The Free Movement of Goods in the European Union - Coursework Example

Name of the Student] [Name of the Professor] [Name of the Course] [Date] The Free Movement of Goods in the European Union The free movement of goods is one of the cardinal principles on which the Single market is based. The Member States are precluded from preventing the free movement of goods, until and unless a grave risk is involved in doing so, for instance if such goods pose a threat to consumer protection, the environment of public health1. Such risks differ from one product sector to another. The EU enacted harmonizing legislation, in order to mitigate such risks and to ensure certainty from the legal point of view. Such legislation had in general been restricted to the high risk sectors2. From its humble beginnings as the European Coal and Steel Community of 1951 and the 1957 Treaty of Rome, the European Union has emerged as a major economic power in the world3. Its present legal framework was established by the Maastricht Treaty of 19934. In order to promote trade and engender a single European entity, the Single market was promoted in 1993, against seemingly surmountable odds5. There was a certain amount of laxity in implementing similar legislation for the low risk sectors. This so called non – harmonized sector is governed by the principle of mutual recognition, which requires the free movement in the EU, of goods manufactured legally in any Member State. Fifty percent of the goods traded in the EU are subject to the harmonized regulations, whereas the rest of the goods come under the ambit of the non – harmonized sector6. The principal reason behind the formation of the single market was to convert the EU into one single economic region, so that the citizens of the individual Member States could freely exchange goods, services and money. The objective to be achieved, by this strategy was to enhance quality, while reducing prices7. The following cases reveal the objective of community law in promoting the free movement of goods, in the EU. In SIOT v. Ministry of Finance, the ECJ held that the free movement within the EU was guaranteed by the community law8. In Schumacher, the German Customs had prevented the import of medicines for personal use from France. The ECJ held that such a blanket ban on personal imports was unjustified9. The goal of the single market is to ensure the availability of high quality goods, while preserving the uniqueness of authentic local and specialized goods. In one instance, Italy made a referral to the ECJ regarding the use of the brand name Tokai. There had been an agreement with Hungary, whereby this name would have been used, solely by the wine producers of that country, subsequent to the year 200710. Since, Hungary had become a Member State on the 1st of May 2004; Italy contended that there should be no such restriction on the use of the brand name Tokai. The ECJ held that the term Tokai referred to a specific quality of wine from a particular geographic location, therefore, only Hungary would be allowed to use that name11. In Cassis de Dijon, the ECJ held that the free movement of goods could be restricted if such it was detrimental to public health and other interests of the community12. France Monster Bang an Irish fireworks manufacturer encountered a number of difficulties while attempting to sell its products in some of the Member States of the EU. The French authorities had commenced proceedings to prosecute Monster Bang, because it had not complied with a French legislative requirement, whereby all advertising, catch phrases and slogans related to the product had to be in French. The offending part of their product was the slogan Monster Bangs are Best, which had not been printed in the French equivalent. As such, Monster Bang would have been compelled to incur very heavy expenditure, if it were to print its slogan in French. Annexure I of the Pyrotechnic Directive deals with the essential safety requirements of pyrotechnic articles. Part 3(h) of this annexure I states that pyrotechnic goods have to display the necessary directions and the required instructions regarding secure handling, storage, utilization and removal. Such instructions have to perforce be in the official language of the Member State that is to import these incendiary materials. Moreover, Part 3(i) requires the comprehensive testing, under reasonable conditions, of the capacity of such material to successfully endure wear and tear due to standard and predictable conditions of storage13. At one point of time, the French authorities were very much insistent on preserving the purity and integrity of their language. To this end, they strongly opposed any intrusion of foreign words and insisted that the wrapping on all goods sold in France should contain only French words. This move failed, because of the requirement of an EU legislation of 1995. This legislation held that the only requirements for goods to be sold in the Single European Market were an instantly recognizable and clearly decipherable picture, and name in a language that could be understood easily14. Article 12 of the Pyrotechnic Directive requires pyrotechnic articles to be visibly, legibly and indelibly labelled in the official language of the country, where they are to be sold. Accordingly, Monster Bang will have to affix a label that not only states, in French, as to what the goods are; but also depicts pictorially that they are pyrotechnic articles. Portugal In order, to promote the free movement of goods, the EU harmonized taxation. To this end, the EU had established the maximum amount of such tariffs that could exist between third countries and its Member States. As such, the EU has permitted its Member States to impose lower tariffs. Nevertheless, these Member States are precluded from imposing higher tariffs. The result of these initiatives has been that customs, tax barriers or regulations that hinder free movement of goods, are no longer extant in the EU15. In Commission v. Germany Re Animals Inspection Fees case, the German authorities collected additional amounts towards maintenance of the animals’ inspection infrastructure. The ECJ held that these inspections were patently required by EC law; hence there was no equivalent effect to customs duties. Therefore, such fees were permissible. Accordingly, Portugal was justified in charging the additional fees16. In Commission v. Belgium Re Storage Charges case, the Belgian government collected additional amounts on customs cleared goods. The ECJ held that such charges were unlawful. Therefore, the charges by Portugal on the Monster Bangs Company do not have equivalent effect, because these charges are unrelated to customs or other taxes17. The problem countenanced in Portugal was that it wanted to avoid a fee charged by the Portuguese government, so as to fund a data information service. This fee is neither customs duty nor any tax. The purpose of charging these nominal fees is to have up to date information regarding imports and exports. Therefore, Monster Bang has to pay it. Italy The Italian law makes it mandatory to sell fireworks, only in retail outlets that have been specifically licensed to do so by the government. Monster Bang is desirous of selling its products in non – licensed premises, in order to increase sales to the level obtaining in other EU countries, where it has a market. The EU Directive regarding the sale of pyrotechnic articles, states that the customs and traditions in the different Member States differ widely, in respect of the use of fireworks. Therefore, it is essential to permit the individual Member States to enforce such laws as will ensure the safety of their citizens, by suitably restricting the sale of such pyrotechnic articles18. Safety of the citizens is of paramount importance. Accordingly, the importance of the single market has to perforce assume a position of lesser importance, in comparison to the safety of the citizenry. Enchede in Netherlands was witness to the death of approximately twenty individuals, when fireworks exploded; the injured were more than a thousand in this incident. As such the legislation of the Member States reveals marked variance in respect of the import, sale and use of fireworks19. The proliferation of fireworks that were not up to the mark prompted the EU to come out with the Pyrotechnics Directive 2007/23/EC; whereby certain safety standards were made mandatory for the sale of fireworks in the EU. These requirements have to be met by fireworks manufacturers, irrespective of whether they are located within or without the EU. Failure to comply with these requirements precludes the sale of fireworks produced by such non – complying manufacturers20. These requirements pertain to the proper handling, safe storage and stability from a chemical and physical point of view. In addition, there has to be adequate and relevant labelling of fireworks, for instance, such labelling has to be in the official language of the country to which the goods are being exported. A CE mark is accorded to fireworks that satisfy these conditions, which permits unhindered sale in the EU21. Perhaps, the most important aspect of this legislation lies in the fact that the Member States are permitted to enact such legislation as will cater to their individual needs; in respect of the import, storage and consumption of fireworks. For instance, the national governments can address their individual requirements regarding issues like the amount of noise made by the exploding firecrackers, their size, the mandatory age limit for consumers and the safety measures to be adopted in public fireworks displays. Therefore, the Italian authorities are justified in enacting such legislation and the Monster Bang Company has to comply with these laws. Accordingly, it cannot sell its fireworks from unlicensed retail outlets, as it had been doing in some of the other Member States. Germany German legislation provides for the prosecution of firms that do not sell their products in biodegradable, inflammable packaging. It does so because it is of the opinion that non – compliance with this law endangers the life and health of people and animals. Article 28 EC prohibits arrangements that are intrinsically prejudiced. All the same, selling arrangements by themselves do not come under the ambit of this prohibition. Any party with a grievance is required to establish that the piece of legislation in question renders access to the single market difficult. This is a very important test, which has been employed by the court on several occasions22. Sweden had proscribed the advertising of alcoholic drinks and it was contended that this ban had a greater impact on foreign manufacturers of strong drink. This so called Gourmet case, clearly established that treat provisions were very much applicable. Accordingly, it was left to the national court to ascertain if such a ban was conducive to the general interests of the public23. Accordingly, if any Member State prohibits any product that is accepted in other Member States; then such a Member State has to establish that in the interests of public health such a drastic measure had been implemented. Dutch law insists that the appropriate and permissible packaging for beer is returnable bottles. In Germany, beer has to be sold in non – returnable bottles. Obviously, these requirements have no vital bearing on the life and health of consumers of beer. The ulterior motive that can be ascribed to such insistence is to reduce competition, which results in an increase in the cost to the consumer24. The Pyrotechnic Directive establishes rules designed to achieve the free movement of pyrotechnic articles in the internal market while, at the same time, ensuring a high level of protection of human health and public security and the protection and the safety of consumers and taking into account the relevant aspects related to environmental protection25. Monster Bang does not use such wrapping on its products and this poses a threat to the environment. In addition, these wrappers being non – biodegradable pose a threat to human and animal health. Therefore, the German authorities, which had enacted legislation prohibiting such packaging material, is fully justified in initiating legal action against the Monster Bang Company. The European Union was formed in the year 1957, consequent to the Treaty of Rome or the EC Treaty. The fundamental aim of the Treaty was to establish a common market by which the economic activities of the Member State could be developed harmoniously. It also aimed to provide a continuous and balanced development of the Union due to increased stability. The Treaty promotes mutual cooperation among its Member States26. In order to achieve these goals, it was required to establish a common market in which the goods were permitted to move without any barriers in the Union. By implementing the free movement of goods, the production efficiency was improved. This is due to the fact that the manufacturers in several Member States had to compete with each other, thereby improving the quality of their products and providing them to the customers at competitive prices27. In order to implement the concept of free movement of goods, the internal barriers within the Member States have to be withdrawn. There should not be any type of physical, technical and financial barrier to the free movement of goods in any Member State. It is also important to withdraw discriminatory restrictions between the Member States. Therefore, all the Member States are required to rescind trade restrictions that hinder the free movement of goods28. There are several provisions laid down in the common market that are based on the Customs requirements. The concept of free movement of goods is therefore subjected to these requirements. First, goods produced in a Member State should be freely imported in all the Member States. Second, there should not be any customs duties on such goods. Third, goods produced in a nation other than the Member States and imported to any of the Member States are liable to pay customs duties in the Member States. Finally, goods produced in a nation that is not a Member State; must be charged customs duties only once and thereafter they should be permitted to move freely in the other Member States without being required to pay further customs duties29. The barriers to the free movement of goods can be categorized as physical barriers, technical barriers and fiscal barriers. Physical barriers are those that promote a checking system in which the goods are monitored at national borders of Member States. Fiscal barriers can be tariffs and other types of indirect taxes and levies on the goods, which are applied either during export, import or during transit. Technical barriers can be restrictions or trade measures, which affect the free movement of goods. For instance, technical barriers may be national legislations and other regulations concerning the marketing of goods or standards that are aimed to protect public safety and health. Hence, technical barriers are the main hindrances to the free movement of goods30. In this manner, the concept of the free movement of goods constitutes an essential component of the common market. Under Article 14, there should not be any internal barriers that hinder the free movement of goods, persons, services and capital in the common market. Thus Article 14 maintains a firm legal basis for the operation of an internal market within the European Union31. Works Cited 1. "A Single Market for goods." 26 September 2006. The EU Single Market. 20 February 2008 . 2. Bailey, Allen R Bailey and Melinda C Bailey. EU Directive Handbook: Understanding the European Union Compliance. CRC Press. ISBN: 1574441027, 1997. P. 10. 3. "Better off in Europe. How the EU's single market benefits you." November 2005. European Commission. Directorate - General for Press and Communication. 20 February 2008 . 4. "Case C-347/03: Reference for a preliminary ruling from the Tribunale amministrativo regionale del Lazio Regione autonoma Friuli-Venezia Giulia and Agenzia regionale per lo sviluppo rurale (ERSA) v Ministero delle Politiche Agricole e Forestali." Official Journal of the European Journal (23 July, 2005): C 182/9. 5. Case 215/87 Schumacher v. Hauptzollamt Frankfurt Am Main -Ost [1989] ECR 617 6. C – 62/90Commission of the European Communities v Federal Republic of Germany. European Court of Justice. 8 April 1992. 7. Case 18/87 Commission of the European Communities v Federal Republic of Germany. No. Case. European Court of Justice. 27 September 1988. 8. Case C – 405/98 KO v. Gourmet International products. ECR 1-1795. 2001. 9. Case 132/82 Commission of the European Communities v Kingdom of Belgium. European Court of Justice. 17 May 1983. 10. Case 120/78 Rewe-Zentral AG v Bundesmonopolverwaltung für Branntwein. European Court of Justice. 20 February 1979. 11. Case 266/81 Società Italiana per l'Oleodotto Transalpino (SIOT) v Ministero delle finanze, Ministero della marina mercantile, Circoscrizione doganale di Trieste and Ente autonomo del porto di Trieste. No. European Court of Justice. 16 March 1983. 12. "Directive 2007/23/EC of the European Parliament and of the Council ." Official Journal of the European Union (14 June, 2007): L. 154/1. 13. "Directive 2007/23/EC of the European Parliament and of the Council on the market of pyrotechnic articles." 23 May 2007. 14. "Directive 2007/23/EC of the European Parliament and of the Council of 23 May 2007 on the placing on the market of pyrotechnic articles (Text with EEA relevance)." Official Journal of the European Union (14 June, 2006): L. 154, Pp. 1 - 21. 15. "EU "Playing With Fireworks"." 29 November 2006. SP. International. 20 February 2008 . 16. Flowers, Edward B, Thomas P Chen and Jonchi Shyu. Greenwood Publishing Group. ISBN: 1567202071, 1999. P. 61. 17. Franch, Xavier and Dan Port. Cots-based Software Systems: 4th International Conference, ICCBSS. Springer. ISBN: 3540245480, 2005. P. 36. 18. Gillies, Dorothy. A Guide to EC Environmental Law. Earthscan. ISBN: 1853835854, 1999. P. 3. 19. Goldstein, Judith. Legalization and World Politics . MIT Press. ISBN 026257151X, 2001. P. 130. 20. Harris, Phil and Frank McDonald. European Business and Marketing. SAGE. ISBN: 0761966056, 2004. P. 38. 21. Jovanovic, Miroslav N. The Economics of International Integration. Edward Elgar Publishing. ISBN: 1845422716, 2006. P. 186. 22. Jonavic, Miroslav N. The Economics of International Integration. Edward Elgar Publishing. ISBN: 1845422716, 2006. P. 185. 23. Kaniel, Moshe. The Exclusive Treaty - Making Power of the European Community Up to the . Marinus Nijhoff Publishers. ISBN: 904110240X, 1996. P. 5. 24. Labrianidis, Lois. The Future Of Europe's Rural Peripheries . Ashgate Publishing Ltd. ISBN: 075464054X, 2004. P. 103. 25. Naftel, Mark and Lawrence J Spiwak. The Telecom Trade War: The United States, the European Union, and the. Hart Publishing. ISBN: 1841130141, 2000. P. 235. 26. "Overviews of the European Union activities. Internal Market." December 2007. EUROPA. 20 February 2008 . 27. "Paragraph 1, Aritcle 1 Directive 2007/23/EC of the European Parliament and of the Council ." 23 May 2007. 28. Pitiyasak, Saravuth. Legal Research: Free Movement of Goods within EU. 20 February 2008 . 29. Reich, Norbert. Understanding EU Law: Objectives, Principles and Methods of Community . Intersentia nv. ISBN: 9050953247, 2003. P. 105. 30. Standardisation of Explosives. 28 November 2007. 21 February 2008 31. Wessels, Wolfgang. The European Union After the Treaty of Amsterdam . Continuum International Publishing Group. ISBN: 0826447708, 2001. P. 298. Read More