongoing process, requiring constant effort, vigilance and updating.

The Commission launched a public consultation on the future of the Internal Market in April 2006. Its results show that, although many stakeholders are pleased with its considerable achievements, two main difficulties are perceived concerning the internal market for goods:

• National technical rules still constitute important barriers to free tradewithin the EU. The weak application and enforcement of the Treaty rules, inparticular in the non harmonised product sectors, is considered a major hurdle, in particular for SMEs. Stakeholders argue that national technical rules still lead to substantial obstacles to the free movement of goods within the EU, resulting in extra administrative controls and tests. Stakeholders consider that the current system of market surveillance needs considerable improvement, as there is no consistency of approach in Member States. In addition, Member States lack adequate resources to cope with an ever changing business environment for trade.

• Many EU rules are inconsistent or burdensome: Stakeholders complain aboutuncertainties and inconsistencies in EU rules. For example, different definitionsapply to the same product while other fundamental notions are not defined at all. Different conformity assessment procedures overlap and conformity assessment bodies are still confronted with legal obstacles. Stakeholders are therefore of the opinion that the regulatory framework for goods remains too fragmented. Stakeholders also point to the shortcomings of the CE marking, its actual meaning is often misunderstood.

In addition, new barriers for citizens are gradually emerging, for example in the motor vehicles area. The transfer of motor vehicles to another Member State is still a major source of complaints, in particular due to burdensome approval and registration procedures. Approval procedures for already used motor vehicles are often slow and expensive and sometimes lead to a prohibition to use a car that was previously lawfully used on the roads of another Member State. Registration procedures of cars originating in another Member State frequently require heavy administrative formalities.

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IV .Turning to solutions

The results of the public consultation on the future of the Internal Market are unambiguous: the quality of EU legislation on goods needs to be improved and there is a strong need to pay more attention to citizens’ needs and interests in the Internal Market for goods.

The Commission is therefore coming forward with four different initiatives,namely:• A proposal for a Regulation of the European Parliament and of the Council laying down procedures relating to the application of certain national technical rules to products lawfully marketed in another Member State and repealing Decision 3052/95/EC;• A proposal for a Regulation of the European Parliament and of the Councilsetting out the requirements for accreditation and market surveillance relating to the marketing of products;• A proposal for a Decision of the European Parliament and of the Council on acommon framework for the marketing of products;• An interpretative communication on procedures for the registration of motorvehicles originating in another Member State.

The objective of these actions is to resolve some of the main difficulties relating to the internal market for goods that emerged from the public consultation on the future of the Internal Market, by offering the following solutions:

A. Eliminating important barriers to free trade caused by national technical rules

The principle of free movement of goods is set out in the EC Treaty and is directly applicable in all Member States. The Treaty obliges Member States to accept products lawfully manufactured or marketed in another Member State which are not subject to Community harmonisation, unless the trade restriction can be specifically justified on the basis of overriding requirements in the general public interest, such as the protection of human health or the protection of the environment.

This means that certain national barriers may be justified, while others may not.In practice, however, technical obstacles to the free movement of goods

within the EU are still widespread. Technical obstacles are created by national rules that oblige enterprises to adapt products lawfully marketed in the Member State of origin to the rules of the Member State of destination.

In one survey, about 35% of enterprises reported problems with technical rules in another Member State and about 50% of enterprises decided to adapt their products to these rules3.

Several factors explain why these obstacles still exist. Many enterprises lack the expertise, time, adequate human resources and money to assert their rights in the Member State where they intend to sell their products. There is also a widespread lack of awareness of enterprises and national authorities about the principle of free movement of goods. They often face legal uncertainty about the burden of proof in case of discussion.

Moreover, enterprises run a risk when they decide to market a product in another Member State. It is difficult for businesses to find out beforehand if they can sell their products lawfully in another Member State. Although the Court of Justice confirmed the principle that Member States are obliged to compensate individuals for loss and damage caused by breaches of directly applicable Community law for which they can be held responsible, this uncertainty leads in practice to risk avoidance: enterprises will “play it

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safe” by avoiding any possible conflict or discussion with the national authorities of the Member State of destination.

The principle of free movement of goods is enshrined in the Treaty and has been the subject of numerous rulings of the Court of Justice. Efforts to make it fully operational must be strengthened so that products lawfully marketed in one Member State can easily be marketed elsewhere in the EU.

The proposal for a Regulation laying down procedures relating to the application of certain national technical rules on products lawfully marketed in another Member State and repealing Decision 3052/95/EC therefore ensures that enterprises can rely on this Treaty principle and that national administrations have the tools to implement it.

The philosophy of the proposal is transparency and efficiency: transparency of information to be exchanged between enterprises and national authorities, efficiency by avoiding any duplication of checks and testing, whilst allowing Member States to maintain a high level of protection of their consumers and the environment.

In particular, the proposal addresses the burden of proof by setting out the procedural requirements for denying the market access of a product. The proposal establishes that the Member State of destination must justify in writing the precise technical or scientific reason for its intention to refuse the access of the product to the national market. The economic operator will also be entitled to defend his case and to submit solid arguments to the competent authorities.

B. Getting products into the market: safety first!

The gradual development of the internal market for goods has created a patchwork of different rules and procedures. Some of them are very burdensome for enterprises and supervisory authorities and cause unnecessarily high administrative costs and legal inconsistencies for application. Although originally designed to increase health and safety, technical regulations can also become instruments for market protectionism.

Firstly, the rules on the conformity assessment of products must be made much less complicated for enterprises and authorities. As it stands, some products must undergo different procedures to meet the requirements of several different directives. In many areas, enterprises have to ensure compliance not only with one piece of legislation, but with a variety of legal instruments. Due to different wording and concepts it getsmore and more difficult for enterprises to understand their legal obligations. They are forced to have increased recourse to legal expertise in order to implement the law properly. In some cases manufacturers are even forced to go to different testing bodies to have the same product certified under different directives.

Moreover, an independent and authoritative attestation of the competence, impartiality and integrity of conformity assessment bodies has become necessary.

Secondly, market surveillance activities are crucial to protect the consumers from unsafe or non-compliant products. The safety of the European market place depends to a great extent on the active and uniform enforcement of Community product safety requirements. However, national authorities lack the necessary means to apply market surveillance efficiently and consistently. They are constantly confronted with new challenges, for example fast changing economies, new products on the market and increasing number of third country imports. In addition, the increased internationalisation and complexity of commercial transactions make it more and more difficult to identify the actors in the distribution chain and authorities are often unable to find the right person to address when there is a problem.

The way in which market surveillance is currently organised in Europe is no longer adequate for an internal market without internal borders. Products circulate freely inside the Community without passing any internal checkpoints, but the powers of national authorities are limited to their own territory.

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The consequence is that unsafe products slip through the net and are placed on the market. These products often constitute a health and financial risk for the consumer. This situation also creates an unfair competitive advantage for operators not playing to the rules, especially in price-sensitive areas. By not observing material or procedural requirements, they can make important savings on the compliance costs and consequently offer their products to lower prices than their competitors who respect the law.

Therefore, market surveillance activities need to be coordinated and strengthened throughout the internal market without frontiers, where often concerted, Europe-wide action is needed.

Thirdly, the CE marking needs much better protection. In theory, the role of the CE marking is simple: it shows to enforcement authorities and to consumers that the manufacturer declares that he has applied all applicable EC directives. A product that carries the CE marking, therefore, benefits from free circulation inside the Community.

Furthermore, many traders inside and outside the EU do not always understand the meaning of the CE marking, and a number of products bearing the CE marking do not comply with the legislation. These products normally do not offer the same level of safety as compliant products and therefore constitute a major risk for consumers.

Moreover, non-compliant products could be produced at lower cost. This situation therefore creates an unfair competitive advantage for operators not playing to the rules.

The proposal for a Decision on a common framework for the marketing of products will streamline the various conformity assessment procedures for products in order to avoid overlaps and to cut down burdensome procedures. It will also present harmonised provisions for future legislation.

In parallel with this proposal, the Commission will ensure the legal protection of the CE marking by its registration as a collective mark. This new protection will allow public authorities to take rapid and efficient action against abuses. It will also protect businesses that respect the rules against rogue traders who put the CE marking on a product that does not offer the high level of protection that is required in Europe.

The proposal for a Regulation setting out the requirements for accreditation and market surveillance relating to the marketing of products will facilitate conformity assessment through accreditation of laboratories and testing houses, so that their certificates and test reports will be readily accepted throughout the EU.

The safety of the consumer remains at the forefront. The proposal for a Regulation setting out the requirements for accreditation and market surveillance relating to the marketing of products will therefore also strengthen market surveillance activities throughout the EU, so that non-compliant products can be easily identified and withdrawn from the market.

C. Helping citizens to transfer their car to another Member State

The Commission promised in the Citizens’ Agenda to lift specific barriers for citizens. Barriers often arise when citizens purchase motor vehicles in another Member States. While several measures (for example the EC whole vehicle type approval (WVTA) system and the new block exemption regulation on the application of the competition rules to motor vehicle sales and servicing) made the cross-border purchase of motor vehicles significantly easier, many citizens are still facing needless paperwork and extra costs for registering their car in, or transferring it to, their country of residence. The many practical problems caused by bureaucratic registration formalities still constitute an impediment for citizens to purchase their car abroad.

It is likely that most of these problems will disappear in the long term, when all cars will have the harmonised registration certificate.

The Commission has therefore opted for the publication of an interpretative

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communication on procedures for the registration of motor vehicles originating in another Member State. The communication gives a comprehensive overview of the principles of EC law that apply to the registration of vehicles in a Member State other than the State of purchase, and to the transfer of registration between Member States, in the light of recent developments in European legislation and in the caselaw of the Court of Justice.

The communication will serve as a basis for a Citizen’s guide on the transfer of vehicles within the EU.

Conclusion

One of the main priorities of the European Commission is to make the Internal Market for goods work better for enterprises and citizens. The fundamental requirements are not so different to what they were in 1985 when the Commission published its White Paper on the Completion of the Internal Market and in 1993 with the introduction of a single European market. Now, as then, an integrated borderless market is the best way to enhance the competitiveness of the European economy. A better functioning Internal Market for goods is thus a critical element of the relaunched strategy for Jobs and Growth to enable the EU to compete and succeed in a globalised economy, in which our main trading partners have large and unified markets. These four initiatives are an important step in this direction. They are an essential part of the new Single Market Strategy for the 21st century.

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