European Union Law

EUROPEAN UNION LAW

FREE MOVEMENT OF GOODS (1)

1 Introduction

What is the difference between:

- a free trade area

- customs union

- common market (or single market / internal market)

- economic union

Article 14 EC (old Article 7a EC) defines the internal market as:

"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."

Free movement of goods is at the basis of the internal market.

How to achieve a single internal market?

2 The customs union

Article 23 EC (old Article 9) seeks to establish a customs union. What does this require?

- a common customs tariff (or common external tariff)

- goods in free circulation (Article 24 - old Article 10 EC)

The CCT is governed by Articles 26 and 27 EC (old Articles 18-29).Common duties are applied to goods that are imported into the EC. Such duties can be modified, or particular quotas can be given to Member States should the need arise. Note that once goods are imported into the EC they are deemed to be in "free circulation" (Article 10 EC).

What does this mean?

Is the customs union now complete?

3 Prohibition between member states of customs duties on imports and exports and of all charges having equivalent effect.

This is governed by Article 23 (old 9) and Article 25 (old 12)

Article 25 (old 12)

Member States shall refrain from introducing between themselves any new customs duties on imports or exports or any charges having equivalent effect.

This is a standstill provision.

The transitional period (former Articles 13-15) has now expired for all member states.

Duties

The prohibition applies to all duties, whether applied directly or indirectly:

Vand Gend en Loos(Case 26/62) [1963] ECR 1

Charges of equivalent effect

Customs duties can be clearly defined, but what about "charges having equivalent effect"?

Sociaal Fondsvoor de Diamantarbeiders(Cases 2 & 3/69) [1969] ECR 211

How does a "charge of equivalent effect" differ from a genuine tax?

Commission v France(Re Levy on Reprographic Machines)(Case 90/79) [1981] ECR 283

Note-in order to breach Article 25 a charge need not be introduced for protectionist reasons. The reason for the charge does not prevent it from being an obstacle to the free movement of goods. For example:

Commission v Luxembourg and Belgium(Re import on Gingerbread)(Cases 2 & 3/62) [1962] ECR 425

Case C-72/03 Carbonati

Exceptions

1 Payment for a service rendered

Even when the charge is levied to benefit the importer it may still breach Article 12.For example:

Commission v Italy(Re Statistical Levy)(Case 24/68)[1969] ECR 193

Therefore, what does this case suggest?

Rewe-Zentralfinanz(Case 39/73) [1973] ECR 1039

Note-even when such inspections are expressly permitted under EU law, a charge for such a service cannot be regarded as a service rendered for the benefit of the importer. For example:

Commission