The Treaty on the Functioning of the European Union - Essay Example

Running head: LAW 5th July Introduction Based on the high demand for products especially in theregions such as Europe and Africa where population is increasing at a faster rate, countries are embarking on forming treaties and trading blocks with other nations. In this way, the countries are able to easily import goods and services from other countries thus meeting the high demand from their citizens. In order to ensure that European countries effectively undertake trade among themselves, the countries have adopted treaties such as Treaties of the European Union which entails international treaties between European states. Key functional treaties that European Member States have entered into include the treaty on European Union and the Treaty on the functioning of the European Union (TFEU). TFEU which indicates the functioning of European Union also provides deep details on the policies, operations as well as the roles of EU. In order to make it clear and easy to understand among the member states, the Court of Justice has split the Treaty on the functioning of the European Union into seven parts. These includes principles, non-discrimination and citizenship of the union, internal actions and EU policies, association of the overseas territories, external actions by the EU, institutional and financial provisions and general and final provisions (Josselin and Marciano, 2006). Under the seven parts, the court has established Titles and Chapters that covers various issues as indicated by the Articles. For example, Article 30 TFEU is within Chapter 1 that deal with the Customs Union While Article 110 TFEU that covers on tax provision is in chapter 2 of part three. According to Article 30 TFEU, member states shall not be entitled to customs duties on exports or imports or any other charges with a similar impact. On its part, Article 110 TFEU indicates that no member state will be in a position to impose any internal taxation directly on indirectly on the products of member states (Craig and Gráinne, 2011). This paper aims at critically discussing the extent to which the Court of Justice has taken appropriately nuanced approach to both Article 30 TFEU and Article 110 TFEU which strikes the right balance and free movement of goods while at the same time respecting the autonomy of member states. As the major party in ensuring that all the provisions of TFEU are effectively implemented, Court of Justice has continued to adopt the principle of equality in order to achieve unified market and free movement of goods (Alec, 2010). Having being established in 1952 under the ECSC treaty, the Court also plays a major role of application and interpretation of the treaties including the chapters covered by the treaties. The court is also mandated to ensure that the legislations are adopted in the same way in all the Member States. Additionally, the Court is responsible for ensuring that the national courts do not give rulings that are different on a similar issue (Sharpston, 2011). As a way of ensuring that there is equality in the Court, all the Member States are represented by a single judge each. Free movement of goods within the EU Member States is one of the important issues that has rendered to the improvement of economy, social and political sectors within the European region as argued by Knill and Liefferink (2012). Since 1993, the European countries have not experienced control in the movement of goods making European Union a single territory that is not influenced by internal frontiers (Peterson, 2008). One of the benefits of the elimination of the customs tariff as indicated by Article 110 TFEU and Article 30 TFEU is that it has promoted intra-community trade. As a result, the imports and exports of the member states has significantly increased leading to expansion of businesses within the region due to the availability of ready customers. Laursen (1997) indicates that as a customs union, the European Union has adopted the strategy of common customs policies towards other states Other advantages of internal market includes increased competition that lead to innovation, increase in the level of specialization among the Member States, expansive economies of scale and free movement of factors of production. As indicated by Article 30 TFEU and emphasized by the Court of Justice, Member States are barred from duties on products crossing their borders including those produced in other countries as well as those produced within European Union (Council of the European Union, 2009). This means that if a product is imported from third parties, the necessary duties are imposed but once it get to EU, Article 29 indicates that such goods are then considered to be free during circulation within the members of European Union (European Research Council, 2007). Another aspect that is prohibited by Article 30 TFEU as earlier mentioned relates to charges that have similar effects to those of customs duties. According to Court of Justice during the case of Commission versus Italy, a charge having equivalent effects to that of customs duties is the one that has a proportionate amount to the value of the goods (Commission v Italy (e Statistical Levy) (Case 24/68) [1969] ECR 193, [1971] CMLR 611). However, during the case 18/87 that involved Commission v. Germany, there are cases when a charge is not considered as having the same effects to that of customs duty. These include first, if it is related to dues that are applied internally and systematically using similar criteria like that of imported or domestic products. Secondly, based on particular conditions it is related to the inspections that are undertaken to accomplish certain obligations as stipulated by the law (Muñoz, 2007). The third exemption that makes a charge not to be treated as a customs duty or having similar effects like customs duty is if it entails payment for a service provided to the economic operator. As indicated earlier, Article 110 TFEU covers on the aspect of taxation of EU Member States. The article prohibits imposition of taxes among the countries in excess of the tax that is imposed on domestic products that are alike (Chowdhury, 2006). Having being changed from Article 90 EC to the current Article 30 TFEU, the Court ensures compliance in order to ensure that under normal competitive situation, there is free movement of goods among the countries (Gunnar, 2013). During the case of taxation of rum, the Court held that by avoiding protection which might result to discriminatory taxation, Article 30 TFEU guarantees total neutrality of internal taxation an aspect that leads to free movement of goods within the Member States while at the same time ensuring autonomy of the countries (Gerard, 2012). It is worth to note that despite the close and free movement of goods within EU, the Member States do not interfere with the political issues of other countries without being asked for support. This implies that the states are independent to take any political move that is beneficial to its citizens without jeopardizing the free movement of goods. European Communities v Italian Republic - Case 24-68 During its judicial process, the Court of Justice has been involved in various cases that touch on the provisions of Article 30 TFEU as well as Article 110 TFEU. One of the notable cases that the Court of Justice dealt with was European Communities v Italian Republic. - Case 24-68. The European Communities was represented by Sandro Gaudenzi, and Italian government by Adolfo Maresca. The subject of the case was based on the failure to fulfill its obligation by introducing a statistical levy contrary to the European Union regulations. According to the European Communities, Italian government established the levy that entailed charging the goods that were exported to other Member States. By implementing the duty, the Italian government was going against Article 30 TFEU which prohibits any duty that has similar effects to that of customs duty. On its part, during the case of Commission v Italy (e Statistical Levy) (Case 24/68) [1969] ECR 193, [1971] CMLR 611, the defendant argued that the commission was wrong in dividing the statistical levy into two different parts which included the one relating to exports and another one relating to imports. The Italian authority also argued that the levy could have been wholly analyzed and its legal nature determined and not breaking it down. Additionally, the defendant argued that the statistical levy was not like customs duty and it did not produce effects similar to those of the customs duty (Alec, 2004). Another argument by the Italian government maintained that the levy was a payment of a service rendered, thus it could not be treated as to produce similar effects. However, the Court of Justice came to a conclusion that Italian government violated the EU laws and has failed in its submissions thus the Court ordered the defendant to pay the cost. European Communities v French Republic (spirit case) The case of European Communities v French Republic entailed tax arrangements that EU laws applied on spirits. French Republic, the defendant was taken to the Court by the commission for introducing discriminatory tax system on spirits (Mikaela, 2010). In this way, the defendant failed to comply with Article 110 TFEU as indicated by the European Union. During the case, the European Community was represented by Jean-Claude Seche, its legal advisor while the French Republic was represented by Noel Museux. The applicant argued that by imposing taxes that were discriminatory in nature, the defendant was violating Article 110 TFEU which prohibits Member States from imposing an internal taxation on Member states (European Commission, 2010). During the case, the applicant referred to German and Italian earlier cases that involved the similar violation. While the commission admitted that it is possible to distinguish various categories of spirits based on their raw materials and characteristics, it would have been dangerous for Member States to emulate tax classification system such as the one put in place by French (Jordan and Adelle, 2012). In their defense, the French government indicated that the category of taxation that was emulated by the European Commission was not inline with both the French tax practice and French legislation. It is vital to note that according to EU, for Member States to breach Article 110 TFEU, the products must be similar (Commission v France (French Taxation of Spirits) (Case 168/78) [1980] ECR 347, [1981] 2 CMLR 631). Based on the incompatibility of the French tax system with the laid down provision as stipulated by Article 110(2) TFEU, the Court indicated that the defendant failed in its submissions. Thus, the French Republic was ordered to pay the costs. European Communities v Kingdom of Belgium The case of European Communities v kingdom of Belgium was brought in the court when the applicant was concerned with defendant levying storage charges on the goods or products that emanated from the Member States (Barnard, 1986). The goods were imported in Belgium and thus they were unable to follow the rule of the law thus failing to meet their obligation as indicated by Article 30 TFEU. According to Craig (1990 ) the applicants who were represented by Michel Van Ackere, filed the case that Belgium was imposing payments on customs warehouses where goods were deposited and no payment for entry duties or any tax for period in which the goods were stored or circulating. The defendants, kingdom of Belgium represented by Robert Hoebaer the director of foreign affairs, argued that what they imposed tax on was the services rendered to the importer and not the public warehouses used for storage of goods (Stead and Robert, 2007). Belgium government considered that the charges that were put into question were not under the goods in circulation rather the European communities were paying for services rendered to the importer and thus it was capable of justifying the levying of the charges. Belgium argument was dismissed by the court under the article 69 (2) of the rules of procedure Commission v Belgium (Customs Warehouse) (Case 132/82) [1983] ECR 1649). The court indicated that Belgium had failed to fulfill its obligation as outlined by the European Union regulations. Thus, the applicant was ordered to pay the cost. Commission v France (Levy on Reprographic Machines) During the case of European commission v France, the commission was presented by Manfred Beschel while French Republic was represented by Noel Museux. Just like in the case where French introduced discriminatory tax systems, the applicant argued that the defendant failed in meeting his obligation by charging levies on the importation of reprographic equipment. According to French Republic, the extra charges that it imposed on the reprographic materials did not have effects like those of customs duty (Commission v France (Levy on Reprographic Machines) (Case 90/79) [1981] ECR 283, [1981] 3 CMLR 1). According to the results of investigation that was undertaken after the request of the court, it was revealed that the various kinds of reprographic machines produced domestically by French amounted to small percentage of the value of the total value of the products (Gow, 2007). The Court indicated that the applicant was not in a position to prove that the defendant failed to meet his obligation as indicated by Article 30 TFEU. Based on the Court of Justice regulation that unsuccessful party should pay the cost, the commission which was the applicant was ordered to pay the costs. The Court also termed the application as unfounded. Conclusion Based on the above discussion, it is clear that the role of Court of Justice in ensuring that Article 30 TFEU as well as Article 110 TFEU cannot be overlooked. While, Article 30 TFEU deals with customs union, Article 110 TFEU covers on tax provision. After its formation, European Union was exposed to cases that were expected based on the different tax systems that each of the Member States adopted (Simon, 2005). Having being founded in 1952, the Court of Justice is a major party that has ensured European Community remains strong. In addition to making sure that laws are adhered to by all the Member States, the Court ensures that national courts do not make different decisions on issues that are similar. Some of the major advantages of being a member of European Union are that it leads to expansion of businesses as the result of ready market, competition that makes organization to adopt innovation, specialization, free movement of factors of production and economies of scale (European Commission, 2010). The Court of Justice, which is located at Luxembourg, is also responsible for interpreting the law and ensuring that the applicants and the defendants are treated in a fair way and justice is achieved. Through the application of justice and as per the requirements of Article 30 TFEU and Article 110 TFEU, the Court has ruled over various cases. Some of the notable ones include European Communities v Italian Republic - Case 24-68, European Communities v French Republic (spirit case), European Communities v Kingdom of Belgium and Commission v France (Levy on Reprographic Machines) among others. In order for the developing countries especially in the African and Asia regions to attain a sustainable economic development, there is a need to form free movement of goods treaties just like the TFEU (Wilkinson, 2009). However, appropriate legislations and court systems should be put in place to solve cases among the member states that are likely to be engaged in many conflicts based on differences in tax and economic systems. References Alec, S.2004. The Judicial Construction of Europe .Oxford: Oxford University Press. Alec S.2010. 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