The primary objective for the formation of the European Economic Community (ECC) was to create a common market to enhance the achievement of a trading advantage over other Atlantic states. The member states hoped that the move would spur growth by promoting marketing scale and capitalizing on specialization among the member states. However, the ECC faced many technicalities when creating a common market due to lack of strategic decision-making structures and protectionist attitude adopted by members. It was especially difficult to remove barriers and enforce common trade regulation. For a common market to have some effect, freedom of capital, labor, goods and services is an imperative. Together, they constitute the four freedoms and form the basis of the rules of engagement within the EU. Freedom of movement of goods is of importance for the functioning of the EU. However, this freedom involves the harmonization of the local relatively restrictive legislations. The EU has had to legislate in many areas to facilitate free movement of goods within the region. These include the Maastricht treaty and Single European Market Act and the Treaty on the Functioning of European Union (TFEU) among others. The decisions made in the European court of justice, such as the Cassis de Dijon form important precedent in providing some guidelines for the conduct of the movement of goods. Article 34 of TFEU is especially significant in the freedom of movement of goods among member states. Despite the effect of this law, member states have always invented ways to exploit the weaknesses of the provisions to bypass its effects and restrict movement of goods
Actual Provision of Article 34 TFEU
This article prohibits all the quantitative measures imposed by states to prohibit imports and all other measures that have an equivalent effect. This provision encompasses a wider approach that is vulnerable to misinterpretations. It places a higher burden on the courts to define the scope of its application when disputes emerge. In the case of Dassonville, the court settled that the phrase includes all the rules that can directly or indirectly hinder intra-community trade. It affirmed that these measures constitute a similar effect as quantitative implications. As such, this could not be said to be a narrow interpretation and it calls for a further exposition to give the provision a clearer application. In reality, they infer that a state could still engage some restrictions that do not fall within the definition of the precedent. For instance, the provision does not define the subject jurisdiction and does not define the degree of a restriction sufficient to warrant the intervention of the article. Secondly, it is still vague as to the actual measures capable of being deemed as trade rules. In practice, it is difficult to reconcile national legislations especially when enacted to achieve other goals other than control trade. The legal uncertainty of the provision implies that the legality of the provisions depends on the justification of article 34 of TFEU. The ruling in Keck and Kranz cases have attempted to provide a test for the legality of national laws, but these too are uncertain, and states could still impose restrictions without violating the article.
Theoretical Vis A Vis Legal Position
Article 34 contemplated an entirely free trade. Article 35 possessed a similar attitude, but challenges were experienced immediately. The cases of Cassis de Dijon and Keck versus Methiocarb underscore the practicality of the challenges that manifest in the real world and they divulged the illusion of free trade. It became apparent that states needed some form of control and the EU enacted article 36 as a response to this realization. Among other things, the provision allow members freedom to restrict imports on exports of goods in transit under certain justifications, including public policy, morality, public safety, protection of health and lives of plants and animals, protection of industrial, commercial property, and national treasures. For national legislation to fall within these exceptions, the restriction must be justifiable and not constitute an arbitrary discrimination or even a disguised trade restriction. The onus is on the state in question to qualify its national laws. The article formed an exhaustive list, and this list led to the development of the rule of reason to qualify other instances as restrictive national laws.
Rule of Reason
A national law can contain a provision that brazenly discriminates on imports and the rule of reason was an acknowledgment of other circumstances that do not fall within the test described in the Dawsonville case that sought to outline the scope of Article 34. The European Court of Justice acknowledged the insufficiency of the exceptions in Article 36. It recognized that there would be some other legitimate cases beyond those exceptions and the genesis of the rule of reasons is traceable to Cassis de Dijon case. In this case, Germany had imposed some restrictions on imports and local production of alcohol content 25 percent and less. The court found that this was an indistinctively applicable regulation and the ruling led to the expansion of the scope of article 36 by including distinctively measures as acceptable exemptions. In effect, it narrows the operation of the Dawsonville absolute test. The goal of article 34 is to preclude instances of discrimination. A rule that cuts, either way, is on imports and local goods that cannot validly be deemed to constitute discrimination. National laws could adopt legislations of this nature to defeat the requirements of Article 34. However, states have the burden of proving that a federal law constitutes an indistinctive measure.
Invoking the Exceptions in Article 36
Article 34 contemplated an entirely free interstate trade, but in practice, this notion is elusive and fraught with innumerable technicalities. Article 36 highlights legitimate exceptions to Article 34 that a state could use to justify its national laws. In the case of Dulphar Case, the Court recognized that Article 36 related to measures of non-economic value and therefore not connected to discrimination. These exemptions apply to imports, exports and goods in transit, but the article raises several grounds not limited to morality, protection of the environment and the state, public policy, public health and protection of national treasures. However, a national law must fall within this bracket to win protection, but it must not be a way of disguising discrimination. Courts require an exercise of good faith to avoid enacting overbearing and discriminating laws. In addition, a state must be prepared to demonstrate that national law serves one of the purposes falling under this category.
Plead Indistinctive Application
The courts have been confronted by cases involving a regulation that cut both ways. In these cases, the question has been whether this constitutes discrimination in terms of the article 34. Logically, a national law that restricts imports and local goods is not purely discriminative, but is rather regulative and the decision in Keck and Mithouard is important in this scenario. In this case, the court found that for the justification to stand, the national law must fulfill two conditions. First, the national law must have an application on all the traders operating within the national territories not confer some trading advantage at the expense of others and it must apply to both foreign and local goods. A governing principle is trading fairness and the justification is in two parts. A state must be able to prove the two elements for the justification to hold. The courts place the burden of proof of validity in the state.
Doctrine of Mandatory Requirements
A state could restrict movement of goods by invoking the doctrine of mandatory requirements. The doctrine recognizes that certain requirements are necessary to keep to certain standards. This doctrine was invented in the case of Cassis de Dijon. In this case, Germany alleged that a regulation on the content of alcohol was necessary because of public health. The court recognized this as a legitimate interest although not falling under the grounds listed in Article 36. In this case, the court noted that certain requirements might be necessary conditions to serve certain purposes not limited to protection of public health, fairness in commercial transactions, defense of the customer and the effectiveness of fiscal transaction. Article 37 (10), charges the state to adjust its monopolies to eradicate discriminations in production and marketing of goods. For instance, in Cinematheque case the court settled that a French law was necessary and applied indistinctively to promote cinema thus not an infraction of Article 34. In Re Disposable Beer Case, for instance, the court asserted that environmental protection is a mandatory requirement and applies to all states.
How the Court of Justice Limits Justification
Although the courts have allowed certain limitations to operate counter-intuitively against the spirit of Article 34, it exercises certain controls to prevent a state from going overboard in their justifications. First, it places the onus of qualifying the justification for the state purporting to institute the restrictive national law and the TFEU is binding for all member states. States have an obligation to inform their local laws to keep the spirit of Article 34. Often, the state needs to distinguish its case from those circumstances of the prohibited under the article. A state could rely on the exceptions outlined in Article 36 or even prove that the national law falls within the indistinct measure devised through case laws. The court abhors bad faith and disguising discrimination in the local laws for personal gain.
The courts also perform an analysis to check if a justification conforms to certain conditions. For instance, a justification based on one of the exemptions under Article 36, must be clear of any form of arbitrary discrimination. Where a state enacts legislation to control importation of pornographic materials, it must to prove that the purpose of the law serves that purpose and not to control trade for competitive advantage. The courts interpret the law to check if these local laws comply with the available regional laws, however, vague they might be.
The courts also rely on precedents to limit these justifications and through practice, the courts have reached to certain conclusions that serve as a yardstick in testing the scope of that justification. For instance, the doctrine of the mandatory requirement is an invention of courts and serves as an important check. Among other things, a court has to find out if a standard recommended by a state is capable of mutual recognition. In addition, a court has to determine whether the law meets all the conditions recommended in precedence for its validity. Regardless of the ground of justification, a court has the authority to render a national law null and void for inconsistency with TFEU and set precedents.
Concluding Remarks
Freedom of movement of goods is part of the four freedoms in EEC. It is an important component in the formation of a single market, free of unnecessary trade restrictions. Article 34 TFEU entrenches the need to remove all quantitative restrictions and other measures with similar effect. However, the idea of free trade has been impractical. Article 36 TFEU has provided certain exemptions to allow states some control on interstate trade. Through practice, courts have contributed to the circumstances under Article 36. The court has recognized that mandatory requirements constitute a valid justification for national laws and the recent developments have demonstrated that TFEU is indeed vulnerable manipulations. As a check, courts place the burden of proof on the enacting court to prove the validity of its laws. Besides, the ECJ uses proportionality to limit state’s justification to reduce abuse
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