Free Movement of Goods

Question 1

Since the advent of 3D films in cinemas and on television, the demand for 3D glasses
has grown exponentially in the UK. Wolfgang, a long-standing manufacturer of these
glasses in Germany, where they are used in cinema clubs showing old 3D movies,
sees a great marketing opportunity in Europe and decides to try out the UK as the
potentially largest market. He has updated his technology in glasses production. He
has obtained all the necessary certificates in Germany, which approve both his
methods of manufacture as being environmentally friendly, and also approve the
quality of the finished product.

At the beginning of March, Wolfgang despatches a consignment of 1,000 pairs of 3D

glasses to the UK. He has an agreement with several large supermarkets to display
and sell these glasses as a ‘special offer’. This means that, taking into account the
extra transport costs, he will make only a very small profit, but he is interested in
selling many more later. Time is of the essence as he wants to sell the glasses before a
number of blockbuster films with the 3D technology reach British cinemas in April.

When the consignment arrives in the UK, customs inspectors seize the glasses and
indicate that they need to be properly tested. There has been a lot of trouble with this
sort of glasses, imported from the Far East, and there have been rumours of people’s
eyes being damaged. These tests take a long time as specialists are needed to carry out
the testing. Wolfgang is charged £100 specialist storage per day and the tests will cost
£200 an hour of which the UK authorities will pay half. All this takes approximately
four weeks. The tests prove to be satisfactory and the glasses finally arrive at their
retail destination at the beginning of April.

Supermarket A displays the glasses at the back of the shop, advertising their superior
quality, and their relatively low cost. Sales do not go well. Supermarket B wants to go
one better and advertises the glasses as follows: ‘Unique 3D glasses, long use, one
consignment only sold at especially low prices, below their cost of manufacture.’
Local Council inspectors check both supermarkets and confiscate the glasses in
supermarket B, as by law in the UK products may not be sold below cost price.

Advise Wolfgang as to any breaches of EU law which have occurred. What steps can
Wolfgang take to obtain a remedy for any breaches?

General remarks

Wolfgang’s obstacles needed to be discussed on the basis of Articles 30 and 34

TFEU.

1. Seizure and testing of the 3D glasses:

a) Length of time of the hold-up of the glasses is of the essence, and it should
not be disproportionate.
 b) The cost of the storage should not have to be paid by the importer.

c) The cost of testing. Tests should not be necessary for glasses produced in
Germany under the mutual recognition principle. The tests are therefore, purely
an extra domestic requirement (obstacle) and should be paid for by the UK (as
well as any loss caused by the delay involved in testing).

2. Article 34 TFEU:

a) Supermarket A – no breach (apart from possible breach of contract – not

relevant here).

b) Supermarket B – if it had confined its statement to the ‘long use – low prices’
part, there would have been no difficulty. The statement ‘below cost of
manufacture’ is against UK law. Confiscating is an indistinctly applicable
measure (Cassis) but see Keck – this is a pure selling arrangement and therefore
not caught by Article 34 at all.

Remedies

1. Article 30 TFEU has direct effect (Van Gend), so Wolfgang may institute
proceedings in the UK court directly against the customs authority. Surprisingly
few answers dealt with the fact that direct effect can be used here, and went
straight on to mention Francovich and State liability. It should be borne in mind
that, if direct effect can be used, this is the most direct route towards an effective
remedy and it is only if that route cannot be used that the other avenues should be
explored.

2. There is probably no EU law breach in the case of either supermarket.

Question 2

France has recently enacted legislation, which aims to promote environmental

protection. The legislation lays down the following provisions:

a) All private passenger-carrying aircraft imported into France must comply with
minimum fuel efficiency and noise standards. France does not produce any
aircraft itself. The new standards will mean that planes presently sold in other
Member States cannot be sold in France. Planes already in use in France must
comply with the new standards within ten years or be scrapped.

b) Only electric cars may be advertised on television. These emit 50% less carbon
dioxide than petrol cars. All cars may be advertised in other media without
restriction. French companies produce 30% of the electric cars sold in the EU.
The next biggest manufacturer of electric cars is Italy with 10%.

c) Solar panels must be fitted to all government buildings. There must be a

 competitive tender to supply the panels. The panels must meet a very high
technical performance standard. This standard is presently only achieved by
two companies in the EU both of which are French.

d) Cars must not be driven at more than 90km per hour. This is in order to reduce
emissions. Italian sports car manufacturers are concerned because previously the
speed limit in France was 130km per hour. They believe that their sales will fall
if the speed limit is imposed as their cars have top speeds of 160km per hour or
sometimes more.

e) Cars which are more than ten years old will have to bear a flat fee road tax of
1000 euros per annum. New cars are taxed at 5% of the sale price. This is said
to be because old cars are less environmentally friendly than new cars. 50% of
new cars are made in France.

Discuss the validity under Union Law of these provisions.

General remarks

a) This is an indistinctly applicable measure (Cassis). France does not manufacture

aircraft itself, so this concerns purely imported goods from other Member
States. It is possible that the Article 36 exception (health of humans, animals
and plants) may apply, but environmental protection under Cassis is more likely
(Commission v Austria Co-operativa Co-Frutta, Commission v Denmark, etc.),
but is it proportionate?
b) TV advertising for electric cars only: Article 36 may apply (consumer
protection), but environmental protection for an indistinctly applicable measure
is more likely. There may be disguised discrimination, however, if the French
are the main manufacturers of electric cars, and general car advertising is
prohibited. This may not be proportionate.
c) Although tenders are competitive, only French companies can comply with the
standards and this is a highly technical requirement which other countries would
have difficulty in achieving in the immediate future. So this is direct
discrimination (Dassonville).
d) This is an indistinctly applicable (Cassis) product requirement, but it is saved by
the mandatory requirement of road safety. Italian cars are also capable of
driving at 90 km an hour!
e) This concerns Article 110 TFEU, indirect discrimination (contrast Humblot
and Commission v Greece . Five per cent taxation only exceeds €1,000 if the
sale price is more than €20,000, so it only affects big, relatively expensive cars,
and the Humblot argument, although perhaps less relevant now, probably still
applies.
Question 3

Ahmed is a Turkish exporter of the sweet ‘Turkish Delight’. He arrives at the

Bulgarian border with a lorry filled with the product. It is hot, and high summer. His
waiting time at the border before being allowed entry into Bulgaria is about three
hours. He has all the relevant documents and obtains entry without a hitch.

The first consignment is for Greece. At the Greek border he is held up because Greek
health laws provide that sweets should have a content of no more than 20% artificial
sweeteners. In spite of producing a certificate showing a 15% artificial sweetener
content Ahmed has to wait for a batch to be tested before he is allowed to proceed. He
successfully delivers his first batch to a supermarket in Athens.

He drives on through the night and arrives at the Slovenian border the next morning.
Slovenian law provides for all packaging of sweets to be clearly labelled with the
amount of sugar content. Ahmed’s sweets are clearly labelled in Turkish, with the
sugar content. This is rejected as insufficient by the Slovenian authorities.

However, having obtained permission to drive through Slovenia ‘in transit’ to the
Austrian border (his lorry having been securely sealed) Ahmed finally arrives at the
Austrian border. Austrian officials realise that it has been at least five days since
Ahmed entered the European Union and demand an inspection of his cargo before
allowing him to proceed. They fear that the sweets may have melted in the heat and
are unsure of their fitness for human consumption. Ahmed pays 50 euros per box for
this inspection, which takes another day. The sweets pass the inspection.

When Ahmed arrives at his final destination, a big Austrian supermarket, it refuses to
accept the delivery. Too much time has expired and the quality of the sweets is
thought to have deteriorated so much that they may pose a health hazard.

Discuss what issues have arisen under EU law and to what remedies, if any, Ahmed
may be entitled.

Question 4

The distinction between product requirements and selling arrangements in Keck is a

very fine indeed, and it is a line which has been drawn in the wrong place.

Discuss the accuracy of this statement with reference to prior and subsequent case
law.
Question 5

Biborova is a Latvian company producing vodka, well known in particular for

Bibotal, a line of ready-made vodka cocktails that it markets in 1 litre plastic bottles.
Bibotal is mainly destined to home consumption, and is not distributed to pubs, bars
or restaurants. In May 2014 Biborova decides to enter the Polish market with Bibotal,
but encounters several difficulties. First, the Intoxicating Substances Law of 2003
provides that intoxicating substances no matter how big the alcohol concentration can
only be marketed in glass bottles, for reasons of consumer protection and public
health. Biborova will thus incur high packaging costs in order to be able to sell its
products on the Polish market. Second, according to the Advertisement Law of 2004,
alcohol can only be advertised in pubs, bars and restaurants, as well as in specialized
gastronomic magazines.

Biborova fears that this will seriously diminish its chances to be known on the Polish
market. Biborova’s advisors think that the Intoxicating Substances Law of 2003 and
the Advertisement Law of 2004 are contrary to European law, but come to you for a
second opinion.

Question 6 (2016)

Zenfit has been lawfully producing herbal teas in the UK for some time. The success
of its sales in the UK has encouraged Zenfit to try to export its products to other EU
Member States. However, it has encountered some difficulties. In France, legislation
requires that any information on the packaging of herbal teas must be in French. In
Spain, the national agency for food and health has recently classified all herbal teas as
‘medicinal products’, which makes them subject to a specific authorisation by the
agency.

Advise Zenfit on the compatibility of the French and Spanish measures with EU law.

Question 7

‘The essence of the Dassonville (1974) test is that, as a matter of law, a hindrance
to trade might occur, and the purpose or intent behind the measure does not
seem to be relevant…’

In what ways and to what extent has the approach of the Court to the free movement
of goods in Dassonville (1974) been modified in its subsequent case law? Is the
Dassonville (1974) test still of relevance?
Question 8

a. A consignment of cows from Hungary arrives at the border of France. There

is an overproduction of cows in France and the French government has
imposed restrictions on the breeding of cows, requiring all locals who breed
more than the quota, as well as all importers of cows, to pay a five percent
levy on the production cost of their cows into a French fund for the
improvement of national breeds of cows.

b. There have been reports of a possible outbreak in Hungary of BSE disease

which is often fatal to cows, although it does not affect the beef obtained
from such cows, which is legally accepted in the EU. However, the French
authorities want to play it safe, particularly in view of their own excess
production, and require a certificate from all importers certifying that their
cows are free of BSE.

c. Before the levy is paid and the certificate obtained, the consignment is held
up for several days at the border, and by the time the lorry arrives at the
slaughterhouse several of the cows have died and others are in such a bad
state that their meat is also no longer fit for human consumption.

The Hungarian beef is sold at a very competitive price to a large French supermarket,
which advertises the arrival of the consignment as 'cheap, tasty beef from Hungary,
from free-range cows'. The next day the meat is confiscated by government inspectors
because they believe that the price cannot possibly cover the cost of production and
slaughtering, and selling below this price is illegal in France.

Advise the Hungarian importer as to his rights and remedies under EU Law.