1. Environmental Legal TeamEnvironment and Beyond Advanced European Union Law The European Internal Market: Free movement of goods (I) 6 th Lecture, 14-11-2013

2. Environmental Legal TeamEnvironment and Beyond Free movement of goods Free movement of goods is a central element of the European internal market Rules regulating freedom of movement of goods are contained in Part III, Title II TFEU 2

3. Environmental Legal TeamEnvironment and Beyond 1) Free movement of goods: rules The following main rules regulate and ensure free movement of goods in the European Internal Market: a)Prohibition of customs duties on imports and exports and charges having equivalent effect between Member States (Art. 28 and 30 TFEU) b)Prohibition of discriminatory internal taxation on imported goods (Art. 110 TFEU) c)Prohibition of quantitative restrictions and measures having equivalent effect (non-tariff barriers) between Member States (Art. 34-36 TFEU) 3

4. Environmental Legal TeamEnvironment and Beyond What do these rules apply to? They apply to goods Notion of goods: it encompasses all products likely to have monetary value and therefore likely to be the object of a commercial transaction (concept developed by the Court of Justice, no definition of goods in the Treaty) Territorial application: these rules apply to all goods produced in the territory of the Union and those coming from third countries within the territory of a Member State 4

5. Environmental Legal TeamEnvironment and Beyond Art. 28 TFUE 1.The Union shall comprise 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. 2.The provisions of Article 30 and of Chapter 2 of this Title shall apply to products originating in Member States and to products coming from third countries which are in free circulation in Member States. a) Prohibition of customs duties and charges having equivalent effect

6. Environmental Legal TeamEnvironment and Beyond Art. 30 TFEU Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature. a) Prohibition of customs duties and charges having equivalent effect

7. Environmental Legal TeamEnvironment and Beyond Why is it important to remove customs duties on imports and exports? Because it is important to eliminate all possible negative effects such taxation can create in order to facilitate free circulation of goods in the internal market. Why is it important to remove all charges having equivalent effect? To prevent Member States from adopting measures other than customs duties which negatively affect imported goods, so as to loose the benefits deriving from the removal of customs barriers. 7 a) Prohibition of customs duties and charges having equivalent effect

8. Environmental Legal TeamEnvironment and Beyond Charges having equivalent effect: definition What are charges having equivalent effect? No definition in the Treaty, the concept has been defined by the European Court of Justice: [A]ny pecuniary charge, however small and whatever its designation and mode of application, which is imposed unilaterally on domestic or 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 having equivalent effect... 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 (Case 24/68 Commission v Italy) 8

9. Environmental Legal TeamEnvironment and Beyond Charges having equivalent effect … …to summarize, we have a charge having equivalent effect when the following conditions occur: 1)It must be a pecuniary charge, this meaning that the payment of a certain amount of money is requested; 2)It must be a charge which applies to goods in relation to the fact that they cross the frontiers; 3) it must be unilaterally imposed by the State which import or export It does not matter whether the payment occurs at the borders or somewhere else within the territory of a Member State.

10. Environmental Legal TeamEnvironment and Beyond Art. 29 TFUE: free circulation 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.

11. Environmental Legal TeamEnvironment and Beyond Art. 110 TFEU 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. 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. b) Prohibition of discriminatory internal taxation on imported goods

12. Environmental Legal TeamEnvironment and Beyond Scope of Art. 110 TFEU: it recognizes that Member States can still apply taxes on goods coming from other Member States, but such taxes should not discriminate or be a means to promote protectionist policies ( i.e.: Italy can tax Spanish tomatoes, only if and to the extent that it applies the same taxation to Italian tomatoes). Fiscal imposition shall be neutral. Discrimination which can affect goods, may consist in: Direct discrimination Indirect discrimination 12 b) Prohibition of discriminatory internal taxation on imported goods

13. Environmental Legal TeamEnvironment and Beyond Direct and indirect discrimination All measures of internal taxation directly affecting imported goods in a different way by reason of their different country of origin are forms of direct discrimination. A form of indirect discrimination exists when national goods can benefit of a certain fiscal treatment, whereas imported goods are subject to a less favourable treatment.

14. Environmental Legal TeamEnvironment and Beyond Similar and comparable products In order to determine whether there is or not a discriminatory internal taxation on imported goods, it is necessary to compare the treatment of the imported product with respect to a correspondent national product. The term of comparison is represented by: Similar products (products with objective and subjective similarity) (art. 110, 1) Comparable products (products which can be substituted from the point of view of consumers) (art. 110, 2)